The US President signed on 14 May 2024 a memorandum on actions by the US related to the statutory four-year review of the Section 301 investigation on Mainland China. The actions include further increasing tariffs on products imported from mainland China, in addition to the Section 301 tariffs already in place. These additional tariffs will apply to products with a total value of up to $18 billion.

 

The details of the Section 301 tariffs

Since July 2018, the US has imposed additional tariffs on Mainland products worth approximately US$370 billion under the Section 301 investigation in four tranches (Lists 1-3: 25%; List 4A: 7.5%).

 

On 5 May 2022, the USTR initiated the statutory four-year review of the tariff actions taken in 2018 under the Section 301 investigation. On 2 September 2022, the USTR announced that it had received requests from domestic industry to continue the actions and thus the tariffs would remain in effect. Proceeding to the next stage of the review, the USTR published on 12 October 2022 a notice seeking public comments by 17 January 2023 on (a) the effectiveness of the tariff actions taken under the Section 301 investigation in achieving the objectives of the investigation, other actions that could be taken (including actions against other products or services); and (b) the effects of such actions on the US economy, including consumers.

 

Pursuant to the findings of the review released on 14 May 2024, the US President issued a memorandum on the same day directing the USTR to take a range of actions on Mainland China. These include, among others, directing that the USTR shall (i) maintain, as appropriate and consistent with the memorandum, the ad valorem rates of duty and lists of products under the Section 301 investigation; and (ii) modify the tariff actions to increase Section 301 ad valorem rates of duty for the following products from Mainland China.

 

List of products subject to additional tariffs

Battery parts (non-lithium-ion batteries)	Increase rate to 25 percent in 2024
Electric vehicles	Increase rate to 100 percent in 2024
Lithium-ion electrical vehicle batteries	Increase rate to 25 percent in 2024
Lithium-ion non-electrical vehicle batteries	Increase rate to 25 percent in 2026
Natural graphite	Increase rate to 25 percent in 2026
Other critical minerals	Increase rate to 25 percent in 2024
Permanent magnets	Increase rate to 25 percent in 2026
Semiconductors	Increase rate to 50 percent in 2025
Ship to shore cranes	Increase rate to 25 percent in 2024
Solar cells (whether or not assembled into modules)	Increase rate to 50 percent in 2024
Steel and aluminium products	Increase rate to 25 percent in 2024

List of personal protective equipment subject to additional tariffs

Facemasks	Increase rate to 25 percent in 2024
Medical gloves	Increase rate to 25 percent in 2026
Syringes and needles	Increase rate to 50 percent in 2024

 

According to the memorandum, the USTR shall publish a proposed list of products and corresponding tariff increases. The USTR shall, as appropriate and consistent with law, publish a final list of products and tariff increases, if any, and implement any such tariffs, after a period of notice and comment in accordance with section 307(a) of the Trade Act of 1974, and after consultation with appropriate agencies and committees.

 

Apart from tariffs, the USTR shall also establish a process by which interested persons may request that particular machinery used in domestic manufacturing classified within a subheading under chapters 84 and 85 of the Harmonised Tariff Schedule of the US be temporarily excluded from Section 301 tariffs, and shall prioritise, in particular, exclusions for certain solar manufacturing equipment. The USTR shall publish a separate notice describing the machinery exclusion process, including the procedures for submitting exclusion requests and for interested persons to oppose any such requests.

 

According to the USTR's press release on 14 May 2024, the USTR will issue next week a Federal Register notice announcing procedures for interested persons to comment on the proposed modifications and information concerning an exclusion process for machinery used in domestic manufacturing.

 

Trade and Industry Department Hotline: 2398-5405

 

Presidential memorandum:

https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/14/memorandum-on-actions-by-the-united-states-related-to-the-statutory-4-year-review-of-the-section-301-investigation-of-chinas-acts-policies-and-practices-related-to-technology-transfer-intellectua/

 

White House's fact sheet:

https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/

 

USTR's press release:

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/us-trade-representative-katherine-tai-take-further-action-china-tariffs-after-releasing-statutory