House Ways and Means Committee Trade Subcommittee Chairman Earl Blumenauer, D-Ore., cast doubt on Congress voting to renew the Generalized System of Preferences trade benefits program before it expires, and on passing a new Miscellaneous Tariff Bill to cover imports in 2021 and 2022. He told an online audience at the Washington International Trade Association Sept. 23 that it's too soon to say whether a vote would be possible.
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.
International Trade Today is providing readers with the top stories from Sept. 14-18 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Whether the deadline has passed for court challenges to lists 3 and 4 of Section 301 tariffs of goods from China continues to be in question, lawyers following the case have said. While some have pegged the deadline to Sept. 21 based on a two-year statute of limitations from when the List 3 tariffs were published in the Federal Register (see 2009160056), other factors remain in play. Filing sooner rather than later is seen as preferable, the lawyers said.
The Court of International Trade is deluged with hundreds of lawsuits that closely model a challenge from Akin Gump and HMTX Industries that seeks to force refunds of Section 301 tariffs paid on lists 3 and 4 goods from China (see 2009110005). Such a torrent of filings is rare but not unheard of at the CIT, lawyers involved with and following the litigation said. The most obvious example was the yearslong litigation over the harbor maintenance tax (HMT), they said.
Light-emitting diode lamps imported by Grakon for incorporation into automobiles originate in the country where the lights inside the lamps were assembled, Mexico, rather than the country of the lamps’ final assembly, and are not subject to Section 301 tariffs on products from China, CBP said in a recent ruling.
Over 300 exclusions from Lists 1 and 2 of Section 301 China tariffs are set to end Sept. 20, after the Office of the U.S. Trade Representative did not include them in two notices of exclusion extensions released Sept. 17. In its notice on List 1 exclusions, USTR granted extensions to 62 out of the 310 exclusions listed in U.S. Note 20(q) and filed under tariff schedule subheading 9903.88.14. USTR's notice on List 2 exclusions announced extensions to 17 out of the 86 currently listed in U.S. Note 20(v) and filed under subheading 9903.88.17.
More than 300 exclusions from lists 1 and 2 Section 301 China tariffs are set to expire Sept. 20, after the Office of the U.S. Trade Representative declined to extend them in the run-up to their expiration.
High tech goods from China that are eligible for USMCA treatment remain subject to applicable Section 301 tariffs, CBP said in a Sept. 11 ruling. The ruling is a follow-up to a ruling in August that addressed a question of whether goods that originate in China and imported from Mexico are eligible for USMCA treatment (see 2008110037). While CBP in the previous ruling said that such goods are eligible for USMCA treatment, the agency didn't say then whether the Section 301 tariffs would apply.
Importers that want to benefit from a lawsuit challenging list 3 and list 4A Section 301 tariffs on goods from China may face a tight deadline for filing their own cases at the Court of International Trade, law firms said in recent days. “This lawsuit, if successful, could result in the refund of all Section 301 tariffs levied on List 3 and List 4A goods from China,” the National Customs Brokers & Forwarders Association of America said in an emailed alert. “However, importers must file their own independent claims to preserve their potential refunds by Friday, Sept. 18.”
International Trade Today is providing readers with the top stories from Sept. 8-11 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.