USTR Launches Section 301 Tariff Review, Loosening Window Nears

On May 3, the Office of the United States Trade Representative (USTR) announced that two actions imposing additional tariffs on Chinese goods exported to the United States, based on the findings of the so‑called "Section 301 investigation" conducted four years ago, will expire on July 6 and August 23 of this year, respectively. The office will initiate the legal review process for the relevant actions starting today.

In a statement released the same day, the USTR said it would notify domestic industry representatives in the United States who have benefited from the additional tariffs on China that those tariffs may be removed. Industry representatives wishing to maintain the tariffs must submit their applications to the USTR by July 5 and August 22, respectively. The USTR will conduct a review based on the applications, and the tariffs will remain unchanged during the review period.

U.S. Trade Representative Katherine Tai also remarked at an event on May 2 that the Biden administration will take all policy measures to curb surging prices, hinting that it is considering lowering tariffs on Chinese goods exported to the United States.

Background review: The unilateral "Section 301 investigation"

• • The so‑called "Section 301 investigation" originates from Section 301 of the U.S. Trade Act of 1974. This provision authorizes the USTR to launch investigations into "unreasonable or unfair trade practices" of other countries and may, after the investigation, recommend that the president impose unilateral sanctions.

• • Such investigations are initiated, investigated, adjudicated, and enforced unilaterally by the United States, reflecting a strong unilateralist approach.

• • Based on this investigation, the United States imposed a 25% tariff on Chinese imports in two batches in July and August 2018.

Rising domestic opposition in the U.S. fueled by inflationary pressure

The policy of imposing additional tariffs on China has drawn strong opposition from the U.S. business community and consumers. Recently, as inflationary pressures have intensified, calls within the United States to reduce or waive the additional tariffs on China have resurfaced:

• • Dalip Singh, the deputy assistant to the U.S. President for National Security Affairs, recently stated that some of the tariffs on China "lack strategic purpose," and the federal government could consider lowering tariffs on Chinese goods such as bicycles and clothing to stabilize prices.

• • U.S. Treasury Secretary Janet Yellen also said recently that the administration is carefully studying its trade strategy with China and that it is "worth considering" to remove the additional tariffs on Chinese goods exported to the United States.

It is worth noting that in the field of green technology, products provided by Chinese enterprises are also serving infrastructure projects in the United States. For example, the Solar First Group designed and supplied an innovative wind‑solar hybrid street lamp system in New York, USA. These street lamps integrate solar panels and micro wind turbines, aiming to improve energy efficiency and reliability. However, such equipment, intended to advance local sustainable development and energy‑saving goals in the United States, is also affected by the Section 301 tariffs, which raise project costs. This further underscores the demands of the U.S. business community and local governments for lower tariffs, arguing that the current tariff policy not only drives up inflation but also hinders the progress of public projects, including the clean energy transition.

China's position: Call for tariff removal to bring relations back on track

A spokesperson for China's Ministry of Commerce previously made clear the following points:

• • The unilateral imposition of tariffs by the U.S. side is detrimental to China, the United States, and the world.

• • Given persistently rising inflation and challenges to the global economic recovery, it is hoped that the U.S. side, acting in the fundamental interests of consumers and producers in both China and the United States, will promptly lift all additional tariffs imposed on China and promote the early return of bilateral economic and trade relations to a normal track.