US Takes First Step Towards Four-Year China Tariffs Review

The USTR announced on May 3 that the two actions to impose tariffs on Chinese goods exported to the United States based on the results of the so-called "301 investigation" four years ago will end on July 6 and August 23 this year, respectively. With immediate effect, the office will initiate a statutory review process for the relevant actions.

The U.S. Trade Representative's office, USTR, said in a statement on the same day that it will inform representatives of U.S. domestic industries that benefit from the tariffs on China that the tariffs may be lifted. Industry representatives have until July 5 and August 22 to apply to the office to maintain the tariffs. The office will review the relevant tariffs on the basis of the application, and these tariffs will be maintained during the review period.

The investigation is divided into two phases, the first of which is submitted by industry representatives of U.S. stakeholders and opened for hearing to request the continuation of the revised corresponding trade action. The second phase of the review will be announced in one or more follow-up notices and will provide an opportunity for public comments from all interested parties (all businesses and individuals).

USTR must receive a request for review from industry representatives within a 60-day window four years before the two additional tariff actions:

1. The $34 billion "List 1" list:

The US$34 billion "List 1" list of tariffs on Chinese products (since July 6, 2018, with a tax rate of 25%) has been excluded for 8 rounds. Request a review between May 7, 2022 and July 5, 2022.

2. The $16 billion "List 2" list:

The US$16 billion "List 2" list of tariffs on Chinese products (levied since August 23, 2018, with a tax rate of 25%) has been excluded for 3 rounds. Request a review between June 24, 2022 and August 22, 2022.

U.S. Trade Representative Katherine said at the event on May 2 that the U.S. government will take all policy measures to curb price spikes, suggesting that cutting tariffs on Chinese imports to the U.S. will be considered.

The so-called "301 investigation" originates from Section 301 of the US Trade Act of 1974. The clause authorizes the US Trade Representative to launch an investigation into other countries' "unreasonable or unjust trade practices" and, after the investigation, recommends that the US president impose unilateral sanctions.

This investigation was initiated, investigated, adjudicated and implemented by the United States itself, and it has a strong unilateralism. According to the so-called "301 investigation", the United States has imposed 25% tariffs on goods imported from China in two batches since July and August 2018.

The U.S. imposition of tariffs on China has been strongly opposed by the U.S. business community and consumers. Due to the sharp increase in inflationary pressures, there has been a resurgence of calls in the United States to reduce or exempt additional tariffs on China recently.

Dalip Singh, deputy assistant to the US president for national security affairs, said recently that some of the tariffs imposed by the US on China "lack a strategic purpose." The federal government could lower tariffs on Chinese goods such as bicycles and clothing to help curb price increases.

U.S. Treasury Secretary Janet Yellen also said recently that the U.S. government is carefully studying its trade strategy with China, and that it is “worth considering” to cancel the additional tariffs on Chinese goods exported to the U.S.

The spokesperson of China's Ministry of Commerce previously stated that the unilateral tariff increase by the United States is not conducive to China, the United States, and the world.

In the current situation where inflation continues to rise and the global economic recovery faces challenges, it is hoped that the U.S. side will proceed from the fundamental interests of consumers and producers in China and the U.S., cancel all additional tariffs on China as soon as possible, and push bilateral economic and trade relations back to the normal track as soon as possible.