On Monday, October 4, U.S. Trade Representative Katherine Tai delivered a long anticipated speech framing the Biden Administration's trade policy toward China.
Among the announcements made were that (1) a Section 301 product exclusion process would be "restarted" with respect to the tariffs currently in effect, and (2) additional enforcement actions against China could be initiated, potentially to include another Section 301 investigation. Recall that the existing tariffs were imposed beginning in March 2018 under Section 301 of the Trade Act of 1974, pursuant to an investigation concerning "China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation."
On Tuesday, October 5, the USTR announced as a first step toward (1) that it would open a proceeding to consider whether to renew any Section 301 product exclusions that had previously been granted and that had previously been extended. The USTR granted about 2,200 product exclusions between 2019 and 2020, and 549 of those were subsequently extended. Those 549 exclusions are now up for renewal. Comments are being invited on whether this particular universe of previously granted exclusions should be reinstated. USTR will be looking for information on (1) whether the product remains available only from China, (2) changes in the product's global supply chain/relevant industry developments since September 2018, (3) efforts importers have taken since September 2018 to source the product from the U.S. or third countries, and (4) domestic capacity for producing the product. Any reinstated exclusions will be retroactive to October 12, 2021 and run for a time period yet to be determined.
It is possible that this exclusion renewal process is only a first step preceding a more extensive reopening of the product exclusion process, although no concrete indications of that have been made by the Administration. We will continue to make announcements as opportunities arise.
The Federal Register notice announcing the exclusion renewal process is available here. The USTR's official list of 549 previously extended exclusions is available here. We have also prepared a fully sortable Excel based version of USTR's list, available here. The comment period will be open between October 12, 2021 and December 1, 2021. We are available to assist with the preparation of comments either supporting or opposing renewal of exclusions on any of the listed products. Please let us know if you have any questions.
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