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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. Subsequent rounds of Section 301 actions against China have continued since. The Office of the U.S. Trade Representative administers Section 301 tariffs, and has also created an exclusion process for importers to seek exemptions from the tariffs.

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USTR Warns Canada DST Could Trigger Section 301 Tariffs
February 22, 2022 by Mara Lee|USTR

The Office of the U.S. Trade Representative is asking Canada to "abandon any plans" for a digital services tax while countries continue to negotiate international taxation principles, including how to tax companies that derive revenues from a country's population but do not have a physical nexus there.

Technical Amendments to Section 301 Tariffs Took Effect Jan. 27
February 18, 2022 |USTR

In January, some technical fixes had to be made to the Harmonized Tariff Schedule "to conform to amendments adopted by the World Customs Organization" (see 211227003). To now fix a technical error that occurred with that and to ensure that those "amendments do not extend the scope of the additional duties in the Section 301 investigation," the Office of the U.S. Trade Representative issued a notice about two technical modifications to the HTS notes that implement the additional duties. The modifications are effective as of Jan. 27.

Topics:Customs duty
AAFA Says Inflation Numbers Should Lead to Lowered Tariffs
February 11, 2022 by Mara Lee|Trade Business

The American Apparel and Footwear Association, after the government Consumer Price Index for January showed apparel prices up 5.1% and footwear prices 6.1% higher compared with January 2021, is arguing for an "immediate elimination and refund of punitive Section 301 tariffs on U.S. imports from China." CEO Steve Lamar asked the Biden administration Feb. 10 "to pursue swift and effective policies to immediately alleviate the increasingly overwhelming costs on companies and address the shipping crisis," and to get involved with the port labor negotiations for West Coast ports. That contract expires this summer.

China Phase 1 Purchase Commitments for Goods Only 60% of Promised
February 8, 2022 by Mara Lee|Other U.S.

With new data out about exports to China, economist Chad Bown of the Peterson Institute for International Economics says that China only bought 60% of the goods it promised, and about 57% of all it promised, when services are included. In all, China said it would buy $502.4 billion from U.S. sources in 2020 and 2021.

41 Senators Ask USTR to Open Broad Exclusion Process
February 7, 2022 by Mara Lee|Congress

Almost half of the Senate's Republicans and a third of its Democrats are asking U.S. Trade Representative Katherine Tai to open an exclusion process for all importers of Chinese goods covered by Section 301 tariffs, and to presumptively exclude any product of which nearly all the imports are coming from China. Lead authors Sen. Rob Portman, R-Ohio, and Sen. Tom Carper, D-Del., say that if importers haven't moved out of China after years of higher tariffs, that "suggests that moving these supply chains out of China is uniquely unlikely, and that our efforts to diversify production locales and reshore manufacturing would be better spent on other products."

Topics:Section 301 tariff exclusions