On October 12, 2022, the Office of the U.S. Trade Representative announced it would be seeking public comments regarding the effectiveness of the actions related to the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The two specific actions under review are the imposition of additional tariffs under Section 301 on products on List 1 and List 2 (covering $34 billion and $16 million in imports as of 2018, respectively), which were subsequently modified by the imposition of List 3 and List 4A (totaling $325 billion in imports as of 2018). This notice marks the next step in the USTR’s “review of necessity,” a statutory-mandated four-year review process. A portal for submitting these comments will open on November 15, 2022, with a deadline of January 17, 2023.
The USTR initiated this statutory review process in May 2022 by first providing representatives of domestic industries that benefitted from this trade action an opportunity to request continuation of the Section 301 duties. In early September 2022, USTR announced that it had received responses from 358 companies and 76 trade associations in support of the continuation of the Section 301 tariffs. As a result, USTR announced that these tariffs would not be revoked.
Having established sufficient interest in the continuation of the actions, the USTR is now moving to the next phase of the review, which involves a broader evaluation of the effectiveness of these tariffs and their impact on the U.S. economy.
To aid in this exercise, USTR is opening a docket on November 15, 2022, for interested persons to submit comments with respect to any aspect of the Section 301 duties, including comments on:
- The effectiveness of the actions in obtaining the elimination of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
- The effectiveness of the actions in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
- Other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
- The effects of the actions on the U.S. economy, including U.S. consumers.
- The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits.
- The effects of the actions on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development.
- The effects of the actions on U.S. workers, including with respect to employment and wages.
- The effects of the actions on U.S. small businesses.
- The effects of the actions on U.S. supply chain resilience.
- The effects of the actions on the goals of U.S. critical supply chains outlined in Executive Order 14017 and in subsequent reports and findings.
- Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the United States than the additional duties on particular downstream product(s) or finished good(s) incorporating those inputs.
Interested parties will have until January 17, 2023, to submit written comments on the public docket. In the course of the review, USTR will evaluate whether to provide additional opportunities for public comment through additional written comments or through public hearings. Any further opportunities for public comment will be addressed in subsequent notices.
It is not clear how and if the USTR would modify the tariffs based on the comments received, as this statutory review has never been involved. Nevertheless, businesses that have been negatively impacted by these tariffs should consider submitting comments for the USTR’s consideration, particularly if it has been negatively impacted by Section 301 tariffs across any of the criteria listed by the USTR.