USTR formally announced Wednesday that the agency will open a portal on November 15 to receive public comment on “the effectiveness of the (Section 301 / China tariff) actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.”

This is the next step in the four-year review of the China tariffs imposed under the Trump Administration and continued by the Biden Administration.

Call for Public Comment Includes List 3 and List 4 Tariffs

While the notice specifically refers to List 1 and List 2 tariffs, which are formally referred to as the “July 6, 2018 action, as modified” and the “August 23, 2018 action, as modified”, respectively, the notice also covers List 3 and List 4 tariffs.

The notice states that the July 6, 2018 and August 23, 2018 actions “were subsequently modified by imposing additional duties on supplemental lists of products, known as Lists 3 and 4, as well as by the temporary removal of duties on certain products through product exclusions.”

We confirmed with USTR this morning that USTR expects comments on Lists 3 and 4 as part of this process and will not be conducting a separate process for List 3 and List 4 tariffs.

USTR Seeking the Following Information from the Public

USTR indicated it would post specific questions on November 1. We expect the questions to generally align with this list that was included in yesterday’s notice:

  • The effectiveness of the actions in obtaining the elimination of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • The effectiveness of the actions in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • Other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • The effects of the actions on the U.S. economy, including U.S. consumers.
  • The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits.
  • The effects of the actions on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development.
  • The effects of the actions on U.S. workers, including with respect to employment and wages.
  • The effects of the actions on U.S. small businesses.
  • The effects of the actions on U.S. supply chain resilience.
  • The effects of the actions on the goals of U.S. critical supply chains outlined in Executive Order 14017 and in subsequent reports and findings.
  • Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the United States than the additional duties on particular downstream product(s) or finished good(s) incorporating those inputs.

Comments are due to USTR by January 17, 2023. In the notice that USTR issued yesterday, the agency indicated that it “will evaluate whether to provide additional opportunities for public comment through additional written comments or through public hearings. Any further opportunities for public comment will be addressed in subsequent notices.”

Expectations for Congressional Action Decline Further

The fact that USTR has initiated the public comment process likely means that Congress will decline to legislate on the issue during the post-election lame duck session of Congress.

This reality is reflected in comments made yesterday by Rep Darin LaHood (R-IL), who has been one of the strongest advocates in Congress for a China tariff exclusion process. Here is what LaHood said yesterday: “I’m not a fan of tariffs … [but] if you look at these predatory trade practices that China continues to engage in, what options do you have left except for tariffs?”

 

 

LACBFFA October 14, 2022