As required by the Trade Act of 1974, the U.S. Trade Representative (USTR) must conduct a “necessity review” of the Section 301 tariffs on some $350 billion of products from China (Lists 1, 2, 3 and 4a) or the tariffs automatically sunset after four years. However, the Trade Act is somewhat vague on how a review should be done, giving USTR a fair amount of latitude in carrying out the process.
Thus, USTR began its review in July 2022 of the tariffs imposed in 2018 by seeking comments from those stakeholders in favor of the tariffs and supporting extensions. This generated a sufficient number of comments backing the tariffs for USTR to keep them in place during the entire review and perhaps beyond.
In October 2022, USTR announced the next step in its review would allow those opposed to the tariffs to submit comments through a special USTR portal. This second comment period was open from Nov. 15, 2022, through Jan. 17, 2023, featuring a questionnaire requesting information related to the economy-wide impact of the 301 tariffs and their effectiveness “counteracting” China’s discriminatory practices, industry/sector impacts per North American Industry Classification System (NAICS) codes and impacts on specific Harmonized Tariff Schedule of the United States (HTSUS) subheadings.
On Jan. 17, IHA President Derek Miller submitted comments on behalf of IHA to USTR’s Four-Year Review of the 301 tariffs. The comments can be viewed here and include a sampling of NAICS codes and HTS subheadings that IHA member companies can fall under to address USTR’s request for this information. But regardless of the variety of NAICS codes and HTS subheadings, IHA’s comments make clear that nearly all its small business members are being hurt by the tariffs and their opposition has been consistent since 2018.
IHA also explains its participation in the Americans for Free Trade (AFT) coalition and that it is listed on AFT’s “anchor comments” to USTR. AFT’s well-crafted comments can be viewed here, and IHA was one of 176 associations to be listed on them.
IHA’s comments also supplement AFT’s by pointing out the 301 tariffs compounded America’s economic dislocation from the COVID-19 pandemic and this was exacerbated by the supply chain crisis, inflation and worker shortage. With the Federal Reserve raising interest rates and a possible recession looming, IHA concludes that USTR’s review should end the Sec. 301 China tariffs.