Experts invited by Georgetown Law's Center on Inclusive Trade and Development to talk about U.S.-China relations said a truce in the Trump trade war that has continued under President Joe Biden is unlikely, and that the trade war may intensify, no matter who the next president is.
Section 301 Tariffs
Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.
The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump Administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump Administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions—particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.
The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Almost three quarters of U.S. imports from China were subject to Section 301 tariffs, which ranged from 15% to 25%. The U.S. and China engaged in negotiations resulting in the “U.S.-China Phase One Trade Agreement”, signed in January 2020.
The Biden Administration took steps in 2021 to eliminate foreign policies subject to Section 301 investigations. The administration has extended and reinstated many of the tariffs enacted during the Trump administration but is conducting a review of all Section 301 actions against China.
The following lawsuits were filed at the Court of International Trade during the week of March 18-24:
PHILADELPHIA -- Bill Reinsch, a senior scholar at the Center for Strategic and International Studies, told CBP Executive Assistant Commissioner AnnMarie Highsmith that he is pessimistic Congress will vote on any trade bill, whether liberalizing trade, as in the Generalized System of Preferences benefits program or the Miscellaneous Tariff Bill, or restricting it, as in changes to de minimis eligibility or changes to trade remedy laws.
The following lawsuits were filed at the Court of International Trade during the week of March 11-17:
House Select Committee on China Chairman Mike Gallagher, R-Wis., and ranking member Raja Krishnamoorthi, D-Ill., asked Homeland Security Investigations to look into whether a surge in drone imports from Malaysia is due to transshipment from China, and asked the administration to hike tariffs on Chinese unmanned aerial vehicles, either by increasing Section 301 tariffs on the product, by initiating an antidumping/countervailing duty investigation, and/or opening a Section 232 investigation.
The following lawsuits were filed at the Court of International Trade during the week of March 4-10:
Democrats that represent Michigan and Ohio, where Big 3 automakers' plants are concentrated, are asking that the Section 301 review hike tariffs on Chinese automakers. Section 301 tariffs already apply a 25% tariff, making the total duty for a Chinese auto 27.5%.
The following lawsuits were filed at the Court of International Trade during the week of Feb. 26 - March 3:
Sen. Josh Hawley, R-Mo., recently introduced a bill that would require the president to hike tariffs on Chinese battery components, solar energy components and wind energy components by 25%. Those goods are currently subject to 25% Section 301 tariffs. The bill also would require that tariff rate to rise by 5 percentage points each year, for five years, until it reaches 50%.
U.S.-China Economic and Security Review Commissioner Kimberly Glas, calling e-commerce "a superhighway of the Wild West," asked witnesses at a hearing on Chinese exports and product safety if de minimis is a major contributor to unsafe products.