U.S. Trade Representative Katherine Tai defended the Biden administration’s China trade policy in two congressional hearings last week amid criticism from both sides of the aisle. Tai also offered no further insights on when a USTR review of the Section 301 tariffs on hundreds of billions of dollars’ worth of imports from China might be concluded.
In 2022 USTR announced that it would continue the Section 301 tariffs while conducting an investigation of whether they have been effective in remedying problematic Chinese policies and practices, whether there are measures other than tariffs that might be more effective, and how the tariffs have impacted U.S. consumers, manufacturers, workers, technology, and supply chain resilience. Tai initially said she expected this review to be completed by fall 2023, then by the end of that year, and under questioning by lawmakers last week she opined that “we are very close to the conclusion of this review.”
This oft-delayed investigation is one example of what several lawmakers argued last week during annual hearings on U.S. trade policy by the Senate Finance and House Ways and Means committees has been an inadequate China trade policy by the Biden administration.
Republican Jason Smith, who chairs the Ways and Means Committee, said the White House “has sat idly by while China continues to spread its malign influence,” noting in particular that it has “failed to enforce the Phase One agreement despite knowing that China is violating its end of the deal.” Smith also chastised Tai for asking for “new tools” against China when USTR hasn’t “even used the tools that you already have,” a comment echoed by Democrat Ron Wyden, who chairs the Senate Finance Committee and asserted that “there’s a lot more USTR can be doing with the tools it has.”
For example, both leaders said, the Biden administration has declined to file any new dispute settlement cases at the World Trade Organization or institute any new Section 301 investigations against China. USTR did recently launch a Section 301 probe of China’s shipbuilding, maritime, and logistics sectors, but Mike Crapo, the senior Republican on the Senate Finance Committee, said this “does not make up for over three years of inaction on China.” Instead, Smith said, Congress is taking measures of its own, such as recently advancing a half-dozen bills targeted at China.
Tai pushed back on some of the lawmakers’ accusations. She argued that “asking old tools to solve new challenges … is destined to fail” in explaining why USTR has not brought new WTO or Section 301 cases, noting that previous such actions have not yielded any “structural change” in China. (It could be argued that the Section 301 tariffs have been similarly ineffective, but Tai apparently did not address that point, ostensibly because it is the focus of USTR’s review.)
Instead, Tai said, the Biden administration has sought to tackle China trade issues as part of a broader reframing of U.S. trade policy that has included efforts like investing in domestic production, improving supply chain resilience by increasing sourcing from and access to other markets, expanding international cooperation against China’s economic coercion and non-market policies, and reforming the WTO. Indeed, Tai’s opening remarks to both committees mentioned these and other initiatives before addressing specific China enforcement efforts.
Even so, an Inside US Trade article reports, Tai acknowledged that “probably the most important aspect of China enforcement … comes to the review of the existing tariffs and how we can make them more effective and strategic.”
While importers continue to wait for the results of that review, efforts to ameliorate the impact of the tariffs are continuing.
- ST&R is advocating for the renewal of all previously approved exclusions and the creation of a process allowing for new exclusion requests (for more information, please contact strdc@strtrade.com).
- There are a number of proven and legitimate ways to effectively avoid the tariffs or limit their impact (click here for more information).
- Importers of List 3 and 4A goods from China can still preserve their rights to possible refunds of tariffs paid on such goods by joining an ongoing court case (for more information, or assistance filing a claim, please contact us at 301Litigation@strtrade.com).
Copyright © 2024 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.