The U.S.-China Business Council is frustrated and dismayed by a decision on tariff exclusions on imported good and products from China announced March 23.
The Office of the U.S. Trade Representative announced 352 tariff exclusions were reinstated retroactively from Oct. 12, 2021, to Dec. 31, 2022. There had been requests for 549 categories covering a total of 53,000 products impacted by tariffs imposed during Donald Trump's administration in 2018-29. President Joe Biden’s decision lifts the tariff on fewer than 7,000.
Douglas Barry, the USCBC vice president for communications and publications, told Commerce Newswire that there is no clear reason why some products were included and others excluded. The availability of products from other sources has been listed as a criteria, Barry said.
One thing is evident, however and that is U.S. consumers and companies will pay a price for this decision.
“We have not yet done a tariff line by tariff line analysis to see who might be more affected,” Barry said. “The U.S. continues to import large amounts of goods from China, and U.S. exports to China are up more than 20%. There’s a company in Minnesota that makes audio speakers. Some of their components are made in China and have a tariff of 25%. Their customers can buy speakers from suppliers in Asia with a tariff of 5%.
“It’s causing serious harm to their business which employs American workers, many who are older and lack significant formal education,” he said. “Stories like this are repeated across the country. The policy is illogical and self-defeating.”
The USCBC said tariffs of around 20% will remain on thousands of Chinese items brought to the United States. Many of them are intermediate goods used to produce completed products.
“We know that the tariffs are a tax on U.S. businesses and consumers, that they haven’t influenced China’s behavior, which was the purported justification, they likely contribute to domestic inflation, and they negatively affect U.S. companies of all sizes, especially many smaller businesses that struggle to survive after more than two years of a pandemic,” USCBC President Craig Allen said in a release issued Thursday. “The tariffs should be eliminated. They serve no useful purpose or policy goal.”
Trump imposed the 301 tariffs ranging from 7.55% to 25% on a wide range of Chinese imports, estimated to total $370 billion in 2018 and 2019. He slapped tariffs on products from several countries, leading to escalating trade wars that critics said caused as much pain in the United States as it did in other countries.
Trump cited unfair trading practices and intellectual property theft on the part of the Chinese. It became a major campaign issue in 2020, with Biden calling them “damaging, reckless and disastrous.” However, analysts said he likely would retain some of the tariffs once elected, and the March 23 announcement made that prediction look prescient.
Under an “exclusion process,” importers and manufacturers are permitted to petition the Office of the U.S. Trade Representative to exempt certain products imported from China from the Section 301 tariffs.
In its release, the USCBC encouraged the trade representative to “articulate a clear process and criteria to evaluate requests for tariff exclusions.” It called on creating a comprehensive exclusion request program to allow importers to request relief.
The USCBC’s stance is supported by 250 members of Congress who have asked for a review of the exclusion process on a bicameral, bipartisan basis. Barry, however, told Commerce Newswire he is not optimistic the policy will be changed.
The U.S.-China Business Council, founded in 1973, is a private nonpartisan, nonprofit organization of more than 260 American companies that do business with China. Founded in 1973 the USCBC has provided unmatched information, advisory, advocacy, and program services to its members for nearly five decades. It maintains offices in Washington, D.C., Beijing and Shanghai.
“USCBC's mission is to expand the U.S.-China commercial relationship to the benefit of its membership and, more broadly, the U.S. economy,” its website states. “It favors constructive, results-oriented engagement with China to eliminate trade and investment barriers and develop a rules-based commercial environment that is predictable and transparent to all parties.”
