USTR Delays Section 301 Tariff Increases on Chinese Imports

The delay follows significant public feedback, with over 1,100 comments submitted by stakeholders. The final decision on the tariff increases is now expected sometime this month.

Following extensive public feedback, the Office of the U.S. Trade Representative (USTR) has announced a delay in the planned Section 301 tariff increases on various imports from China, which were initially proposed to take effect on August 1, 2024.

Initially implemented during the Trump Administration and reinstated by the Biden Administration, Section 301 tariff increases on Chinese imports address economic harms cited by American businesses and the unavailability of alternative product sources.

In an effort to curb Chinese unfair trade practices regarding technology transfer, intellectual property, and innovation, the U.S. had decided to implement tariff increases across various strategic sectors such as:

• Steel and aluminum
• Semiconductors
• Electric vehicles
• Batteries
• Critical minerals
• Solar cells
• Ship-to-shore cranes
• Medical products

Public comments on the Section 301 tariff increases

The USTR’s proposed Section 301 modifications in tariffs on Chinese imports resulted in over 1,100 comments from importers and other trade chain partners (TCPs).

Due to the volume of feedback and the need for a thorough review by the USTR and Section 301 Committee, the final determination has been delayed.

The decision is now expected sometime in August 2024, with the tariff increases likely to take effect approximately two weeks after the announcement.

Background on the proposed tariff increases

In May 2024, the USTR proposed significant tariff increases on $18 billion worth of Chinese goods. Some of the most notable Chinese imports subject to these increases are electric vehicles, solar cells and semiconductors.

The implementation dates range from August 1, 2024, to January 1, 2026, with some tariffs quadrupling, as in the case of electric vehicles.

Delays to proposed exclusions

The USTR has also previously declared the extension of Section 301 exclusions for Chinese imports that were set to expire on May 31 to June 14—to provide a two-week transition period for importers. However, certain exclusions have been extended to May 31, 2025.

The proposed exclusions cover a diverse range of products across several categories, including but not limited to:

• Medical equipment
• Plastic products
• Textile materials
• Electronic components

The full list of exclusions can be found in Annex C of the USTR’s Notice of Extension of Certain Exclusions.

Impact of the delay on business and trade

The delay provides businesses with temporary relief from the immediate cost impacts of the proposed tariff increases.

However, companies importing affected goods from China should prepare for potential cost increases once the final determination is announced.

Importers and other TCPs are encouraged to stay informed about the upcoming changes and adjust their supply chain strategies accordingly.

Please contact one of our trade professionals for more information and updates on the Section 301 tariff increases and their potential impact on your business.