On Wednesday, November 23, the Office of the U.S. Trade Representative (USTR) extended exclusions from Section 301 tariffs for 81 medical care products from China for a sixth time. The tariff exclusions for these products were initially granted in December 2020 and had been extended multiple times throughout the COVID-19 pandemic. The tariff exclusions for these specific products are now set to expire at the end of February 2023.
Section 301 (Title III of the Trade Act of 1974, 19 U.S.C. §§2411-2420) authorizes USTR to take action to encourage foreign countries to abandon or mitigate unfair trade practices that affect U.S. commerce. In 2018, USTR determined that China’s acts, policies, and practices related to technology transfer, intellectual property (IP), and innovation were “unreasonable or discriminatory and burdened or restricted U.S. commerce”. In order to counter them and obtain their elimination, the Trump Administration used Section 301 authorities to impose four rounds of increased tariffs on approximately two-thirds of all U.S. imports from China, sparking a heavily publicized and controversial trade war with Beijing.
In a draft Federal Register notice, USTR stated that “in light of the continuing efforts to combat COVID, the U.S. Trade Representative has determined that a 3-month extension of the 81 COVID related product exclusions is warranted”. Earlier this month, USTR opened a comment period on Section 301 tariffs imposed on China by the Trump Administration, which covered approximately $370 billion worth of Chinese goods at the peak of the US-China trade war. USTR’s comment period will be open until January 17, 2023 – interested parties can submit their comments via USTR’s web portal at https://comments.USTR.gov.
Crowell & Moring, LLP continue to monitor this development and the potential impact to businesses and consumers moving forward.