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With the onset of the COVID-19 pandemic, U.S. Trade Representative (USTR) exempted COVID-related imports from China from 25% duties for certain medical products. In light of changing circumstances, increased domestic production, and increased availability of related medical products, USTR is requesting comments on withdrawing the Section 301 tariff exclusions for 81 COVID-related product categories. The comment period is an opportunity for interested parties to let USTR know how exclusions for medical-related Chinese imports are impacting product availability and U.S. production of essential medical supplies.

What Are the Section 301 Duties?

In 2018 and 2019, the Trump administration placed 25% duties (301 duties) on approximately $370 billion worth of Chinese imports. These duties remain in place today and are reviewed every four years as required by the Trade Act of 1974. Section 301 of the Trade Act of 1974 allows USTR to enforce U.S. rights under trade agreements and address unfair foreign barriers to U.S. exports. Section 301 also authorizes USTR to take various actions, including increased tariffs on goods imported into the U.S. from the country under investigation. The Trump administration conducted a Section 301 investigation into China’s economic practices and imposed tariffs on Chinese goods imported into the U.S. market for (1) forced technology transfer requirements; (2) cyber-enabled actions to acquire U.S. IP and trade secrets illegally; (3) discriminatory and nonmarket licensing practices; and (4) state-funded strategic acquisition of U.S. assets.

U.S. Trade Representative’s Request for Comments

On March 25, 2020, in light of the coronavirus outbreak, USTR requested public comments on proposed modifications to exclude certain COVID-related medical-care products from Section 301 duties. Following USTR’s December 2020 decision to exclude an initial list of 99 products from Section 301 duties, and their most recent decision to extend exclusions on a narrowed list of 81 products, USTR is again requesting comment on the impact and effectiveness of COVID-related exclusions in advance of their February 28, 2023 expiration. Accordingly, USTR is adopting an interim, 75-day extension of the 81 COVID-related product exclusions to allow for consideration of public comments. The opportunity to file comments expires on March 7, 2023.

USTR’s request for comments indicate the Biden administration is phasing out COVID-19 relief, including tariff exemptions for Chinese imports. U.S. manufacturers provide a more secure supply chain for medical-care products needed by hospitals, ranging from personal protective equipment such as masks and gloves to hospital equipment such as blood pressure monitors. USTR’s request for comments provides an opportunity for U.S. manufacturers to respond and potentially get meaningful relief that protects them – both their production operations, their profitability, and their workers. Hospitals and other medical-care product consumers also have an opportunity to request that tariff exclusions continue for goods for which there are few alternatives to China.

Buchanan has a team of international trade and national security attorneys ready to help U.S. manufacturers who are concerned about competition from Chinese imports – either with comments on Section 301 tariffs or otherwise. U.S. trade remedy laws are one of the only available tools to reestablish an even playing field for American companies and avoid lost sales and profits. Our eBook, Protecting Domestic Producers: A Guide to Antidumping and Countervailing Investigations, shares details on how diverse domestic industries can take advantage of these laws – antidumping and countervailing duty investigations – to combat unfair foreign competition and receive adequate remedies and protections. Additionally, Buchanan has extensive experience in the life sciences industry and attorneys that focus their practice on issues dealing with the Food and Drug Administration. These professionals can help U.S. companies navigate FDA laws and regulations affecting those industries that will have to respond to the changing legal landscape for COVID-related medical-care products.

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