WASHINGTON — The Coalition for a Prosperous America (CPA) called out rampant misrepresentation and abuse by companies seeking exclusions from the Section 301 tariffs against China in a letter to the Office of the United States Trade Representative (USTR). Multinationals that import Made in China merchandise filed two thirds of the exclusion requests shortly before the deadline to prevent domestic producers from showing that there are Made in USA alternatives.
On October 12, 2021, USTR invited importers of Made in China merchandise who had already received prior tariff waivers to apply for a renewed waiver. In October, CPA urged U.S. Trade Representative Katherine Tai to not expand exclusions to Chinese imports subject to Section 301 tariffs because companies have had over three years to move their supply chains from China, and Beijing has still refused to stop stealing American intellectual property. The tariffs were imposed on China in 2018 to respond to systematic, state-supported IP theft.
USTR did proceed with this second exclusion process. Submissions were due at midnight on December 1, 2021 and USTR received 2,024 submissions, the large majority of which were received shortly before the deadline. However, unlike the prior tariff exclusion rounds, the Biden Administration has chosen not to afford any opportunity for domestic producers to rebut unsubstantiated and false claims in importers’ requests. This was a marked departure from prior 301 tariff exclusion rounds, which is especially troubling since it has been more than three years since the findings in the China 301 investigation, with no improvement by China.
“Fairness demands that, as in USTR’s previous 301 exclusion rounds or in the Miscellaneous Tariff Bill process, representatives of domestic manufacturers have the opportunity to rebut requests for tariff exclusions,” the letter states. “However, your office elected to forgo rebuttals, leaving no opportunity for domestic producers to address unmerited submissions.”
CPA has reviewed importers’ latest submissions and found a large majority of them to be without merit. In its request for comments, USTR asked petitioners to detail “[t]he efforts, if any, the importers or U.S. purchasers have undertaken since September 2018 to source the product from the United States or third countries.” Most importers dismissed this question with bland assertions that no one in the world could match China’s quality or price. They did not offer any evidence that they tried. Meanwhile, thousands of other imports did invest the time and resources to make their supply chains more resilient and less dependent on China.
“It does not appear that any petitioner offered evidence to substantiate efforts to source from outside China,” the letter continues. “From CPA’s review, no petition documented any efforts to source from the United States or third countries.”
Read the full text of CPA’s letter to USTR here.