Section 301 of the Trade Act authorises the president to take retaliatory action if it is determined that a trade act, policy or practice of a foreign government is unreasonable or discriminatory and burdens or restricts US commerce. December 2019 saw significant end-of-year developments on the Section 301 tariff front. US importers should take stock of these as they plan for 2020.
The US Trade Representative recently published a Federal Register notice requesting comments on the proposed exclusion process for List 3 of the Section 301 tariffs on Chinese imports. As part of various changes to the exclusion process, the proposal does not appear to include a mechanism for applicants to designate specific information requested as being business confidential on the current form.
Earlier in May 2019, President Donald Trump announced that the Section 301 tariffs on List 3 products would be increased from 10% to 25%, effective from 10 May 2019. He also stated that a fourth list of $325 billion in Chinese imports would be taxed at 25%. Meanwhile, US Trade Representative Robert Lighthizer has stated that his office has "begun preparations to launch a process" for interested parties to seek an exclusion from the List 3 tariffs.
The Office of the United States Trade Representative recently announced that it is initiating an investigation under Section 301 of the Trade Act 1974 to enforce the United States' rights in the World Trade Organisation dispute involving subsidies provided to the large civil aircraft industry by the European Union. The investigation may result in tariffs of up to 100% on certain imports from the 28 EU member states as soon as 1 June 2019.
Following a meeting with Chinese Vice Premier Liu He, President Trump announced plans for an "epic" trade deal with China. However, to date, Trump has declined to set a date for a signing summit with President Xi Jinping to hammer out a final trade agreement, for which the Section 301 tariffs have emerged as a sticking point. China has demanded that the tariffs be removed as part of any final deal, while the White House hopes to use the tariffs as leverage to ensure compliance.
US Trade Representative Robert Lighthizer recently announced the Trump administration's intention to leave companies subject to the 10% tariff rate under Section 301 List 3 of the Trade Act 1974 without an exclusion process. In addition, due to the ongoing federal government shutdown, further delays are anticipated with the review of exclusion requests relating to Section 301 List 1 and Section 301 List 2.
Following President Trump's recent memorandum, the Office of the United States Trade Representative has published a proposed list of Chinese products that could be subject to 25% ad valorem tariff pursuant to Section 301 of the Trade Act 1974. As expected, the list of affected tariff numbers is heavily geared towards the technology sector, including the aerospace, information and communication technology, robotics and machinery industries.