July 1, 2022

Volume XII, Number 182


July 01, 2022

Subscribe to Latest Legal News and Analysis

June 30, 2022

Subscribe to Latest Legal News and Analysis

June 29, 2022

Subscribe to Latest Legal News and Analysis

June 28, 2022

Subscribe to Latest Legal News and Analysis

The End of China Tariffs? USTR Four-Year Review on the Horizon

The US Trade Representative (USTR) has issued a Federal Register notice to initiate the first step of a statutory review process to determine whether China tariffs issued pursuant to Section 301 of the Trade Act of 1974 should be continued beyond the 4-year mark since their implementation. As outlined in this alert, this process includes different comment periods and phases for the USTR to review and decide whether the tariffs should be extended. We encourage importers and others affected by these tariffs to take advantage of this opportunity to provide their views to the USTR, including the economic impact of these tariffs on their US business operations.

The Federal Register notice can be found here.

Under Section 301, the president has the authority to impose tariffs on imports to counter trade practices that the US Trade Representative finds either to violate or conflict with a trade agreement or to burden or restrict US commerce unjustifiably. As detailed in our previous alerts, former-President Trump used this authority in 2018 and 2019 to impose Section 301 tariffs on imports from China based upon practices related to technology transfer, intellectual property, and innovation.

When President Biden assumed office and inherited these ongoing tariffs, there was hope that his administration, helmed by USTR Katherine Tai, would reduce or even eliminate the additional tariffs. To date, USTR Tai has maintained the status quo for tariffs on Chinese imports, reinstating only limited exclusions. Now that the first tranche of tariffs have been in effect for almost four years, however, statutory requirements mandate a more extensive review. 

Specifically, 19 USC § 2417, requires that the Section 301 tariffs terminate after a period of four years, unless a “representative of the domestic industry which benefits” from them submits a written request for their continuation. Within 60-days of the end of the 4-year period, the USTR must notify members of the domestic industry of the tariffs’ termination and, upon receiving a request for them to be continued, conduct a review to consider the effectiveness of the tariffs and their effects on the US economy, including consumers. The USTR must also consider whether other actions could be taken.

The USTR has taken the first step of this review process with the release of a notice announcing a two-phase comment period for interested parties to weigh in on whether the tariffs should be continued. The USTR’s review will span two comment periods: 

  • Phase 1: a 60 day period for those that have benefited from the tariffs to continue an action (i.e., maintain the additional tariffs in general or on specific 8-digit HTSUS codes);

  • Phase 2: after Phase 1, the USTR will announce “in one or more subsequent notices” another comment period for all interested parties to comment. 

The first comment period for List 1 will open on May 7, 2022, and end on July 5, 2022. The first comment period for List 2 will open from June 24, 2022, to August 22, 2022. The USTR appears to be considering List 3 as a modification to List 1 and List 4A as a modification to List 2, so it will consider comments on those lists “as applicable to both the July 6, 2018, action and August 23, 2018, action.” Additional detail on the information requested by the USTR through Phase 1 of the comment process will be forthcoming.

This process may result in significant changes to the Section 301 tariffs on a wide range of products from China. Importers and others affected by these tariffs are urged to consider filing written comments. ArentFox Schiff’s International Trade and Investment team is experienced both in counseling companies trading with China and in mitigating the effects of Section 301 tariffs.

© 2022 ArentFox Schiff LLPNational Law Review, Volume XII, Number 124

About this Author

David R. Hamill Partner ArentFox Schiff LLP

Dave's practice focuses on advising clients on international trade regulatory, including import and customs compliance, duty preference programs, in particular, the United States Mexico Canada Free Trade Agreement or USMCA. In addition, Dave provides legal and strategic advice regarding the implications of US economic sanctions and export controls.

Dave represents US and foreign companies, including manufacturers, importers, exporters, distributors, and trade associations on trade matters before the US Department of Treasury, US Customs and...

Leah Scarpelli Associate ArentFox Schiff LLP

Leah advises U.S. and foreign corporations, associations, and governments on a variety of international trade and customs matters, including trade remedies and import compliance.

Leah specializes in trade policy issues, such as the Section 232 tariffs on steel and aluminum, the Section 301 tariffs on imports from China and the EU, and the negotiation of trade agreements. She also counsels clients on global trade strategies and export compliance.

Leah works with clients in diverse sectors, including the automotive,...

Antonio J. Rivera Trade and Investment Attorney Arent Fox Schiff Washington DC

Antonio is an associate in the International Trade & Investment practice and Electric Mobility Group.

Antonio specializes in import compliance matters, including eligibility for free trade programs (e.g., USMCA), country of origin for marking and government procurement purposes, and other issues relating to classification, valuation, drawback, customs penalties, and special tariffs, such as Section 301. He works with clients ranging from small producers to large multinationals in various sectors, including the automotive, manufacturing,...

Robert E. Shervette IV Associate ArentFox Schiff LLP

Prior to joining ArentFox Schiff, Robert worked in the US Customs and Border Protection’s Office of Regulations and Rulings. There he worked on customs and trade compliance issues with a focus on intellectual property. He has also worked as an IP attorney at a boutique law firm. Prior to his work at CBP, Robert was a Law Clerk for the Honorable Dennis W. Dohnal at the US District Court for the Eastern District of Virginia in Richmond.

Robert also has experience in the area of information and systems engineering. He has worked as a systems...

David Llorente Director of Regulatory Audit ArentFox Schiff LLP
Director of Regulatory Audit

David has more than 18 years’ experience advising US and foreign companies on a variety of international trade law matters.

David advises clients on customs, export controls and economic sanctions, and trade remedy litigation. In particular, David’s work focuses on audits and internal investigations.

David passed the Customs Broker Exam in October 2015 asnd is slated to received his license.