Lawmakers Push for Reinstatement of Section 301 Tariff Exclusion Process

Trade Update • APRIL 24, 2021

A bipartisan group of 40 senators earlier this week called on U.S. Trade Representative Katherine Tai to renew all expired Section 301 tariff exclusions and to reinstate a process for granting additional exclusions in future.

Almost all previously granted tariff exclusions expired at the end of last year, making most goods imported from China once again subject to duties ranging from 7.5% to 25%. The exception being for certain medical-care products needed to address the COVID-19 pandemic, which remain valid through Sept. 30.

Accomodating Reality

In an April 21 letter headed by Sens. Rob Portman (R-OH) and Tom Carper (D-DE), the group says that while they support efforts to “challenge the inequities in our trade relationship with China,” they also acknowledge the “practical reality” that “some inputs for American manufacturers and small business remain unavailable outside of China.”

The senators, therefore, asked the USTR to renew expired and expiring Section 301 tariff exclusions to provide businesses with “certainty and predictability” and “time to plan and modify their supply chains.” This would give companies needed relief until such time as a full exclusion process can be reinstated, they said.

Looking Ahead

Over the longer term, the senators expressed hope that USTR Tai would “restart a process to permit companies to apply for exclusions.” This process should emphasize “transparency, speed, consistency, and fairness” and reflect “both the practical realities of global value chains and the broader aim of supply chain diversification,” according to the group.

The senators also offered support for “constructive ways to support domestic manufacturing, assertively challenge China’s unfair trade practices, and help companies diversify supply chains, which may include investing in other countries in the Asia-Pacific region, or re-locating production to the Western Hemisphere or United States.”