China Tariffs Continue with New Exclusion Process

After an 8 month review of U.S.-China Trade policy, U.S. Trade Representative (USTR) Katherine Tai announced the tariffs on Chinese-made products will continue as the Biden Administration negotiates compliance with the Phase One deal, and looks to address additional concerns. In an October 4 speech to the Center for Strategic and International Studies, Tai also included some good news – the USTR will re-open a more transparent process for seeking exclusions from the Section 301 tariffs.

The U.S. Trade Representative noted China has failed to meet its obligations under the Phase One deal, and must comply before the tariffs can be removed. Tai made it clear that the goal is to “defend the interests of America’s workers, businesses, farmers and producers, and strengthen our middle class”. The USTR added that the U.S. continues “to have serious concerns with China’s state-centered and non-market trade practices that were not addressed in the Phase One deal” and the administration will raise these concerns with China.

On the Exclusion process, USTR Tai stated her office would launch a “targeted tariff exclusion process,” though she did not provide further details on the start date or eligible products. Notably, USTR Tai raised the possibility of future product exclusions as well, confirming that the administration will “keep open the potential for additional exclusion processes, as warranted.”  She added that the USTR will seek to “ensure current Section 301 tariffs align appropriately with our economic priorities, such as boosting American workers’ wages and job opportunities, securing the resilience of critical supply chains, sustaining our technological edge, and protecting our national security interests” in evaluating exclusion requests. USTR will put a lot of weight on what U.S. businesses say about their ability to source goods from countries other than China.

SFIA will continue to monitor USTR on the new Exclusion process and assist companies interested in pursuing exclusions from the Section 301 tariffs and petition the government for relief as more information becomes available.

Please contact Bill Sells, SFIA SVP for Government and Public Affairs at [email protected] for additional information.

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