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1) WH: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices [press release]

President Biden’s economic plan is supporting investments and creating good jobs in key sectors that are vital for America’s economic future and national security. China’s unfair trade practices concerning technology transfer, intellectual property, and innovation are threatening American businesses and workers. China is also flooding global markets with artificially low-priced exports. In response to China’s unfair trade practices and to counteract the resulting harms, today, President Biden is directing his Trade Representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion of imports from China to protect American workers and businesses.

As President Biden says, American workers and businesses can outcompete anyone—as long as they have fair competition. But for too long, China’s government has used unfair, non-market practices. China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security. Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities.
Today’s actions to counter China’s unfair trade practices are carefully targeted at strategic sectors—the same sectors where the United States is making historic investments under President Biden to create and sustain good-paying jobs—unlike recent proposals by Congressional Republicans that would threaten jobs and raise costs across the board. The previous administration’s trade deal with China failed to increase American exports or boost American manufacturing as it had promised. Under President Biden’s Investing in America agenda, nearly 800,000 manufacturing jobs have been created and new factory construction has doubled after both fell under the previous administration, and the trade deficit with China is the lowest in a decade—lower than any year under the last administration.
We will continue to work with our partners around the world to strengthen cooperation to address shared concerns about China’s unfair practices—rather than undermining our alliances or applying indiscriminate 10 percent tariffs that raise prices on all imports from all countries, regardless whether they are engaged in unfair trade. The Biden-Harris Administration recognizes the benefits for our workers and businesses from strong alliances and a rules-based international trade system based on fair competition.
Following an in-depth review by the United States Trade Representative, President Biden is taking action to protect American workers and American companies from China’s unfair trade practices. To encourage China to eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation, the President is directing increases in tariffs across strategic sectors such as steel and aluminum, semiconductors, electric vehicles, batteries, critical minerals, solar cells, ship-to-shore cranes, and medical products. . . .

2) Memorandum: https://www.federalregister.gov/d/2024-11193

3) USTR: U.S. Trade Representative Katherine Tai to Take Further Action on China Tariffs After Releasing Statutory Four-Year Review [press release]

U.S. Trade Representative Katherine Tai today released the following statement concerning the statutory review of the tariff actions in the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation:

“After thorough review of the statutory report on Section 301 tariffs, and having considered my advice, President Biden is directing me to take further action to encourage the elimination of the People’s Republic of China’s unfair technology transfer-related policies and practices that continue to burden U.S. commerce and harm American workers and businesses,” said Ambassador Katherine Tai.
“As the President recognizes in his memorandum, while the tariffs have been effective in encouraging the PRC to take some steps to address the issues identified in the Section 301 investigation, further action is required.
“In light of President Biden’s direction, I will be proposing modifications to the China tariffs under Section 301 to confront the PRC’s unfair policies and practices. From the beginning of the Biden-Harris Administration, I have been committed to using every lever of my office to promote American jobs and investments, and these recommendations are no different. . . .”
The Section 301 statute directs that the four-year review includes a consideration of: the effectiveness of the tariff actions in achieving the objective of the investigation; other actions that could be taken; and the overall effects of the tariff actions on the U.S. economy. The Office of the U.S. Trade Representative’s (USTR) Report addresses the statutory elements of the review, suggests modifications to strengthen the actions, and makes certain recommendations.
To encourage further elimination of the PRC’s technology transfer-related acts, policies, and practices, Ambassador Tai has recommended that products from the PRC currently subject to Section 301 tariffs should remain. Additionally, in light of the increased burden on U.S. commerce, President Biden is directing Ambassador Tai to take action to add or increase tariffs for certain products. As the Report details, Ambassador Tai will propose the following modifications in strategic sectors:

-- Battery parts (non-lithium-ion batteries)            Increase rate to 25% in 2024
-- Electric vehicles                                                            Increase rate to 100% in 2024
-- Facemasks                                                                  Increase rate to 25% in 2024
-- Lithium-ion electrical vehicle batteries             Increase rate to 25% in 2024
-- Lithium-ion non-electrical vehicle batteries    Increase rate to 25% in 2026
-- Medical gloves                                                       Increase rate to 25% in 2026
-- Natural graphite                                                    Increase rate to 25% in 2026
-- Other critical minerals                                            Increase rate to 25% in 2024
-- Permanent magnets                                            Increase rate to 25% in 2026
-- Semiconductors                                                     Increase rate to 50% in 2025
-- Ship to shore cranes                                               Increase rate to 25% in 2024
-- Solar cells (whether or not assembled into modules)    Increase rate to 50% in 2024
-- Steel and aluminum products                            Increase rate to 25% in 2024
-- Syringes and needles                                         Increase rate to 50% in 2024

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.
President Biden is also directing Ambassador Tai to establish an exclusion process for machinery used in domestic manufacturing and to prioritize, in particular, exclusions for certain solar manufacturing equipment.
Next week, 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.  

Section 301 report: https://ustr.gov/sites/default/files/USTR%20Report%20Four%20Year%20Review%20of%20China%20Tech%20Transfer%20Section%20301.pdf
Press release: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2024/may/us-trade-representative-katherine-tai-take-further-action-china-tariffs-after-releasing-statutory

4) Background Press Call by National Economic Advisor Lael Brainard and Senior Administration Officials [transcript]

. . . Q  [Please] spell out why you think raising these tariffs will continue competition without increasing the risks of conflict given China’s own economic development goals. . . .

Q  Why did the U.S. decide to only put tariffs on EV cars and not all Chinese cars? . . . To what extent was this done now as an effort to boost President Biden’s message going into the election? . . .

Q  My understanding is that when Secretary Yellen was recently in Beijing, she did not tell her counterparts about the plan to triple tariffs on steel and aluminum.  Can you say, did she outline the other tariff increases that are being imposed when she met her counterparts? . . .

Q  [D]o you expect Chinese retaliation?  And if so, what sectors do you think they will target? . . .

Q  Wouldn’t giving Americans access to really cheap Chinese electric vehicles be good for American consumers and also bring down price pressure and inflation and also advance our transition to electronic — to electric vehicles? . . . [D]oes it also run the risk of leaving the U.S. behind if our auto industry is behind on this and our consumers aren’t driving these cars anymore while the rest of the world is advancing? . . .

Q  [Please] elaborate on how the tariff levels were set for these items and on the timing, with some of these tariffs taking effect this year, some not taking effect until 2026. . . . [A]n American consumer can buy an EV from China right now for $10,000. Was there a determination that $20,000 was a threshold that would make it too expensive or prohibitive? . . .

Q  [C]learly at 102.5 percent, you don’t want to see Chinese EVs on U.S. roads. Why not just go with Senator Sherrod Brown’s proposal and ban them altogether?

Q  Can you talk through the process about whether you considered offsetting reductions on other goods at all or whether that wasn’t seriously considered?  In other words, something to balance the net effect of it to minimize the risk of retaliation. . . .

Q  Why are these not inflationary? . . .

Q  [W]hat kind of impact [are Americans] going to see from these tariffs in the near term and in the long term?  What  kind of cost increases could they expect from this announcement? . . .


5) USTR Tai WH press briefing: https://www.whitehouse.gov/briefing-room/press-briefings/2024/05/14/press-briefing-by-press-secretary-karine-jean-pierre-and-united-states-trade-representative-katherine-tai/

6) Secy releases
Raimondo: https://www.commerce.gov/news/press-releases/2024/05/us-secretary-commerce-gina-raimondo-statement-president-bidens-action
Yellen: https://home.treasury.gov/news/press-releases/jy2336

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