U.S. Reps. Jackie Walorski (R-Ind.) and Ron Kind (D-Wis.) recently introduced the Import Tax Relief Act, a bipartisan bill that would require the Executive Branch to create an exclusion process for List 3 (and any future list) of Chinese imports subject to Section 301 tariff imposition.
Consistent with precedent and requirements placed on the U.S. Trade Representative (USTR) in the recent government funding bill, U.S. companies would also be able to apply for a refund for duties paid on imported good subject to these tariffs that are granted an exclusion. Senators James Lankford (R-Okla.) and Chris Coons (D-Del.) introduced companion legislation in the Senate.
In a Ways and Means Committee hearing, Walorski pressed U.S. Trade Representative Robert Lighthizer on the lack of a product exclusion process for the third round of tariffs on Chinese imports. In response to questions from Walorski, Lighthizer indicated USTR would not meet the 30-day deadline to establish a process as directed by Congress in the recent funding bill.
“I support President Trump’s goal of stopping China’s unfair trade practices, but we need to do so in a way that does not harm American farmers, manufacturers, and workers,” Walorski said. “A fair and transparent exclusion process for the latest round of China tariffs is long overdue, but it is clear USTR does not intend to meet the deadline imposed by Congress to establish one. As a result, this bipartisan bill is necessary to provide much-needed relief to the American businesses and consumers paying the cost of these import taxes. I am hopeful the ongoing trade talks with China will lead to long-term benefits for our economy, but the administration must do more to create certainty for businesses and farmers and to stay focused on the goal of holding China accountable.”
The first two rounds of tariffs imposed under Section 301 of the Trade Act of 1974 included an exclusion process (the process by which U.S. importers can request exemption from the tariffs), but the third round, imposed on $200 billion worth of Chinese goods, did not include such a process. The third tranche of tariffs was imposed on Sept. 24, 2018, pursuant to Section 301 of the Trade Act of 1974.
According to the Congressional Research Service, as of Feb. 21, U.S.-based importers have paid $12.2 billion to the government as a result of tariffs imposed under Section 301 of the Trade Act of 1974, more than double the $5.8 billion collected in tariffs on steel and aluminum pursuant to Section 232 of the Trade Act of 1974.
In October, Walorski and Kind led a bipartisan coalition of 169 members of Congress in calling on Lighthizer to establish an exclusion process in regards to Section 301 tariffs.