Automatic Extension of China Tariff Exemptions Sought by Lawmakers

Several members of Congress are pushing the Trump administration to automatically renew exclusions from the 25 percent additional tariff imposed on $50 billion worth of imports from China. Those exclusions, which are being announced in stages, are currently effective for one year after they are published.

Noting that the one-year anniversary of the Section 301 tariffs on so-called List 1 and List 2 goods from China is nearing, the bipartisan group of four lawmakers encouraged U.S. Trade Representative Robert Lighthizer to “see the value in automatically granting renewed exclusions for products which had already received an exclusion.” As of June 7 USTR had granted about 2,400 exclusions for List 1 goods but had yet to approve any for List 2 goods, with most requests having been denied and some still under review. The letter argued that it would be a “mistake” to allow those exclusions that have been granted to expire “even though there is no change in circumstances;” i.e., the U.S. and China have yet to reach an agreement to resolve the issues underlying the decision to impose the tariffs in the first place.

The lawmakers therefore urged USTR to ensure that currently exempted goods “continue to be exempted from tariff application under any list until the tariffs have been completely lifted.” Observers have noted that some goods on USTR’s proposed List 4, which covers $300+ billion in imports from China and could be assessed an additional 25 percent tariff in the coming weeks, have been previously exempted from lists 1 or 2.

The lawmakers also advised Lighthizer that any exclusions granted for List 3 goods (imports of which are valued at $200 billion) should be retroactive to September 2018, when a 10 percent tariff on such goods was imposed. That tariff was increased to 25 percent for goods exported after May 10 and entered after June 15. Congress directed USTR to develop an exclusion process for List 3 goods but USTR has yet to announce the details of this process.

Source: Sandler, Travis & Rosenberg

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