The four-year expiration date on a portion of Washington’s punitive tariffs on imports from China came and went on August 23, leaving in place a 25% levy on goods worth about USD16 billion, despite ambivalence from U.S. President Joe Biden’s administration. The additional duties on Chinese imports, initiated by former U.S. President Donald Trump, come under four lists. List 1 took effect on July 6, 2018, and applies to machinery and manufacturing parts such as for aircraft, covering USD34 billion worth of Chinese goods. List 2 covers products ranging from construction to cars, and encompasses USD16 billion worth of goods, effective for another four years from August 23.
In total, the U.S. sanctioned Chinese imports worth USD300 billion as of 2019 under all four lists, citing a “massive” trade deficit and “unfair” trade practices. The Office of the U.S. Trade Representative on May 5 initiated a review of the two batches of tariffs, seeking feedback from representatives of domestic industries that benefited from them. As of the August 23 deadline for List 2, 152 submissions were received in favor of extending those tariffs, while over 300 requests were accepted to keep List 1 tariffs in place as well. A notice from the USTR Federal Register said it would automatically renew the tariffs if it received even a single request to continue them. Current rules under section 301 of the 1974 Trade Act require the government to assess after four years if the imposed tariffs had benefited Americans, according to Nicole Bivens Collinson, who leads the international trade and government relations practice at Sandler, Travis and Rosenberg, a Washington-based law firm.
“We expect the tariffs will remain in place, and the USTR will issue another Federal Register notice, this time asking for comments from the entities that were harmed by the implementation or the continuation of the tariffs,” said Bivens Collinson. He expressed hope that any future tariff relief would depend on economic factors rather than the USTR’s review. “The Biden administration might decide that, in order to complement the effects that they are expecting from the Inflation Reduction Bill 2022, that they take additional action on specific, maybe consumer products,” Bivens Collinson said.
Rising prices are exacting a heavy toll on U.S. consumers. The Peterson Institute for International Economics calculated earlier this year that American households would save an average of USD797 annually if the tariffs now in place were reduced. But following U.S. House Speaker Nancy Pelosi’s trip to Taiwan, U.S. Commerce Secretary Gina Raimondo acknowledged that the visit had “particularly complicated” existing tensions with China. “Certainly, it has made it a little more challenging,” Raimondo said. Recently the Biden administration has indicated it is of two minds as to whether to back lifting the tariffs. In July, Treasury Secretary Janet Yellen testified in Congress that some of the tariffs were being “paid by Americans, not by Chinese”, yet U.S. Trade Representative Katherine Tai contended that “China tariffs” were a “significant piece of leverage, and a trade negotiator never walks away from leverage”, the South China Morning Post reports.
The U.S. has added seven Chinese institutes and companies to its Entities List, accusing them of “acquiring and attempting to acquire U.S.-origin items in support of China’s military modernization efforts”. There are now around 600 Chinese entities on the list, with 110 having been added during the Biden administration. U.S. companies wanting to sell equipment to those entities need to obtain a special export license.
