The Office of the United States Trade Representative ("USTR") today published a request for comments on the proposed modifications and machinery exclusion process in its Four-Year Review of Section 301 tariffs (the "Review"), published last week. The Review did not recommend removing any subheadings from Section 301 tariffs, but rather proposed the following increases:
| Product | Action | Goes into effect: |
|---|---|---|
| Battery parts (non-lithium-ion batteries) | Increase rate to 25% | 2024 |
| Electric vehicles | Increase rate to 100% | 2024 |
| Facemasks | Increase rate to 25% | 2024 |
| Lithium-ion electrical vehicle batteries | Increase rate to 25% | 2024 |
| Lithium-ion non-electrical vehicle batteries | Increase rate to 25% | 2026 |
| Medical gloves | Increase rate to 25% | 2026 |
| Natural graphite | Increase rate to 25% | 2026 |
| Other critical minerals | Increase rate to 25% | 2024 |
| Permanent magnets | Increase rate to 25% | 2026 |
| Semiconductors | Increase rate to 50% | 2025 |
| Ship to shore cranes | Increase rate to 25% | 2024 |
| Solar cells (whether or not assembled into modules) | Increase rate to 50% | 2024 |
| Steel and aluminum products | Increase rate to 25% | 2024 |
| Syringes and needles | Increase rate to 50% | 2024 |
The Review also proposes a framework for establishing an exclusion
process for machinery used in domestic manufacturing under HTS
Chapters 84 and 85, as well as 19 types of solar manufacturing
equipment covered under Chapter 84. No mention was made in the
Review of a possible extension of Section 301 exclusions currently
in place for the 352 assorted and 77 Covid-19-related exclusions
scheduled to expire on May 31, 2024; however, a separate Federal
Register notice published today details extensions of certain
exclusions through May 31, 2025. All exclusions currently in place
will be extended at least until June 14, 2025, after which
exclusions currently in place for 102 products–for which USTR
has determined no effect of tariffs on shifting production from
China with no comments submitted to the contrary–will
expire.
Per USTR, interested parties are invited to comment on the following:
- The effectiveness of the proposed modification in obtaining the elimination of or in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
- The effects of the proposed modification on the U.S. economy, including consumers.
- The scope of the product description to cover ship-to-shore cranes under subheading 8426.19.00 (Transporter cranes, gantry cranes and bridge cranes).
- With respect to facemasks, medical gloves, and syringes and needles, whether the tariff rates should be higher than the proposed rates.
- With respect to facemasks, whether additional statistical reporting codes under tariff subheading 6307.90.98 should be included.
- Whether the tariff subheadings identified for each product and sector adequately cover the products and sectors included in the President's direction to the Trade Representative.
USTR is also seeking comments on whether the proposed exclusions of subheadings of Chapters 84 and 85 included in the notice should be altered, as well as comments on the scope of exclusions relating to solar manufacturing equipment.
The comment docket will open May 29 and will remain open until June 28, 2024. USTR is expected to post a copy of questions for which it seeks comments on May 24, 2024. Please reach out to [insert attorney name here] if you wish to have Crowell submit comments on your behalf.
Read a copy of the notice here.
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