Additional Action Needed to Decouple from China
WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded the Biden administration for finalizing actions to increase Section 301 tariffs on strategic imports from China and maintaining all existing Section 301 tariffs. This follows a thorough four-year review by U.S. Trade Representative (USTR) Katherine Tai. The tariffs, originally implemented during the Trump administration and strongly supported by CPA, will now be raised on critical sectors, including steel and aluminum, semiconductors, electric vehicles, batteries, solar cells, critical minerals, ship-to-shore cranes, and medical products. A detailed CPA economic analysis on these actions can be found here.
An economic analysis by CPA’s Chief Economist Jeff Ferry highlights that tariffs have had a positive impact on the U.S. economy, driving significant reshoring, and reducing reliance on China. Moreover, the U.S. International Trade Commission (USITC) found that Section 301 and Section 232 tariffs have effectively stimulated domestic production without increasing consumer prices.
“President Biden and Ambassador Tai’s decision to raise tariffs across key sectors sends a clear message that the U.S. is serious about reducing our dependence on China and safeguarding American workers and manufacturers from predatory trade practices,” said Zach Mottl, Chairman of CPA. “The China tariffs have already proven to be an essential tool for reshoring and strengthening domestic production. Today’s action continues the shift toward a bipartisan industrial policy that prioritizes U.S. economic security and growth.”
However, CPA strongly believes that more action is needed to strategically decouple from China and ensure a prosperous future for America’s workers and manufacturers. This includes revoking China’s Most Favored Nation (MFN) status to prevent further exploitation of U.S. markets and passing legislation to close the de minimis loophole. An economic analysis from CPA found that revoking China’s MFN status would result in the creation of 2 million new American jobs, increase real household incomes by $3,647, and increase real gross domestic product (GDP) by 1.75%.
“Today’s action is a positive step, but it’s not enough,” added Mottl. “We must go further by revoking China’s MFN status and eliminating the de minimis loophole that allows China to continue flooding the U.S. market with millions of packages per day, some filled with deadly fentanyl and other dangerous goods. These steps are critical to ensuring that American workers and businesses are no longer undercut by China’s predatory trade practices or killed by Chinese fentanyl.”
The USTR’s action comes amid growing bipartisan support for maintaining and increasing Section 301 tariffs. Recently, House Ways and Means Committee Chairman Jason Smith (MO-08) and Trade Subcommittee Chairman Adrian Smith (NE-03) emphasized the importance of these tariffs in protecting American workers. Additionally, a group of U.S. Senators led by Sherrod Brown (D-OH) and joined by Bob Casey (D-PA), Tammy Baldwin (D-WI), John Fetterman (D-PA), Gary Peters (D-MI), Chuck Schumer (D-NY), and Debbie Stabenow (D-MI) also urged President Biden to maintain or increase these tariffs.
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