Industry News

Key Senators Push to Keep China Tariffs

Nov. 28, 2023
By: Chaney A. Finn

The United States and China have had a difficult trade relationship over the last decade or so. Each country has have levied hefty tariffs on the other’s imports yet remain among each other’s largest two-way trading partners. The U.S. also relies on China for much of the critical minerals used in semiconductors, which we have covered extensively.

Among the heavy duties imposed by the United States is a (usually) 25 percent tariff on Chinese products under Section 301 instituted in July 2018 under the Trump administration. In addition, the Trump Administration imposed duties under Section 232 applying only to steel and aluminum products. Also, Section 232 applies not only to China, but to most other countries in the world. It is aimed at protecting domestic steel and aluminum production by implementing a tariff on the imported steel and aluminum. We have been reporting out on this for some time.

The Biden administration is currently conducting an interagency review of Section 301 and 232 which could result in the reduction or elimination of these tariffs. Senators Sherrod Brown (D-OH) and Bob Casey (D-PA) wrote a letter to President Biden expressing their concerns the possible tariff reductions could have on China’s behavior. China’s non-market practices and human rights violations have not been curbed by the tariffs and additional measures have been taken, such as the Uyghur Forced Labor Prevention Act UFLPA, which established a rebuttable presumption that the importation of any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China is prohibited entry into the U.S. as the product of forced labor.

In their letter, the Senators refer to the tariffs as essential to countering China's unfair trade practices, stating:

"We urge the Administration to maintain the Section 301 and Section 232 tariff regimes as we continue our work with partners and allies to forge a sustainable approach to trade policy that supports American workers and fair global economic competitiveness. A 2022 report from USTR on China’s compliance with the World Trade Organization only underscores that the underlying economic reasons and market conditions for why the tariffs were imposed have not changed."

Just last year, the  U.S.-China Economic and Security Review Commission published its 2022 annual report recommending that China be suspended from Permanent Normal Trade Relations treatment for non-compliance with its World Trade Organization accession provisions. Removal from the PNTR would result in some of the highest tariffs and trade barriers into the U.S. market and would align with recent policies the U.S. has taken to isolate China from the U.S. economy, consistent with the objective of Section 301 and 232 tariffs in the first place.

The Biden administration had an opportunity to remove the tariffs previously but kept them in effect due to the negotiating leverage the tariffs represented. This suggests that a full elimination of the tariffs would be unlikely. No official announcement has been made about reducing the rates or scope of the lists containing Chinese – goods subject to the tariffs. Despite the fact, there are parties interested in maintaining, or even increasing these trade barriers with China.

Should you have any questions regarding Section 301, 232, or any other trade-related questions, do not hesitate to contact any attorney at Barnes, Richardson & Colburn, LLP.