President Biden has announced a series of increases on Section 301 tariffs focused on approximately $18 billion worth of imports from China in response to the country’s unfair trade practices. Following a statutorily mandated review of the Section 301 tariffs on imports from China, the U.S. Trade Representative (“USTR”) has recommended in its report to President Biden that products currently subject to section 301 tariffs on goods from China remain subject to the existing additional tariffs, while certain categories of products will see significant increases in the additional tariffs assessed.
Specifically, the Biden Administration has determined that Section 301 tariffs will increase on imports of the following products from China:
| Battery parts (non-lithium-ion batteries) | Increase rate to 25% in 2024 |
| Electric vehicles | Increase rate to 100% in 2024 |
| Facemasks | Increase rate to 25% in 2024 |
| Lithium-ion electrical vehicle batteries | Increase rate to 25% in 2024 |
| Lithium-ion non-electrical vehicle batteries | Increase rate to 25% in 2026 |
| Medical gloves | Increase rate to 25% in 2026 |
| Natural graphite | Increase rate to 25% in 2026 |
| Other critical minerals | Increase rate to 25% in 2024 |
| Permanent magnets | Increase rate to 25% in 2026 |
| Semiconductors | Increase rate to 50% in 2025 |
| Ship to shore cranes | Increase rate to 25% in 2024 |
| Solar cells (whether or not assembled into modules) | Increase rate to 50% in 2024 |
| Steel and aluminum products | Increase rate to 25% in 2024 |
| Syringes and needles | Increase rate to 50% in 2024 |
While the USTR did not recommend the wholesale elimination of Section 301 tariffs on any products that are currently subject to the action, it did recommend the establishment of a new, but very focused and limited, exclusion process. This exclusion process would specifically be limited to machinery, classified under certain specified tariff provisions in Chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (“HTSUS”), that is used in domestic manufacturing. A complete list of the tariff provisions proposed for the exclusion process can be found here.
The USTR also proposed 19 “temporary” exclusions for certain solar manufacturing equipment. These exclusions are limited to certain described articles that are classified within HTSUS tariff provisions 8486.10.0000, 8486.20.0000, and 8486.40.0030. The proposed temporary exclusions are intended to support investment in U.S. solar manufacturing operations. A complete list of the tariff provisions proposed for the temporary exclusions for solar equipment can be found here.
Although this announcement did not address the impending expiration of hundreds of tariff exclusions currently scheduled for May 31, the USTR is expected to issue a Federal Register notice next week outlining the procedures for interested persons to comment on the newly proposed tariff modifications and provide information concerning the exclusion process.
The USTR’s Report also recommends: (1) allocating additional funding to CBP for greater enforcement of Section 301 actions; (2) encouraging greater collaboration between industry and government to combat state-sponsored technology theft; and (3) continuing to assess how to best support supply chain diversification and resilience.
For a guided approach in making comments on the proposed changes or applying for the forthcoming exclusion process, please contact one of our trade professionals here.