The Biden Administration has chosen to allow temporary Section 301 taxes on Americans who import goods from China to remain in place indefinitely.
Section 301 tariffs last for up to four years unless a representative of an industry which benefits from them requests that they be maintained. If such a request is received, USTR must conduct a review of the tariffs’ effectiveness and their overall impact on the U.S. economy.
But on September 2, without having conducted a review, the Office of the U.S. Trade Representative (USTR) wrote: “The July 6, 2018 [tariff] action, as modified, did not terminate on July 6, 2022, and will remain in effect, subject to possible further modifications. The August 23, 2018 [tariff] action, as modified, did not terminate on August 22, 2022, and will remain in effect, subject to possible modifications.”
Those actions refer to 25 percent taxes on $50 billion in imports from China that the Biden administration kept in place. An additional 10 percent tax on $200 billion in imports is scheduled to terminate later this month.
By choosing not to decide whether the tariffs are both effective and beneficial, USTR made the choice to keep them in place indefinitely while it reviews them.
There’s really not much to review. Evidence continues to mount that the tariffs were ineffective in achieving their stated objectives and that their costs outweigh their benefits.
- According to the U.S.-China Economic and Security Review Commission, Section 301 tariffs were followed by broadened Chinese intervention in the economy to achieve the Chinese Communist Party’s economic, social, and political goals.
- According to USTR, Section 301 tariffs failed to result in fundamental changes to China’s state-led, non-market trade regime.
- According to nearly every academic economic study, the cost of Section 301 tariffs on the U.S economy exceeds the benefits.
There is no excuse for the Biden administration’s decision to extend tariffs by failing to review them in a timely manner.
Bryan Riley is Director of the National Taxpayers Union’s Free Trade Initiative.