The Office of the United States Trade Representative (USTR) announced final modifications concerning the statutory review of the tariff actions in the Section 301 investigation China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.
The tariff increases announced in May 2024 were largely adopted, with several updates to strengthen the actions to protect American businesses and workers from China’s unfair trade practices following the review of more than 1,100 comments from the public.
Hikes nclude a 100% tariff on electric vehicles, a 25% tariff on lithium-ion EV batteries and a 50% tariff on photovoltaic solar cells. A 50% tariff on semiconductors made in China will go into effect in 2025.
The findings of the four-year review can be found on USTR’s
website.
Friday's announcement include
- new timing and rates for tariffs on face masks, medical gloves, needles, and syringes;
- an exclusion for enteral syringes;
- a proposal to increase additional tungsten, wafers, and polysilicon tariff lines;
- an exclusion for ship-to-shore cranes ordered prior to May 14, 2024; Later purchases will face a 25% tariff.
- an expansion of the scope of the machinery exclusions process to include five additional tariff lines; and
- modification of the coverage of proposed exclusions for solar manufacturing equipment, eliminating five exclusions.
Information on the revisions to modifications are detailed in USTR’s Federal Register Notice, which is available here.
USTR expects to launch the machinery exclusions process soon, as well as the comment period for proposed modifications of tariff rates on certain tungsten, wafers, and polysilicon tariff lines.
Background
In May 2022, USTR commenced the statutory four-year review process by notifying representatives of domestic industries that benefit from the tariff actions of the possible termination of those actions and of the opportunity for the representatives to request continuation. In September 2022, USTR announced that because requests for continuation were received, the tariff actions had not terminated and USTR would conduct a review of the tariff actions. USTR opened a docket on November 15, 2022, for interested persons to submit comments with respect to a number of considerations concerning the review. USTR received nearly 1,500 comments.
Specifically, the Report concludes
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- The Section 301 actions have reduced some of the exposure of U.S. persons and businesses to these technology transfer-related acts, policies, and practices.
- The PRC has not eliminated many of its technology transfer-related acts, policies, and practices, which continue to impose a burden or restriction on U.S. commerce. Instead of pursuing fundamental reform, the PRC has persisted, and in some cases become more aggressive, including through cyber intrusions and cybertheft, in its attempts to acquire and absorb foreign technology, which further burden or restrict U.S. commerce.
- Economic analyses generally find that tariffs (primarily PRC retaliation) have had small negative effects on U.S. aggregate economic welfare, positive impacts on U.S. production in the 10 sectors most directly affected by the tariffs, and minimal impacts on economy-wide prices and employment.
- Negative effects on the United States are particularly associated with retaliatory tariffs that the PRC has applied to U.S. exports.
- Critically, these analyses examine the tariff actions as isolated policy measures without reference to the policy landscape that may be reinforcing or undermining the effects of the tariffs.
- Economic analyses, including the principal U.S. Government analysis published by the U.S. International Trade Commission, generally find that the Section 301 tariffs have contributed to reducing U.S. imports of goods from the PRC and increasing imports from alternate sources, including U.S. allies and partners, thereby potentially supporting U.S. supply chain diversification and resilience.
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