The Office of the U.S. Trade Representative announced a new set of product exclusions for products on the fourth list of Section 301 tariffs on products from China. New subheading 9903.88.55 will be used for the exclusions, which will be found in U.S. Note 20(hhh) to subchapter III of chapter 99. The new set of exclusions are reflected in “one existing ten-digit HTSUS subheading and 9 specially prepared product descriptions, which together respond to 25 separate exclusion requests,” the notice said.
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.
Almost three-quarters of all exclusions from list three Section 301 China tariffs are now set to expire Aug. 7, after the Office of the U.S. Trade Representative declined to extend them in the run-up to their expiration. In a notice released Aug. 6, USTR only granted extensions to 266 of the about 1,000 list three exclusions published to date.
Most exclusions from list three Section 301 China tariffs are now set to expire Aug. 7, after the Office of the U.S. Trade Representative declined to include them in a notice of extensions released the day before their slated expiration. In the notice, USTR granted extensions until Dec. 31 to only 266 of the nearly 1,000 list three exclusions published to date. That leaves over 700 exclusions to expire on schedule.
The Office of the U.S. Trade Representative issued a new set of product exclusions from the fourth group of Section 301 tariffs on goods from China. The new exclusions from the tariffs include "one existing ten-digit HTSUS subheading and 9 specially prepared product descriptions, which together respond to 25 separate exclusion requests," according to the notice. The product exclusions apply retroactively to Sept. 1, 2019, the date the fourth set of tariffs took effect. The exclusions will be in effect until Sept. 1, 2020.
The International Trade Commission on July 30 issued Revision 18 to the 2020 Harmonized Tariff Schedule. This latest version implements extended exclusions from list two Section 301 tariffs on products from China under new subheading 9903.88.54 and new U.S. note 20(ggg) to subchapter III of chapter 99. The ITC also made a technical fix to general note 11 for USMCA. The changes are effective July 31.
International Trade Today is providing readers with some of the top stories from July 27-31 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
The Coalition of American Chassis Manufacturers seeks the imposition of new antidumping and countervailing duties on certain chassis and subassemblies thereof from China, it said in a petition filed with the Commerce Department and the International Trade Commission July 29. Commerce will now decide whether to begin AD/CVD investigations, which could result in the imposition of permanent AD/CV duty orders and the assessment of AD and CV duties on importers.
The Office of the U.S. Trade Representative is requesting comments on whether exclusions to tariffs on Chinese imports on Section 301 List 1 should be extended beyond Oct. 2, it said in an Aug. 3 notice. Comments are due by Aug. 30, it said. The evaluation's focus will be on whether, despite the first imposition of these additional duties, the particular product remains available only from China. The companies are required to post a public rationale.
A domestic manufacturer filed a petition on July 28 with the Commerce Department and the International Trade Commission requesting new antidumping duties on methionine from France, Japan and Spain. Commerce will now decide whether to begin AD duty investigation on methionine. The investigation was requested by Novus International.
Former U.S. trade representative Bob Zoellick laughed when a webinar moderator asked him how a pro-free-trade consensus can be re-established. Zoellick was on a Carnegie Endowment for International Peace webinar about the future of the global trading system with European Trade Commissioner Phil Hogan June 30. He said those who support free trade have always had a fight, because politics often align with protecting domestic producers from import competition.