Article By: Rick Walker, Vice President, TradeInsights, LCB/CCS

It’s been a long wait, but the United States Trade Representative (USTR) Katherine Tai has just released the statutory report which investigated actions under Section 301 of the Trade Act of 1974 to determine whether the acts, policies, and practices of the Government of China related to technology transfer, intellectual property (IP), and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce. The report, issued on May 13 named “Findings of the Investigation Into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of the Trade Act of 1974” (“Section 301 Report”), determined that China did employ a series of technology transfer-related acts, policies, and practices that are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under section 301(b) of the Trade Act.

In the report which can be found here, Katherine Tai explained “After a thorough review of the statutory report on Section 301 tariffs, and in light of my recommendations, President Biden has directed me to take further steps to counteract the People’s Republic of China’s unfair technology transfer-related policies and practices. These measures continue to impede U.S. commerce and adversely affect American workers and businesses.” You can read the White House Fact Sheet here.

The recommendation is that products from China that are currently assessed additional duties under the Section 301 duties will continue to be subject to these duties, and certain items of China origin will receive an increase as per the following:

The Report also makes recommendations for: (1) establishing an exclusion process targeting machinery used in domestic manufacturing, including proposals for 19 exclusions for certain solar manufacturing equipment; (2) allocating additional funds to United States Customs and Border Protection for greater enforcement of Section 301 actions; (3) greater collaboration and cooperation between private companies and government authorities to combat state-sponsored technology theft; and (4) continuing to assess approaches to support diversification of supply chains to enhance our own supply chain resilience.

Next week, the USTR will issue a Federal Register notice announcing procedures for interested persons to comment on the proposed modifications and information concerning an exclusion process for machinery used in domestic manufacturing. We will publish the Federal Register Notice as soon as it is available.

We know that a lot of importers are interested in the status of the remaining 352 exclusions which are set to expire on May 31, 2024. There are also 77 Covid 19 related exclusions set to expire on May 31. The report only makes mention of the fact that they are both set to expire on May 31.

Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions.