Although utilities that are installing wind and solar operations and wind turbine manufacturers would like antidumping duty and countervailing duty laws to change to take public interest into account, panelists at Georgetown Law's International Trade Update acknowledged it will probably never happen.
Section 301 tariff exclusions
The Office of the U.S. Trade Representative has established an exclusion process for Section 301 tariffs on China. In a series of rounds since the tariffs took effect, importers have been able to request exclusions from the tariffs, as well as extensions to existing exclusions. Many exclusions have been allowed to expire, as well. Section 301 exclusions are applicable to all importers of a given good, which may be defined as an entire tariff schedule subheading or a subset of a subheading outlined in a written description.
House Majority Leader Steny Hoyer, D-Md., said he hopes to get "the essence of an agreement" on merging the House and Senate China bills by the end of this month. "I don't mean we're going to have everything agreed to." He said he hopes that each committee delegation can either settle or get very close to finishing their segments by then, though he said some issues will have to be passed up to leadership. "And then I'm hopeful we can get the Competes bill done by the end of next month. That I know is a very ambitious, perhaps naive expectation." He acknowledged there are "real differences" between the two versions.
The AFL-CIO told China bill conferees that renewing Trade Adjustment Assistance, making changes to trade remedies laws, creating outbound investment screening and removing Chinese exports from de minimis eligibility "should be included in any competitiveness package that purports to challenge China's increasing economic dominance."
While the Biden administration faces very little legal constraint to continuing the Section 301 tariffs on the vast majority of Chinese imports, trade experts at the Wiley firm said that the administration is under pressure for a variety of reasons to make a decision on whether they are going to change their approach to the tariffs. So far, the Office of the U.S. Trade Representative has reinstated fewer than 500 exclusions, either due to the COVID-19 pandemic or to a limited review, and has not offered to renew the bulk of the 2,129 exclusions that were granted during the previous administration.
The Biden administration's approach to changing Section 301 tariffs is "a work in progress," said Sarah Bianchi, a deputy U.S. trade representative, while at a May 11 National Council of Textile Organizations conference. Her comments, which avoided directly answering a question of whether the administration position is that tariffs on apparel are not strategic, came a day after President Joe Biden told reporters that administration officials are discussing whether any Section 301 tariffs should be lowered or removed, "and no decision has been made on it."
Sidley lawyer Ted Murphy says he doesn't expect a review of Section 301 tariffs to lead to a policy change on the tariffs, which cover about $300 billion worth of Chinese imports annually. He said that even though a review of the tariffs has to evaluate how effective the actions have been, and has to analyze how the tariffs have affected consumers, "if it ultimately concludes that the additional duties have been only mildly effective and/or have had a negative impact on U.S. interests (businesses and/or consumers), there is no requirement that the USTR take any action. As a result, we do not think that this effort is likely to present a meaningful opportunity for change." Murphy wrote those sentences in bold, for emphasis. Still, he said it is possible, given the messages from some corners of the administration that goods such as bicycles or apparel should not be facing higher tariffs, that "additional duties on certain non-strategic consumer goods may be lifted."
Slightly more than half of senators want language instructing the Office of the U.S. Trade Representative to reopen a broad exclusion process for China tariffs to make it into the compromise China package, according to a late-night vote May 4. Unlike most votes in Congress, support did not break down mostly along party lines. One independent who caucuses with Democrats and 23 Democrats, including Senate Finance Committee Chairman Ron Wyden, D-Ore., voted for the motion to instruct negotiators to include the language in the final bill; 29 Republicans, also voted for it, including Senate Minority Leader Mitch McConnell of Kentucky and Indiana's Todd Young, one of the original movers to get the U.S. Innovation and Competition Act. Sen. Pat Toomey, R-Pa., asked for the motion, and he is also on the conference committee to blend USICA and the House China package. There were four senators absent from the vote.
Hours before the Senate was due to consider his non-binding instruction to negotiators on the China package to retain language directing the Office of the U.S. Trade Representative to reopen a Section 301 exclusion process, Sen. Pat Toomey, R-Pa., warned that if USTR didn't open such a process if the language becomes law, he would see that as a misuse of power.
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The top Republican on the House Ways and Means Committee, who will be one of the negotiators for the compromise China package, expressed pessimism that a version of the bill can be found that can get a majority vote in both the House and Senate. The Senate passed its version, the U.S. Innovation and Competition Act, with 67 votes; the House version, known as the Competes Act, only had one Republican on board.