The 22-person witness list for the Dec. 29 virtual Section 301 investigative hearing into allegations that Vietnam deliberately undervalued its currency to thwart U.S. economic growth is stacked heavily with people on record as opposing remedial tariffs on Vietnamese imports. Prehearing submissions in docket USTR-2020-0037 foretell some will also testify that the Office of the U.S. Trade Representative is singling out the wrong country for Section 301 currency manipulation review and is doing so for ulterior motives.
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 Office of the U.S. Trade Representative released a list of witnesses slated to testify during the Dec. 29 Section 301 hearing on Vietnam currency manipulation. The agency hasn't addressed a request from trade associations that USTR delay the hearing in order to consider a Dec. 16 Treasury Department report blasting the Vietnam government for tampering with the foreign exchange market “in a sustained, asymmetric manner,” to the detriment of U.S. interests. Treasury released the report nearly a week after the deadline passed for submitting requests to appear at the USTR hearing.
The Office of the U.S. Trade Representative will extend exclusions on goods used to treat COVID-19 from the Section 301 tariffs on goods from China, it said in a notice posted on the agency's website. “In light of the rising spread and ongoing efforts to combat COVID-19, the U.S. Trade Representative has determined that maintaining or re-imposing additional duties on certain products subject to the action no longer is appropriate and that the application of additional duties to these products could impact U.S. preparedness to address COVID-19,” it said.
The Office of the U.S. Trade Representative will extend exclusions on goods used to treat COVID-19 from the Section 301 tariffs on goods from China, it said in a notice posted on the agency's website. "In light of the rising spread and ongoing efforts to combat COVID-19, the U.S. Trade Representative has determined that maintaining or re-imposing additional duties on certain products subject to the action no longer is appropriate and that the application of additional duties to these products could impact U.S. preparedness to address COVID-19," it said.
The following lawsuits were filed at the Court of International Trade during the week of Dec. 14-20:
The Consumer Technology Association would be “extremely affected and disappointed” by any Trump administration rush to impose Trade Act Section 301 tariffs on Vietnamese imports before leaving office, President Gary Shapiro said in a Dec. 16 interview. “Our industry has suffered, in the national interest in a sense, because of U.S. positions taken on China,” he said, and additional tariffs on goods from Vietnam would be an unexpected, secondary blow.
The following lawsuits were filed at the Court of International Trade during the week of Dec. 7-13:
International Trade Today is providing readers with the top stories from Dec. 7-11 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Seventy-five House members, led by Rep. Jackie Walorski, R-Ind., Rep. Collin Peterson, D-Minn., Rep. Ron Kind, D-Wis., and Rep. Darin LaHood, R-Ill., are asking U.S. Trade Representative Robert Lighthizer to automatically extend all product exclusions for the China tariffs. Their letter, sent Dec. 11, says that some expiring exclusions cover personal protective gear and equipment that would be used to administer vaccines. “Additionally, extending these exclusions will provide needed certainty for employers and help save jobs,” they wrote. “We recognize that the exclusions were granted in part on the premise that businesses need adequate time to relocate their supply chains out of China. However... [w]ith global travel essentially shut down, it has been difficult, if not impossible, for company representatives to travel to and inspect potential new sites and to build relationships with new partners.”
Golf clubs assembled in Mexico from titanium heads manufactured in Taiwan and carbon fiber shafts from China must be marked products of both, and the value of the shaft is subject to Section 301 tariffs, CBP said in a Dec. 2 ruling. The golf clubs do not undergo a substantial transformation in Mexico nor the required USMCA tariff shift, and both the shaft and head give the golf clubs their essential character, CBP said in ruling HQ H312495, posted to the agency’s ruling database on Dec. 10.