USTR Unveils China Strategy: Tariffs Will Remain, but Exclusion Process Is Forthcoming

2 min

On October 4, 2021, United States Trade Representative (USTR) Katherine Tai delivered remarks outlining the Biden-Harris administration's approach to the U.S.-China bilateral trade relationship. The remarks and Q & A session clarified the strategy and goals of this administration and upcoming developments that importers and other interested parties can expect regarding Section 301 tariffs.

Policy Goals and Strategy. As expected, it does not appear the Biden administration will roll back Section 301 tariffs in the near future. Rather, Ambassador Tai revealed the administration intends to pursue a U.S. worker-centered trade policy with regard to China. For the time being, tariffs will continue as one of the tools used to stimulate the American economy, create more American jobs, and protect U.S. industries from unfair trade practices perpetuated by China.

The four overarching policy steps supporting the administration's trade agenda, while also addressing the concerns of U.S. importers and other stakeholders, are as follows:

  • Discuss with China its performance under the Phase One Agreement made in January 2020 and enforcement of the same
  • Begin a targeted Section 301 tariff exclusion process
  • Raise concerns regarding China's state-centered and non-market trade practices
  • Coordinate with allies "to shape the rules for fair trade in the 21st century, and facilitate a race to the top for market economies and democracies"

Section 301 Exclusions. The details provided on the Section 301 Exclusion process were limited but included a commitment that an exclusion request process is forthcoming. Ambassador Tai also noted that the initial exclusions would be limited to targeted, specific product types and industries, and that there may be opportunities for broader exclusions after the initial round.

We expect USTR to issue additional details before the end of October and are following updates closely. If you have any questions regarding how these recent developments may affect your business, please reach out to Venable's International Trade Group for guidance.