China Section 301 Trade Actions Announced

China Section 301 Trade Actions Announced

  • On Thursday, President Trump signed a memorandum directing his Administration to take a range of actions responding to China’s acts, policies, and practices involving the unfair and harmful acquisition of U.S. technology.
  • Under Section 301 of the Trade Act of 1974, last August, the U.S. Trade Representative (USTR) initiated an investigation to determine whether China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable, unjustifiable, or discriminatory and burden or restrict U.S. commerce.
    • A transcript of remarks made by President Trump during the signing of the memorandum can be found here.
    • President Trump used his remarks to restate long-standing complaints with U.S./China trade and other trade policies, including NAFTA, and also promised that Friday’s trade action is the "first of many."
    • A White House fact sheet of Friday’s action can be found here.
    • A USTR fact sheet can be found here.
  • According to a USTR press release published shortly after the signing of the memorandum, the President has instructed that the appropriate response to China’s harmful acts, policies and practices should include three separate actions:
    1. Tariffs – The President has instructed the USTR to publish a proposed list of products and any tariff increases. The President announced he would impose 25 percent ad valorem duties on $50-$60 billion of U.S. imports from China.

    • While the President and members of his cabinet spoke about the importance of dealing with Chinese IP theft, very few details were shared other than that tariffs would be imposed and that the list of products will "include aerospace, information and communication technology, and machinery." An actual list of products was NOT announced or published. The announcement, and subsequent fact sheets, however, went out their way to make clear that the product list is not limited to these items. As such, it is difficult to understand the full impact of this process until the list of targeted products is released and finalized.
    • WHAT’S NEXT? As per USTR:
      • "The Presidential Memorandum instructs USTR to publish a proposed list of products subject to additional tariffs within 15 days."
      • USTR said it would publish the list "in the next several days."
      • "The list will be set out in a Federal Register notice seeking public comments on the proposed tariff action. The notice will also announce a date for a public hearing."
      • "Comments will be due 30 days from publication."
      • "USTR, with the assistance of the interagency Section 301 Committee, will review and analyze the comments."
      • "When the process is completed, USTR will announce the final determination on the tariff action and will publish the product list in the Federal Register."

    2. WTO dispute – The President has instructed the Trade Representative to pursue dispute settlement in the World Trade Organization (WTO) to address China’s discriminatory technology licensing practices.
    3. Investment restrictions – The President has directed the Secretary of the Treasury to address concerns about investment in the United States directed or facilitated by China in industries or technologies deemed important to the United States.

  • USTR has also published a comprehensive report on the findings of the Section 301 Investigation. The report is available here.
  • TGA Next Steps
    • TGA will continue to track the Section 301 actions closely and report updates.
    • TGA will continue to participate in advocacy opportunities on this process before Congress and the Administration.
    • TGA expects to submit comments for the Federal Register notice process, including possibly testifying at the hearing.
      • We will solicit member input on any products on the list on which we need to comment AND/OR to preempt the addition of any products that we wish to keep excluded.
    • TGA encourages member companies to contact their Members of Congress and the President to express opposition to new tariffs by sending an email through this link.
      • Please feel free to share that link with your coworkers, friends, neighbors, and family.

Please contact Nate Herman, TGA’s Director of Government Relations, with any questions, 202-853-9351, nate@travel-goods.org.