USTR to modify China tariffs under Section 301 following four-year review

The Office of the U.S. Trade Representative (USTR) today released the four-year review of actions taken in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. Read the USTR report (193 pages)

A related USTR release explains that the USTR recommended that products from China currently subject to Section 301 tariffs should remain. Additionally, in light of the increased burden on U.S. commerce, President Biden is directing the USTR to add or increase tariffs for certain products.

The report also makes recommendations for:

• Establishing an exclusion process targeting machinery used in domestic manufacturing, including proposals for 19 exclusions for certain solar manufacturing equipment;
• Allocating additional funds to U.S. Customs and Border Protection (CBP) for greater enforcement of Section 301 actions
•  Greater collaboration and cooperation between private companies and government authorities to combat state-sponsored technology theft
• Continuing to assess approaches to support diversification of supply chains to enhance our own supply chain resilience

President Biden is also directing the USTR to establish an exclusion process for machinery used in domestic manufacturing and to prioritize exclusions for certain solar manufacturing equipment.

The White House issued a fact sheet identifying the following tariff rate increases:

• From 0–7.5% to 25% in 2024 on certain steel and aluminum products under Section 301
• From 25% to 50% by 2025 on semiconductors
• From 25% to 100% in 2024 on electric vehicles under Section 301
• From 7.5%% to 25% in 2024 on lithium-ion EV batteries, from 7.5% to 25% in 2026 on lithium-ion non-EV batteries, and from 7.5% to 25% in 2024 on battery parts
• From zero to 25% in 2026 on natural graphite and permanent magnets, from zero to 25% in 2024 for certain other critical minerals
• From 25% to 50% in 2024 on solar cells (whether or not assembled into modules)—read a related White House fact sheet (May 16, 2024) on solar manufacturing
• From 0% to 25% in 2024 on ship-to-shore cranes
• From 0% to 50% in 2024 on syringes and needles; from 0–7.5% to 25% in 2024 for certain personal protective equipment (PPE), including certain respirators and face masks; and from 7.5% to 25% in 2026 on rubber medical and surgical gloves

• The USTR in May 2022 commenced the statutory four-year review process by notifying representatives of domestic industries that benefit from the tariff actions of the possible termination of those actions and of the opportunity for the representatives to request continuation.  
• The USTR in September 2022 announced that because requests for continuation were received, the tariff actions had not terminated and USTR would conduct a review of the tariff actions. 
  
• The USTR opened a docket on November 15, 2022, for interested persons to submit comments with respect to a number of considerations concerning the review. The USTR received nearly 1,500 comments.

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