President Donald Trump didn't get China to agree to much in the way of structural changes, panelists said, but Asia Society Policy Institute Vice President Wendy Cutler said he put China front and center on the agenda, which was good. “He was really willing to take on the business community when it came to China,” she said. Cutler, who worked at the Office of the U.S. Trade Representative for more than 25 years, said that when she was at USTR, one of her frustrations in trying to negotiate with China was that U.S. “companies were pretty conflicted. They liked the … money they were making. They wanted us to be quote, unquote tough with China, but they didn’t want to be part of the get-tough strategy. Our hands were tied in a way.”
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.
The Court of International Trade will use a “master case” to reduce the time and expense of duplicate filings in the more than 3,700 lawsuits against President Donald Trump's lists 3 and 4A Section 301 China tariffs, CIT Judge Mark Barnett said in a Feb. 10 order. Barnett also gave the government defense until March 12, 2021, to submit its first defense, barring no motions to extend time to file. These procedural steps pertain to the copious number of Section 301 cases that were assigned to a three-panel judge at CIT on Feb. 5 (see 2102050008).
The following lawsuits were filed at the Court of International Trade during the week of Feb.1-7:
International Trade Today is providing readers with the top stories from Feb. 1-5 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
The International Trade Commission recently posted Revision 3 to the preliminary edition of the 2021 Harmonized Tariff Schedule. Changes include implementation of extended and revised Section 201 safeguards on large residential washers, as announced in a proclamation issued by former President Donald Trump in mid-January (see 2101150049). Minor changes are also made to an exclusion from Section 301 China tariffs for supported catalysts with zinc oxide as the active substance.
A three-judge Court of International Trade panel will oversee all cases tackling the legality of lists 3 and 4 Section 301 China tariffs, Chief Judge Timothy Stanceu said in an order signed Feb. 5. Judges Mark Barnett, Claire Kelly and Jennifer Choe-Groves -- the three most senior active judges on the court -- were assigned to hear one of the largest mass filings in the court's history.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 25-31:
Economics Professor Mary Lovely, who studies multinationals' operations in China, told the U.S.-China Economic and Security Review Commission that the trade war didn't make the U.S. less reliant on China, and that export controls designed to isolate China have not been effective, either. She noted that China is still the top exporter to the U.S., and their goods make up 17% of U.S. imports. The Commission met online Jan. 28.
More than 3,500 Section 301 complaints have inundated the U.S. Court of International Trade challenging the lawfulness of the lists 3 and 4A tariffs on Chinese imports, “and there’s likely more to come,” trade lawyer John Brew of Crowell & Moring told a Sports and Fitness Industry Association webinar Jan. 26.
Robert Lighthizer, immediate past U.S. trade representative, said that during his time in office, every decision was based on “how it brings manufacturing jobs back to the United States,” and, he said, “I think you’re hearing the same kind of language out of the Biden administration, for which I’m grateful.”