In a recent ruling, United States Customs and Border Protection has determined that Chinese-origin goods that are assembled in and exported from a third country remain subject to Section 301 tariffs unless they have been “substantially transformed” in the third country.
On April 25, 2018, the Global Business Dialogue held an event at the National Press Club titled, “Searching for Reciprocity: Section 301 and the Future of U.S.-China Trade”. In a paper prepared for the event, the author reviews the serious and longstanding U.S. concerns in areas such as forced technology transfer, discriminatory licensing restrictions on U.S. companies, outbound investments in strategic industries and cyberattacks, theft of intellectual property, and the Trump Administration’s investigation under section 301 of the Trade Act of 1974, as amended, of these practices and its conclusions on the same.
In a trade flow in April of last year, I reviewed the structure and process under Section 232 of the Trade Expansion Act of 1962, as amended, based on the Commerce Department’s initiation on April 19, 2017 of an investigation into imports of steel into the U.S. and their effect on national security. See http://www.stewartlaw.com/Article/ViewArticle/1103. A second 232 investigation was initiated one week later on April 26, 2017, on imports of aluminum into the U.S.
At the beginning of the week, the President issued two Proclamations providing safeguard relief to the domestic solar cell industry and to the large residential washing machine industry. These Proclamations followed investigations by the U.S. International Trade Commission pursuant to section 201 of the Trade Act of 1974, as amended (19 U.S.C. 2251 et seq.), and subsequent interagency review of potential remedies and other issues.
The September 5th World Trade Organization Appellate Body report in US – Tyres (China), WT/DS399, affirmed the right of the United States faced with market disruption from surging imports from China to make use of a special transitional safeguard China accepted as part of its accession protocol to the WTO in 2001. For the industries and their workers who have sought relief under the U.S. law implementing this right (Section 421 of the Trade Act of 1974, as amended (19 U.S.C. § 2451)), it was a vindication of the correctness of their cause.
On September 11, 2009, President Obama granted relief under the China-specific safeguard created in 2000 as part of China’s accession to the World Trade Organization. Though seven cases have been pursued under Section 421, and the independent, bipartisan International Trade Commission (“ITC”) recommended that import relief be imposed in five of those cases, the tires case is the first in which the President has agreed to apply a remedy.