Biden Administration Will Keep Tariffs on Chinese Imports, At Least For Now

The U.S. Trade Representative will continue to review the tariffs, but they’ll stay on the books during the investigation.

We’re back to work after Labor Day weekend! Did you have a nice holiday? Our team barbecued with family and friends, enjoyed the final days of pool season, and took time to dissect all of the Don’t Worry Darling drama that happened at the Venice Film Festival.

But given the excitement of the three-day weekend, you may have missed some pretty big news announced by the Office of the U.S. Trade Representative (USTR) on Friday afternoon: Tariffs on Chinese imports are staying in place.

USTR is required by statute to review the Section 301 tariffs four years after they were first imposed, a process that began in May 2022. There have been rumors for months that President Biden was considering lifting at least some of the tariffs in a [misguided] attempt to address inflation, and Commerce Secretary Gina Raimondo said just a week ago that the president remained undecided.

But late Friday afternoon, a notice was posted to the USTR website announcing that because “requests for continuation were received, the tariff actions have not terminated and USTR will conduct a review of the tariff actions.”

According to USTR, 244 domestic producers and 44 trade associations had written the agency to continue the tariffs, first placed on a variety of Chinese imports in July and August 2018. USTR cited the benefits of the tariffs put forth by producers and associations in their comments in announcing the decision:

“Representatives of domestic industries reported that they benefit from the trade action in a number of ways. For example, representatives of domestic industries reported that the July 6, 2018 action provides an incentive for the Chinese government to stop the harmful policies and practices that are the target of the tariff action. Additionally, representatives stated that the action has allowed them to compete against Chinese imports, invest in new technologies, expand domestic production, and hire additional workers. Similarly, for the August 23, 2018 action, representatives of the domestic industry reported that the additional tariffs have created more leverage to induce China to eliminate the policies and practices that are the subject of the Section 301 action, and have helped to address unfair competition resulting from China’s technology transfer policies and practices and encourage better policies and practices.”

The Alliance for American Manufacturing (AAM) was among the trade associations that submitted official comments to USTR supporting the continuation of the tariffs, warning that “[a]bandoning or eroding the Section 301 tariffs discards our negotiating leverage, is the optimal outcome for President Xi, and subjects U.S. producers and American workers to a flood of imports.”

AAM President Scott Paul continued:

“AAM strongly supports allowing USTR to continue its fact-based exclusion process without congressional mandates or any other political interference that predetermines an outcome. While an accessible and transparent exclusion process is essential for trade enforcement actions, unwarranted tariff relief may very well signal the demise of a U.S. company that is seeking to establish a market foothold or one that has reinvented itself to fill gaps in our domestic supply chains.”

The Biden administration made the right call in keeping the tariffs in place. U.S. Trade Representative Katherine Tai called the tariffs “a significant piece of leverage” while testifying before the Senate in June, and it would be unwise to take away that leverage now, especially before her agency had the opportunity to fully review their effectiveness.

And as the comments by the producers noted, the tariffs have begun to level the playing field for American manufacturers and workers who have been battered by China’s unfair trade practices for decades. Lifting them now would threaten that progress — and the timing couldn’t be worse.

Global events like the COVID-19 pandemic, supply chain crisis, Russian invasion of Ukraine, and increasing tensions between the U.S. and China over Taiwan provide evidence that the United States should not be reliant on China — our top geopolitical adversary — for the things we need.

Which is why it makes zero sense for the U.S. to go out of its way to lift the tariffs and make it easier for China to export its goods to our shores. Rather, the U.S. must work to strengthen its trade enforcement mechanisms so America’s producers can compete globally and we aren’t dependent on imports for critical goods.

The Chinese Communist Party (CCP) is rigging the game via its litany of predatory trade practices, and those practices have only gotten worse in recent years, moving from mundane trade disputes to human rights violations. Just last week, the United Nations unveiled the findings of its investigation into the CCP’s treatment of the Uyghurs and other ethnic minority groups in Xinjiang, concluding that treatment may amount to “crimes against humanity.”

The United States rightly moved last year to ban all imports from Xinjiang unless importers can definitively prove their goods weren’t made with forced labor. The U.S. must uphold that law now, and keeping the tariffs on other Chinese imports in place throughout the USTR review process is another step in the right direction.

It’s time for the United States to focus on strengthening its own manufacturing capabilities, not fall back into allowing Chinese imports to flood the U.S. market without much protest, as was U.S. policy for decades. Instead, the Biden administration must stay strong on trade. Let’s make sure that U.S. manufacturers and workers can, as Biden himself likes to say, “win the competition for the 21st century.”

We’ll monitor the USTR review of the Section 301 tariffs as they move forward. In the meantime, be sure to tell U.S. Customs officials to fully enforce the Uyghur Forced Prevention Act.