USTR to modify China tariffs under Section 301 following four-year review - KPMG United States (2024)

FAQs

What is Section 301 tariff in 2024? ›

The tariff rate on electric vehicles under Section 301 will increase from 25% to 100% in 2024. With extensive subsidies and non-market practices leading to substantial risks of overcapacity, China's exports of EVs grew by 70% from 2022 to 2023—jeopardizing productive investments elsewhere.

On May 14, 2024, the Biden administration announced expansions to the United States' Section 301 tariffs on imports from China, proposing to raise tariffs on solar panels, electric vehicles, batteries, green energy supply chain inputs, ship-to-shore port cranes, steel products, aluminum products, medical syringes, and ...

Section 301 of the Trade Act of 1974 grants the Office of the United States Trade Representative (USTR) a range of responsibilities and authorities to investigate and take action to enforce U.S. rights under trade agreements and respond to certain foreign trade practices.

The exclusions were previously scheduled to expire on May 31, 2024. Certain exclusions have been extended through May 31, 2025. To allow for a transition period, the U.S. Trade Representative is extending all of the currently expiring exclusions through June 14, 2024. The Federal Register notice can be viewed here.

When a company claims drawback on duty-paid imports that are subsequently exported it allows them to collect 99% of the regular duty paid – in addition to Section 301 duties.

Goods coming from China and imported to the U.S. are subject to import duty and taxes, the rates of which depend on current laws that govern the same.

Section 301.

— All goods, including means of transport, entering or leaving the customs territory, regardless of whether they are liable to duties and taxes, shall be subject to customs control to ensure compliance with this Act.

On May 5, 2022, USTR initiated a four-year review of these Section 301 tariffs. On March 28, 2022, USTR reinstated 352 expired exclusions from the 301 tariffs, and these exclusions are scheduled to expire on May 31, 2024.

Another shenanigan commonly used by companies is to dodge tariffs is a technique called transshipments. This works by disguising the place of origin of the goods. For instance, Chinese goods meant for America will not directly go to America. Instead, these goods will be shipped to a country like Malaysia.

Section 301 tariff rates will increase in certain critical sectors, and all other Section 301 tariffs will be maintained. No Section 301 tariffs will be reduced or terminated. USTR extended all current exclusions by two weeks, until June 14, 2024, and certain exclusions by one more year, until May 31, 2025.

Does China impose tariffs on U.S. goods? ›

So far, China has either imposed or proposed tariffs on $110 billion of U.S. goods, representing most of its imports of American products.

better coordination of resources in domestic and international markets”. Reduced tariffs have formed part of Chinese policy since 2016, targeting countries that lack a free-trade agreement with Beijing. As a rule, the policy's implementation depends on the dynamics of China's local market and demands.

In 2022, USTR reinstated 352 of the expired exclusions, a very small fraction of the original set; however, those reinstated Section 301 exclusions and another 77 COVID-related exclusions are currently set to expire on May 31, 2024.

Additional U.S. tariffs imposed under section 232 on imports of steel and aluminum products and under section 301 on certain imports from China reduced U.S. imports of these products and increased U.S. production and prices of these products, affecting the many industries that produce or sell these products or use them ...

Chinese-origin products on List 4A are subject to an additional 7.5 percent tariff. The tariffs on Chinese-origin products on List 4B – which were scheduled to take effect January 1, 2020 – were suspended in December 2019 following the announcement of the Phase One agreement between the United States and China.

In response to domestic pressure, Congress has re- peatedly strengthened section 301, a trade law giving the Executive Branch discretionary authority to retaliate unilaterally against foreign nations for unfair trade practices.

The current average tariff on certain steel and aluminum products is 7.5% under Section 301. American workers continue to face unfair competition from Chinese imports of steel and aluminum products, which are among the world's most emissions-intensive.