International Trade Today is providing readers with the top stories from last week in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Section 301 Tariffs
Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.
The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump Administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump Administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions—particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.
The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Almost three quarters of U.S. imports from China were subject to Section 301 tariffs, which ranged from 15% to 25%. The U.S. and China engaged in negotiations resulting in the “U.S.-China Phase One Trade Agreement”, signed in January 2020.
The Biden Administration took steps in 2021 to eliminate foreign policies subject to Section 301 investigations. The administration has extended and reinstated many of the tariffs enacted during the Trump administration but is conducting a review of all Section 301 actions against China.
House Majority Leader Steny Hoyer, D-Md., said it would be good if the House and Senate could name their respective conferees to the committee that will aim to hash out a compromise between the two chambers' China packages. He said the next two weeks, when Congress will not be in Washington, could be put to good use by the members. But Hoyer suggested the House will wait until the Senate passes its motion to go to conference, and gives its negotiating instructions.
The following lawsuits were filed at the Court of International Trade during the week of March 28 - April 3:
The unanimous three-judge opinion at the U.S. Court of International Trade remanding the lists 3 and 4A Section 301 tariffs to the Office of the U.S. Trade Representative on April 1 for correcting deficiencies in the agency’s Administrative Procedure Act compliance extends the current litigation at least until mid-summer. The opinion, written by Chief Judge Mark Barnett and coming two months to the day after Feb. 1 oral argument was held (see 2202010059), gives USTR 90 days, to June 30, to respond to the remand order, and orders the plaintiffs and the government to submit a joint status report 14 days after that, including a proposed schedule on “the further disposition of this litigation.”
The Court of International Trade dealt a blow to the over 3,600 lawsuits challenging Lists 3 and 4A Section 301 China tariffs covering over $200 billion in goods, finding that the U.S. Trade Representative had the authority to impose the tariffs. In the highly-anticipated opinion, the court ruled against the plaintiffs' argument that the USTR could not impose Section 301 tariffs because the government was responding to retaliatory tariffs from China.
The Office of the U.S. Trade Representative “properly exercised its authority” under the Section 307 modification provisions of the 1974 Trade Act when it ordered the imposition of the lists 3 and 4A Section 301 tariffs on Chinese imports, the Court of International Trade ruled in an April 1 opinion. Test-case plaintiffs HMTX Industries and Jasco Products, plus the more than 3,600 complaints that followed, sought to vacate the tariffs on grounds that lists 3 and 4A were unlawful without USTR launching a new Section 301 investigation.
Senators on the committee that oversees trade pressed U.S. Trade Representative Katherine Tai repeatedly on why the administration isn't engaged in negotiations with other countries to get them to lower their tariffs, so that U.S. exporters, particularly agricultural producers, can gain more market share. Both Democrats and Republicans questioned the decision to pursue the Indo-Pacific Economic Framework as something other than a traditional free trade agreement,
CBP issued the following releases on commercial trade and related matters:
U.S. Trade Representative Katherine Tai endorsed the Level the Playing Act during a four-hour hearing in front of the House Ways and Means Committee after one of its House sponsors noted the House and the Senate are about to go to conference, and the proposal to rewrite antidumping duty and countervailing duty laws is going to be on the table.
The following lawsuits were filed at the Court of International Trade during the week of March 21-27: