Experts Say Prospects of Section 301 Tariff Removal 'Remote'

A lawyer, a lobbyist and a think tank scholar all agreed -- the Section 301 tariff review is unlikely to result in significant changes to the punitive tariffs on most Chinese goods.

Ron Baumgarten, an attorney with BakerHostetler, said during a webinar hosted by the Massachusetts Export Center Expo that while he put some comments in to the Office of the U.S. Trade Representative in the hopes of getting items removed from the target list, he thinks the best business can hope for is a new exclusion process.

"The prospect of removing them, it seems rather remote [that] they're going to have a major change of course," he said. "It doesn’t seem like the tariffs are going to go away anytime soon."

Bill Reinsch, a trade expert at the Center for Strategic and International Studies, said: "There is no decision that Biden can make on tariffs that will be politically popular. Any decision he makes will be too little for business, too much for labor and too much for Republicans," he said, since Republicans are trying to paint Biden as soft on China. "In that situation, what you usually do is nothing. That’s pretty much what they do."

While Reinsch said that USTR "may cough up an exclusion or two over time," that's not really a policy change. "That’s just trying to handle the flow of traffic."

The Jan. 27 webinar was called "Hot Topics in Global Trade," and the panelists agreed that the Indo-Pacific Economic Framework is more lukewarm than hot.

Rory Murphy, the vice president of government affairs at the U.S.-China Business Council, said that IPEF is not a trade agreement like the U.S. used to negotiate, and the rest of the world is still negotiating. But, he said, "It's not nothing."

Baumgarten said that businesses are somewhat skeptical about IPEF. He said it looks to him like a "TIFA-plus arrangement." A TIFA is a trade and investment framework agreement, which is a structure for the U.S. and trading partners to talk about trade irritants and what former U.S. Trade Representative Robert Lighthizer used to call "singles" -- getting non-tariff barriers lifted on a single agricultural product, for instance.

In response to a question from International Trade Today on forced labor enforcement, and whether it's pushing companies to move supply chains out of China, Murphy said that the proportion of USCBC members who say they are moving segments of their supply chains out of China is growing. In 2021, 13% said they were moving; in 2022, 22% said they were moving at least part of a supply chain out of China.

Murphy said the group doesn't ask why companies are reducing China exposure, but he said it's been interesting that even with all the trade actions taken against China in the last five years, companies are still quite active there.

"We know that as CBP is boosting up their enforcement capability, we’ll probably see more and more shipments stopped as the months go on," he said, but at the same time, he said, companies have already invested a lot of time and money to ensure their supply chains do not contain forced labor. He suggested that because of that, companies do not have the incentive to leave China that Congress may have thought it created when it passed the Uyghur Forced Labor Prevention Act.