Dive Brief:
- The Office of the United States Trade Representative has begun a review of Section 301 tariffs on China imports implemented during the first Trump administration, according to a Federal Register filing published Wednesday.
- The process is the second such four-year review of two separate 25% levies installed in 2018 that cover a combined $32 billion of imports across more than 500 tariff subheadings, per the filing. The tariffs were later maintained and expanded under the Biden administration.
- In the first phase of the review initiated this week, the USTR is asking domestic industries that may benefit from the levies to submit requests to continue the levies at least 60 days prior to May 7 and July 5, respectively, which mark the anniversaries of when the two tariffs were put in place.
Dive Insight:
Section 301 has been stealing the spotlight in recent weeks, as the USTR reviews previous levies implemented under the Trade Act of 1974 provision while holding public hearings as part of two other investigations tied to the statute.
“Section 301 tariffs are no longer just a ‘temporary trade measure,’” Kelly Nelson, managing director of trade and customs at KPMG, said in a LinkedIn post. “They’ve become deeply embedded into sourcing strategies, pricing models, compliance programs, and long-term supply chain planning.”
The review process of the 2018 Section 301 tariffs begun this week requires at least one request for continuation from affected domestic industries to continue to a second phase. If the review reaches this stage, the USTR will solicit public comment about the effectiveness of the tariffs and their impact on the U.S. economy, per the Wednesday filing.
Following the first four-year review, the Biden administration maintained the 2018 levies and increased tariff rates for numerous goods, including electric vehicles, batteries and semiconductors.
“And because nothing in trade policy ever truly dies, those tariffs stuck around through multiple administrations… and now we’re reviewing them again to decide whether they stay, change, or just get a fresh coat of paint,” Pete Mento, director of global trade advisory services at Baker Tilly, said in a LinkedIn post.
The latest review comes less than a year after the USTR launched a Section 301 probe into China’s compliance with a 2020 trade pact. It is also taking place as U.S. President Donald Trump and China President Xi Jinping prepare to meet next week in Beijing.
Meanwhile, although the 2018 levies specifically target goods from China, the Trump administration’s most recent Section 301 investigations have taken a broader scope.
In March, the USTR launched a pair of probes under the statute to evaluate potential manufacturing overcapacity and compliance with forced labor bans. The investigations target numerous U.S. trading partners, including China, the European Union and Mexico, and came quickly after the Supreme Court invalidated a swath of tariffs Trump installed last year under the International Emergency Economic Powers Act.
“Section 301 has basically become the Swiss Army knife of U.S. trade enforcement,” Mento said. “If the government thinks another country is playing dirty, this is the tool they reach for.”
As part of the fresh Section 301 investigations, in the last two weeks, the USTR has held public hearings seeking comments from stakeholders.
In comments delivered this week, Jonathan Gold, VP of supply chain and customs policy at the National Retail Federation, urged the administration to “avoid one-size-fits-all remedies; where action is warranted, pursue sector-specific findings and narrowly tailored measures,” in relation to the investigation into manufacturing overcapacity.
