Hoeven: USTR Commits to Provide Exclusion Process Should Chinese Tariffs Increase

Senator Encourages Administration to Reach a Trade Deal with China

WASHINGTON – Senator John Hoeven today announced that U.S. Trade Representative (USTR) Robert Lighthizer has committed to establish an exclusion process should round 3 of the Section 301 tariffs on Chinese goods increase on March 2. While the Senator is hopeful the Administration can reach a trade deal with China and prevent any escalation of tariffs, he pressed USTR to provide businesses with the opportunity to request the exclusion of a specific product from the increased duties, especially when the product is not available elsewhere or if it will cause severe economic harm. 

“We are encouraged by the Administration’s recent trade negotiations with China and continue to urge the Administration to reach a trade deal with China to prevent an escalation in tariffs,” said Hoeven. “At the same time, we appreciate USTR’s commitment to establish an exclusion process should tariffs increase in March. An exclusion process will ensure that tariffs have the intended effect of pressuring China to address its bad behavior, while also considering the impact of tariffs on U.S. companies, their employees and customers.” 

Following the announcement of additional Chinese tariffs last fall, Hoeven sent a letter to USTR requesting an exclusion process for round 3 of the tariffs, as was established for the first two rounds. The senator also spoke directly to USTR Ambassador Lightizer to outline the importance of the exclusion process for U.S. companies. 

“While these negotiations [between the U.S. and China] are ongoing, President Trump agreed to delay until March 2, 2019, an increase in the additional duty rate on the products covered by the $200 billion trade action from 10 to 25 percent. If the duty rate on the $200 billion tariff action is raised to 25 percent, USTR will initiate an appropriate exclusion process,” USTR wrote in response to Hoeven’s letter. 

Due to China’s violation of U.S. intellectual property rights and forced technology transfer policies, President Trump has imposed 3 rounds of section 301 tariffs on products imported from China. USTR set up an exclusion process for U.S. companies to submit requests for products to be removed from the first two rounds of Section 301 tariffs The third round was imposed on $200 billion worth of U.S. imports from China on September 24, 2018, but no such exclusion process has been set up. The tariff began at 10 percent, and was originally going to be raised to 25 percent on January 1, 2019. However, on December 1, President Trump and Chinese President Xi Jinping agreed to a 90 day period during which negotiations will take place and there will be no tariff escalation. The tariffs are now scheduled to increase on March 2, 2019 if a deal cannot be reached before then.