Fate of Existing Section 301 Exclusions Will Be Announced This Week

A Federal Register notice that will be made public this week will announce decisions on which of the current Section 301 tariff exclusions can continue, according to Brian Janovitz, chief counsel for China trade enforcement in the Office of the U.S. Trade Representative.

Janovitz, who was speaking during a panel discussion called "Negotiating China Amid Rising Geopolitical Tensions" at the Georgetown Law Annual Trade Update, said that although the administration is maintaining all the tariffs, adding a few products and hiking tariffs on a few sectors, it does not see the tariffs as the solution to Chinese government actions to support market dominance in strategic sectors.

That targeting "cannot be solved unilaterally," he said. While it's difficult to work with allies to coordinate a response, "we do think we're making important progress."

U.S. China Business Council President Craig Allen, also on the panel, said that work "is not going very well," and that European firms' exports are growing in important sectors like airplanes and industrial machinery, while ours are shrinking.

Panelist Sara Schuman, a former USTR representative in Beijing now on temporary detail with the House Select Committee on China, said that since 2018, there has been congressional shift on what policies are mainstream. She said policies once seen as radical now seem not only reasonable but even necessary. "Sticking to the old way of doing things seems irresponsible," she said.

That said, Schuman said the committee didn't recommend ending most favored nation tariff rates for China, even if it sees the permanent granting of normal trade relations as an error, in hindsight.

"We need to very seriously lessen our dependencies on China which can be weaponized," she said, because we have seen that the Chinese government will coerce companies to do what it asks when it sees those actions as in the national interest.

Schuman defended laws that Congress has passed that target goods from a company that's majority Chinese owned or controlled -- as well as the law shepherded by the committee's past leader to ban TikTok because it is controlled by China.

"It’s very common for Chinese companies to be under a lot of pressure from the government," she said. "That has gotten much worse in the last five years. There was a line at some point between the private sector and the government; that line has all but been erased."

Schuman advised attorneys in the audience to read letters sent by the committee's leadership -- they provide insight into what legislation Congress will tackle next.