USTR Says It Got 434 Requests to Keep Section 301 Tariffs Intact

The Lists 1 and 2 Section 301 tariffs on Chinese imports didn’t terminate on the fourth anniversaries of their imposition dates, July 6 and Aug. 23, after the Office of the U.S. Trade Representative received “numerous requests” from “domestic industries” to keep the duties intact, said an agency notice Friday.

Keeping the tariffs in place was a statutory formality under the Section 307 modification provisions of the 1974 Trade Act; the law was written to say only a single continuation request was required to prevent the duties from expiring automatically at their four-year marks (see 2205040032). USTR's outreach to supporters of the List 1 tariffs drew 244 continuation requests from domestic producers and 44 from trade associations, said the agency. Its List 2 outreach drew 114 requests from domestic producers and 32 from trade associations, it said.

The agency didn’t name the producers or trade groups that asked for the continuation of the tariffs, nor were their identities made public in the dockets USTR set up in the spring to accept the continuation requests. Critics of the tariffs weren't permitted to voice their opposition in the dockets reserved for the continuation requests but will have their chance to post comments in the upcoming four-year USTR review.

Some domestic producers that urged continuation typically said the tariffs “allowed them to compete against Chinese imports, invest in new technologies, expand domestic production, and hire additional workers,” said USTR. Others said the tariffs “have created more leverage to induce China to eliminate the policies and practices that are the subject of the Section 301 action, and have helped to address unfair competition resulting from China’s technology transfer policies and practices and encourage better policies and practices,” said the agency.

But USTR Katherine Tai conceded during a House Ways and Means Committee hearing in March the tariffs have “not incentivized China to change” its unfair trade practices as then-President Donald Trump intended when he imposed them beginning in 2018 (see 2203300051).

Friday’s continuation notice will trigger USTR’s four-year statutory review in which the agency will seek public comment on the effectiveness of the tariffs in curbing China’s allegedly unfair trade behavior, plus “other actions that could be taken” and their impact on the U.S. economy and consumers, it said. USTR will describe "further steps" in the review process in a future notice or notices, it said.

“Given how low the bar was here,” USTR’s announcement on continuation of the tariffs was “not a surprise,” Sidley Austin trade attorney Ted Murphy wrote clients Friday. “It is important to remember” that there is “no requirement that the USTR take any action” based on its four-year review, he said.

"There is no winner in a trade war or a tariff war," said a Chinese Foreign Affairs Ministry spokesperson Monday in response to USTR's continuation notice. The Section 301 duties were "imposed unilaterally" by the U.S. on China in violation of World Trade Organization rules, she said. The duties "do no good for China, the U.S. or the world," she said.