US-China trade: Washington’s review of US$300 billion in tariffs cannot be ‘half-hearted’
- Tariffs imposed on Chinese goods during the Trump administration are due to expire this year, and a review must happen within 60 days of their end
- Even with US inflation running at a 39-year high, China’s failure to meet terms of the phase-one trade deal could force President Joe Biden’s hand
The United States will soon start a review of the first group of tariffs on more than US$300 billion worth of Chinese imports that is needed to prevent their expiration – a process which may bring new scrutiny of the tariffs’ effectiveness as inflation runs at near a four-decade high.
The evaluation under President Joe Biden, officially known as a “review of necessity”, so far has attracted little attention. It relates to Section 301 of the Trade Act of 1974, the law that former president Donald Trump used to hit China with the tariffs starting in July 2018.
The law states that the tariffs expire four years after they were imposed, unless the US Trade Representative’s office analyses their effectiveness and consequences. The review needs to happen within 60 days of their potential end, which is July 6 for the first group of US$34 billion worth of Chinese goods, with the majority set to expire in the following months.
“This isn’t something that can be ignored,” said Stephen Kho, a partner in the Washington office of law firm Akin Gump Strauss Hauer & Feld LLP, which represents clients who have previously sued to have some of the duties removed. “You can’t just do this process in a half-hearted manner. The review will bring renewed interest in dealing with the Section 301 tariffs.”
The USTR’s press office confirmed the need for the review.