A Section 301 petition seeking additional restrictions on trade with China over Beijing’s role in the production and export of illicit fentanyl to the U.S. was withdrawn earlier this month, prior to the deadline for the Office of the U.S. Trade Representative to decide whether or not to accept it.
However, press reports indicate that the petition is expected to be re-filed after the Trump administration takes office Jan. 20. If and when that happens, USTR will have 45 days to determine whether or not to open a Section 301 investigation. If it does, it could take up to a year for a determination to be made and any trade measures to be imposed.
According to a fact sheet, the original petition laid out “stark evidence” that the Chinese Communist Party “permits and actively encourages the production and export of illicit fentanyl,” including by (1) providing tax incentives and other financial support to Chinese companies that export fentanyl, (2) impeding U.S. efforts to investigate and prosecute fentanyl manufacturers and exporters, and (3) failing to prohibit Chinese entities, through adequate laws and enforcement actions, to halt the export of illicit fentanyl to the U.S.
The petition asserted that the economic impact of China’s actions on the U.S. has reached into the trillions of dollars and that the U.S. government “has a responsibility to do everything in its power” in response. Stating that “nothing short of significant countermeasures will incentivize the Chinese government to take meaningful action,” the petition listed a number of steps the U.S. could take, including tariffs and import bans amounting to $50 billion, the elimination of the de minimis exemption for all imports originating in China, expanded outbound investment restrictions, and a mandate for China to purchase U.S. agricultural goods and autos.
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