White House Raises Section 301 Ante, China Responds

Aerial view of water and dock covered in shipping containers
US Trade Representative Robert Lighthizer issued a statement on August 2, 2018, advising that President Trump has directed him to consider raising the previously proposed 10% additional duty to be applied to $200 billion worth of Chinese goods (referred to as the List 3 products) to 25%.

It appears that this action is being taken in response to the Chinese retaliatory response to the imposition of 25% duties on the List 1 products, implemented on July 6, 2018 and the current consideration of an additional 25% duty on another $16 billion of Chinese imports (List 2 Products).

In response to this latest US announcement, China announced on August 3, 2018 that it has prepared a list of $60 billion worth of US goods to levy with duties should the US impose duties on the proposed additional $200 billion of Chinese goods, as early as next month. The Chinese duties ranging from 5 percent to 25 percent would be levied on 5,207 kinds of American imports, the Ministry of Finance said in a statement on its website. The lists were published on its website, and include additional agricultural goods and energy exports, among other items.

These actions, somewhat akin to an acrimonious poker game (“I will see your duties and raise the amount another $100 billion in goods”), have been on-going since early spring when tariffs on 818 product lines valued at $34 billion (List 1 Products) were first announced. The imposition of the US duties was the result of the USTR’s Section 301 review of certain Chinese practices it believes to be unfair, illegal under the WTO rules, harmful to US interests and hindering free and fair trade between the two countries. For additional background see our previous Alerts on these Section 301 actions

Though there has been no change to the proposed duty rate yet, the USTR has instructed parties to address the possible increase from 10% to 25% as part of the ongoing notice and comment process. Given the addition of this factor, the deadlines for submissions of written comments and requests to appear at the hearing regarding the Section 301 List 3 products are being adjusted. The new schedule for participating in the notice and comment process for List 3 products is as follows:

  • Request to Appear at Hearing: August 13, 2018 (note that a summary of anticipated Hearing Statement and any pre-hearing comments must be submitted at this time)
  • Public Hearing: August 20-23, 2018 (to be held at the International Trade Commission)
  • Submission of Written Comments and Post Hearing Rebuttal Comments: September 5, 2018

Due to the significant potential impact these additional duties may have on a wide-range of products from China, importers are urged to review their imports from China and, if they are importing any of the products on List 3, to consider, at a minimum, filing written comments and possibly appearing at the public hearing.

Arent Fox has developed a program to assist importers in estimating the impact based on prior imports. If you would like more information on this program, on participating in the notice and comment process, or on how you can minimize the impact of these potential duties, please contact any Arent Fox trade group member listed below.


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