Trade Compliance Flash: USTR Will Conduct Review of Necessity on China Tariffs
The Office of the U.S. Trade Representative (USTR) announced this week that it is seeking public comments on the necessity of the tariffs imposed on China-origin imports. An online portal for these comments will open November 15, 2022, and close January 17, 2023.
As a refresher, the U.S. imposed additional tariffs on China-origin products pursuant to Section 301 of the Trade Act of 1974. The tariffs were implemented in four tranches – known as Lists 1, 2, 3, and 4A – each covering certain Harmonized Tariff Schedule (HTS) codes. In September, around the four-year anniversary of the tariffs, USTR announced that it would maintain the tariffs while it conducted a review of the necessity.
To that end, USTR is inviting interested persons to submit comments on:
- The effectiveness of the tariffs in eliminating or countering China's acts, policies, and practices related to technology transfer, intellectual property, and innovation
- Other acts of modifications that might be more effective in obtaining the elimination of, or countering, China's acts, policies, and practices related to technology transfer, intellectual property, and innovation
- The effects of the tariffs on the U.S. economy, including U.S. consumers
- The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits
- The effects of the tariffs on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development
- The effects of the tariffs on U.S. workers, including with respect to employment and wages
- The effects of the actions on U.S. small businesses
- The effects of the actions on U.S. supply chain resilience
- The effects of the actions on the goals of U.S. critical supply chains outlined in Executive Order 14017 and in subsequent reports and findings
- Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the U.S. than the additional duties on particular downstream products or finished goods incorporating those inputs
USTR will publish a list of questions by November 1 that is intended to facilitate the preparation of comments for the portal that will open November 15. USTR's comment docket will allow parties to submit confidential data.
This is a good opportunity for companies to explain to USTR how the tariffs are affecting their U.S. investments and to advocate for their repeal (or continuation). Notably, USTR Katherine Tai has stated repeatedly that she views tariffs on Chinese goods as "a significant piece of leverage" in the U.S.-China trade relationship and removing them would likely have a limited effect on controlling short-term inflation.
The Section 301 litigation at the U.S. Court of International Trade (CIT), which challenges the imposition of List 3 and List 4A tariffs from their beginnings in 2018 and 2019 to the present, will continue in parallel with USTR's review of whether to repeal or continue all four tranches of the Section 301 tariffs. Importers of List 3 and 4A products from China may still be able to preserve their rights to possible tariff refunds by joining the ongoing court case.
Please contact us if you would like assistance in submitting comments or are considering joining the litigation by filing a claim at the CIT.
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