The Biden administration’s decision to maintain Section 301 China tariffs and implement new tariffs has U.S. retail and brand companies up in arms over its decision released this week.
The increased tariffs, introduced under the Trump administration, were widely expected to be removed or cut after the statutory four-year review of Section 301 China tariffs by the U.S. Trade Representative (USTR).
Certain exclusions within the current tariff structure were scheduled to expire at the end of May. Without action, those exclusions will be removed.
Americans for Free Trade (AFT), an organization that identifies itself as a “broad coalition of American businesses, trade organizations and workers united against tariffs,” quickly responded to the announcement.
“Americans for Free Trade is extremely disappointed by the Biden administration’s decision to maintain the harmful Section 301 China tariffs on many non-strategic products, including consumer goods, to the detriment of American workers, consumers and businesses,” the AFT wrote in a media release. “The tariffs have been a failed policy attempt to change China’s behavior. USTR and the administration must find alternative solutions to address the ongoing issues with China, but also provide more opportunities for American companies to shift their supply chains.”
AFT said that throughout the review process, the USTR received hundreds of comments from businesses large and small that have been negatively impacted by the tariffs.
“It is unfortunate that these comments were ignored. Maintaining the tariffs, and even increasing them in some categories, will lead to increased prices and nullify any progress the United States has made to combat inflation,” the AFT continued.
The AFT did give a nod to the USTR’s indication of a new exclusion process for machinery used in domestic manufacturing, but it also noted that the USTR is “silent on the existing exclusions that are set to expire at the end of May.
“We call upon USTR to immediately renew these exclusions, which have provided limited but important relief for some U.S. businesses—especially for products that have been delayed because of ongoing supply chain disruptions,” AFT continued. “In addition, we reiterate our call for USTR to provide a robust and transparent exclusion process for all products that remain subject to the Section 301 China tariffs, especially now that the tariffs have been adjusted.”
Retail Organizations Respond
The Retail Industry Leaders Association (RILA) also issued a statement regarding the USTR inaction, with Blake Harden, RILA’s vice president for international trade, pushing back on the decision to not only maintain tariffs on consumer goods but also to implement new industry tariffs.
“We are deeply disappointed by the Biden Administration’s decision to double down on the use of harmful, broad-based tariffs, which is an affront to American businesses and consumers,” wrote Harden. “Over the last five years, U.S. businesses and consumers have paid more than $215 billion in higher tariffs for a failed experiment in trade policy. Section 301 tariffs have not been effective in holding China accountable for its unfair trade practices, and they have harmed the global competitiveness of U.S. businesses.”
Harden said leading retailers have worked hard to bolster their supply chains to be more agile and resilient in uncertain economic conditions and shield customers from the impact of high tariffs. She lamented that after carrying the weight of Section 301 tariffs for over five years, it is clear that tariffs are taxes ultimately paid by American businesses and consumers—not China.
“Broad-based tariffs are not strategic and will impede U.S economic growth, ultimately hamstringing American businesses trying to compete globally and negatively impacting the paycheck of American workers,” Harden stated. “It’s time for the U.S. to explore more strategic avenues for holding China accountable and release U.S. retailers, workers and the economy at large from the grip of stifling tariffs on consumer products. As the Biden administration and Congressional lawmakers consider policies to address the challenges in the U.S.-China relationship, we urge them to explore a more strategic, targeted approach that increases U.S. competitiveness globally.”
The National Retail Federation (NRF) also issued a statement regarding the issue with Section 301 China tariffs.
NRF Executive Vice President of Government Relations David French said the retail trade association was “extremely disappointed” that the USTR and the Biden administration chose to double down on a failed and inflationary strategy by sustaining and expanding the Section 301 China tariffs.
“Maintaining these tariffs on consumer goods will increase costs that consumers pay on everyday products imported from China,” French asserted. “As consumers continue to battle inflation, the last thing the administration should be doing is placing additional taxes on imported products that will be paid by U.S. importers and eventually U.S. consumers. The ongoing Section 301 China tariffs have not worked to force China to change its trade practices. We need a new strategy that will address the core issues and provide actual incentives for U.S. companies to shift their supply chains from China.”
French said the U.S. needs new free trade agreements focusing on market access and tariff reductions.
“We need Congress to pass long-standing trade preference programs which remain expired,” he said. “The U.S. economy needs real incentives—unlike those in the form of penal tariffs—to shift supply chains away from China. USTR must immediately renew the exclusions that are set to expire at the end of the month and open a fair and transparent exclusions process for all products covered by the tariffs.”
