USTR suggests exclusion process for 10 percent 301 tariffs is not imminent

Editor’s note: CPA has previously informed USTR of the impact of China’s devaluation since the tariffs were put in place. Ambassador Lighthizer’s decision against an exclusion process is based, in part, on that devaluation. 

[February 27, 2019 |]

Despite instructions from the House Appropriations Committee in a government funding package signed by the president earlier this month, U.S. Trade Representative Robert Lighthizer on Wednesday signaled that a product-exclusion process for tariffs on $200 billion worth of Chinese goods would be instituted only if the 10 percent tariffs are increased to 25 percent.

“I have certainly taken the position that if we go to 25 percent, we will,” Lighthizer said in response to a question from Rep. Judy Chu (D-CA). “I have taken that commitment to have an exclusion process. Short of that I sort of want to see where we are and I hope that [companies seeking exclusions are] thinking about ways to manufacture more in the U.S.”

Rep. Jackie Walorski (R-IN) asked Lighthizer if USTR would meet a 30-day deadline she said was set by the House Appropriations Committee in the government funding package to establish an exclusion process for the tariffs on $200 billion of Chinese goods. Lighthizer corrected Walorksi, noting that the language on the 30-day deadline was included in the committee report on the bill and not the legislation itself.

“I would say first of all that that was a report from the Appropriations Committee,” he said. “I understand that there are people in Congress who want us to have an exclusion process. It’s something that we’re looking at. Our view till now has been that we would have an exclusion process for the $50 billion, which was at 25 percent. The 10 percent, which is what you’re referring to in this case, that there would not be an exclusion process.”…

“I would note that since the date that we put that in place, there has been a seven or eight — depending on when you stop — devaluation of the Chinese currency, so that the effect has been less significant than fully 10 percent on those people that are affected. And our hope is that we can deal with this in the context of our negotiations with the Chinese.”

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