The Office of the U.S. Trade Representative (“USTR”) announced a review process that is likely to extend China Section 301 tariffs (Lists 1, 2, 3, and 4A) beyond their 4-year statutory expiration dates. This announcement does not make any immediate changes to the existing “China tariffs,” but interested parties should watch this space closely.
USTR imposed tariffs on certain Chinese imports pursuant to its authority under Section 301 of the Trade Act of 1974, effective July 6, 2018 (List 1) and August 23, 2018 (List 2). Pursuant to Section 307(c)(1) of that Act (19 U.S.C. 2417(c)(1)), such tariffs will automatically expire after four years (i.e., in July and August of this year), unless a domestic industry beneficiary timely requests that they be continued. As part of this process, USTR must first notify benefitting companies of the impending expiration. USTR has therefore announced that it will soon begin accepting continuation requests from domestic industry beneficiaries via USTR’s web portal. Continuation requests are due by July 5, 2022 (List 1, as modified) and August 22, 2022 (List 2, as modified).
Notably, insofar as List 3 and 4A tariffs were enacted as “modifications” of Lists 1 and 2, USTR’s notice indicates that there will not be a separate process specifically concerning extension or review of the List 3 or 4A tariffs. Rather, USTR states, “{t}o ensure comprehensive coverage of the review, USTR will consider the List 3 and List 4A modifications as applicable to both the July 6, 2018 {List 1}, action and August 23, 2018 {List 2}, action.” Put differently, this extension and review process concerns not only the List 1 and 2 tariffs themselves, but also the much larger List 3 and List 4A tariffs and related exclusions. This appears to mark USTR’s first time addressing whether a “modification” expires four years after its own effective date, or four years after the effective date of the underlying “action” that was modified — having opted for the latter.
If a request for continuation is received, USTR’s notice indicates that continuation of the tariffs will be automatic. In that event, USTR will subsequently provide other interested parties — for example, importers, foreign producers, consumers, etc. — an opportunity “to submit comments on, among other matters, the effectiveness of the action in achieving the objectives of Section 301, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.” USTR will supply further details concerning this secondary comment period in a future notice.
CLK continues to monitor these developments, and is prepared to advise parties on this process as appropriate.