Extension of China 301 Tariff Exclusions Requested by Businesses

Trade Update • Oct. 12, 2022

he Americans for Free Trade (AFT), a broad coalition of American businesses, trade organizations, and workers united against tariffs, recently sent a letter to the office of United States Trade Representative (USTR) Katherine Tai regarding Section 301 tariff exclusions which are set to expire in the coming months, calling for USTR to both renew existing exclusions and create a more robust exclusions process moving forward.

“As American businesses continue to face high inflation, ongoing supply chain challenges, and new COVID variants, we urge USTR to provide additional relief by promptly renewing all the exclusions which are set to expire this year,” Americans for Free Trade wrote. “This move will provide some certainty for American companies and help maintain their competitiveness – especially those who import products where there is no domestic or other sourcing alternative – as well as ensure continued access to life saving goods.”

352 exclusions (full list here) were reinstated retroactively from Oct. 12, 2021 and extend through December 31, 2022, allowing importers to seek refunds on Section 301 tariffs paid on goods covered, whether or not they requested the original exclusion.

More than 170 trade associations signed on to the letter. The full text of the letter may be found here and below.

Letter

October 4, 2022

The Honorable Katherine Tai
United States Trade Representative
600 Seventeenth Street, N.W.
Washington, D.C. 20508

RE: Extension of Section 301 China Tariffs Exclusions

Dear Ambassador Tai:

On behalf of the undersigned members of Americans for Free Trade, we are writing to request an immediate extension for the limited China 301 tariff exclusions which are set to expire on December 31, as well as the COVID exclusions set to expire this November. It is critical that USTR announce its plans for these exclusions now so that companies can plan accordingly.

Our companies and associations joined together to form Americans for Free Trade in 2018. Our coalition represents every part of the U.S. economy including manufacturers, farmers and agribusinesses, retailers, technology companies, powersports, service suppliers, natural gas and oil companies, renewable energy companies, importers, exporters, and other supply chain stakeholders. Collectively, we employ tens of millions of Americans through our vast supply chains.

In the last four years, American importers, including members of our coalition, have been assessed close to $155 billion in section 301 tariffs on products from China. The exclusions granted earlier this year provided limited relief for some companies. Although all these exclusions will expire in the coming months, to date USTR has made no announcement about whether to extend any of them, or even whether the agency supports having any exclusions process at all. Because American businesses must make supply chain and sourcing decisions many months in advance, the uncertainty created by USTR’s inaction compels our companies to incorporate 25 percent price increases into product lines that may soon be without a Section 301 tariff exclusion. Upward pricing pressure of this kind will exacerbate inflation in an economy already teetering on the edge of stagflation, leaving consumers – and particularly low-income consumers – with reduced purchasing power and placing more goods out of their reach.

As American businesses continue to face high inflation, ongoing supply chain challenges, and new COVID variants, we urge USTR to provide additional relief by promptly renewing all the exclusions which are set to expire this year. This move will provide some certainty for American companies and help maintain their competitiveness – especially those who import products where there is no domestic or other sourcing alternative – as well as ensure continued access to life saving goods.

In addition, we renew our request for USTR to create a more robust exclusions process – one that is open to all products covered by the China 301 tariffs. We know this sentiment is shared by at least 141 bipartisan House members and 41 bipartisan Senators who have previously made a similar request. As long as the section 301 tariffs remain in place, there should be a fair, transparent, and robust exclusions process available so that American businesses can apply for targeted relief.

American families, workers and businesses continue to cope during these unprecedented economic challenges, and we believe the administration should use every available tool to provide economic relief and certainty going forward. Renewing exclusions that are set to expire and opening up a new and robust exclusions process will help provide that.

Sincerely,

Full List of Business Here