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The End of Trump-Era China Tariffs Could Be Coming Soon

President Biden has intimated that he is mulling a removal of Trump-era Section 301 tariffs amid rising inflationary pressure that is driving up prices—and consumer anxiety. American Apparel and Footwear Association (AAFA) president and CEO Steve Lamar told Sourcing Journal that movement on the issue could be announced as early as this week, based on the trade group’s conversations with members of the administration and Congress.

A Wednesday report from Politico citing former federal officials and others with knowledge of the situation suggested that new actions could include a rollback of duties on a small list of goods, the implementation of a new exclusion process, and a new Section 301 investigation into China’s trade actions, conducted by the United States Trade Representative (USTR). “This is something that Ambassador Tai has been talking about, to kind of refresh the underlying investigation” that was conducted in 2017 by the Trump administration, Lamar explained.

Telling reporters at a briefing Wednesday that she could not yet share information on the fate of the Section 301 tariffs, White House Press Secretary Karine Jean-Pierre said, “There are a lot of different elements to this, especially since the previous administration imposed these tariffs in such a haphazard…non-strategic way.”

Indicating that President Biden and his advisors are currently “talking through” the issue, Jean-Pierre said, “Once we figure out the right approach—this is about what is right for the American public, for the American people—we will have an announcement and we will let you all know.”

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The heightened discussion surrounding the Section 301 tariffs has reached a fever pitch in recent weeks, as legislators on both sides of the aisle question their effectiveness in tamping down China’s anti-competitive trade practices. The USTR has seen its share of pressure, as it recently missed multiple deadlines set by Congress and a U.S. Court of International Trade (CIT). The agency was tasked with establishing a new, user-friendly tariff exclusion process by early June, and failed to deliver, much to the chagrin of lawmakers. And following an April ruling on a case brought by four American business enterprises, USTR was also ordered to reexamine and explain its rationale for implementing the List 3 and List 4A duties which took effect in 2019. Though the CIT initially ordered the agency to present its findings by June 30, USTR was granted a month-long extension. The two tranches cover $300 billion in Chinese imports to the U.S.

Plaintiffs including HMTX Industries LLC, Halstead New England Corporation, Metroflor Corporation, and Jasco Products Company LLC argued this spring that USTR implemented the tariffs illegally. While the court did not find the agency guilty of illegal action, it resolved that the USTR did not adequately respond to public concerns before the List 3 and List 4A tariffs took effect, or elucidate its reasoning for levying additional duties against Chinese imports. The CIT subsequently ordered USTR to shed light on its decision-making process within 90 days.

The trade agency filed a motion on June 17 asking for 60 additional days to deliver its findings, citing the need to sift through more than 9,000 public comments from the period in September 2018 and August 2019, as well as transcripts from hearings that took place at the time. “Additional time is needed to complete this work given the volume of information under review, the limited resources available within USTR to conduct this review, and the numerous competing deadlines with which the agency has been tasked with during the remand period,” it wrote.

The plaintiffs swiftly opposed USTR’s motion for an extension, arguing that granting one “would leave uncured its established legal violation for another two months to the continuing detriment of American businesses and consumers.” The agency is permitted only to elaborate on “preexisting rationales memorialized in the rulemaking record,” they wrote, adding that the remand is “not an opportunity to concoct new rationales or develop new explanations” for its actions. These groups said their businesses were directly impacted by the List 3 and List 4A tariffs, and requested that USTR be compelled to deliver its explanation by the original deadline. The CIT opted to grant an extension of 30 days, ordering the agency to do so before Aug. 2.