USTR releases 4-year review of China tariffs, to take further action

A four-year review of tariffs imposed by former President Donald Trump (in the Section 301 investigation) concluded they had effectively encouraged China to address some issues, but the office of USTR said while releasing the review that further action is needed.

Tai recommended that products from China currently subject to Section 301 tariffs should remain. Additionally, in light of the increased burden on US commerce, President Joe Biden is directing Tai to take action to add or increase tariffs for certain products.

The review report recommends establishing an exclusion process targeting machinery used in domestic manufacturing; allocating additional funds to US 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; and continuing to assess approaches to support diversification of supply chains to enhance US supply chain resilience.

Biden is also directing Tai to establish an exclusion process for machinery used in domestic manufacturing and to prioritise, in particular, exclusions for certain solar manufacturing equipment.

Expressing disappointment, the National Retail Federation (NRF) said the US administration has chosen to “double down on a failed and inflationary strategy” by sustaining and expanding the Section 301 China tariffs.

In a statement, NRF's executive vice president of government relations David French said the ongoing Section 301 China tariffs have not worked to force China to change its trade practices and maintaining these tariffs on consumer goods will raise costs.

“We need a new strategy that will address the core issues and provide actual incentives for U.S. companies to shift their supply chains from China,” he added.

The American Apparel & Footwear Association (AAFA) has said that the decision to extend Section 301 tariffs on a wide range of apparel, footwear, accessories, and textiles—while not unexpected—is a real blow to American consumers and manufacturers alike.

“Tariffs are regressive taxes that are paid by US importers and US manufacturers and ultimately passed along to US consumers. At a time when hardworking American families are struggling with inflation, continued tariffs on consumer necessities are entirely unwelcome," said AAFA president and CEO Steve Lamar. "The Biden Administration has had two years to get it right. Unfortunately, they doubled down on a flawed tariff policy, despite the Biden Administration's own acknowledgment that this policy has failed in its goals, and overwhelming public input that supported a different outcome."

“It was critical that the administration maintain penalty duties on finished textiles and apparel imports from China and increase tariffs on certain imports of personal protective equipment (PPE), and that was an appropriate and foundational decision. However, we believe an opportunity was missed to address China’s continued dominance in the US textile market and to counter the devastating impact of its predatory and illegal trade practices on domestic textile manufacturers and workers,” National Council of Textile Organisations (NCTO) president and chief executive officer Kim Glas said in a statement.

Due to rapidly deteriorating market conditions, NCTO urged the administration to further increase tariffs on finished textile and apparel and certain inputs, as the sector is facing severe economic headwinds due to China’s dumping of products.

Fibre2Fashion News Desk (DS)