Portman, Carper Lead Senate Call for Administration to Relaunch a Comprehensive Tariff Exclusion Process

February 7, 2022 | Press Releases

WASHINGTON, D.C.— U.S. Senators Rob Portman (R-OH) and Tom Carper (D-DE) today led 39 of their colleagues in sending a bipartisan letter to U.S. Trade Representative (USTR) Katherine Tai calling for the Biden administration to establish a more comprehensive exclusion process for imports from China subject to tariffs under Section 301 of the Trade Act of 1974 in order to allow more small businesses and manufacturers to access relief.

Following the expiration of the Trump administration’s tariff exclusion process, the Biden administration relaunched an exclusion process in October 2021. However, this process is more narrow in scope and limited to certain products. In their letter, the senators ask the administration to take a more comprehensive approach to ensure that American businesses and manufacturers can receive much needed relief — especially with the challenges imposed by the continuation of the COVID-19 pandemic.

“We write to express our strong support for establishing a comprehensive exclusion process for U.S. manufacturers, producers, and importers to request relief from tariffs placed on products from China pursuant to Section 301 of the Trade Act of 1974,” the senators wrote. “We believe that a comprehensive exclusion process that gives an opportunity for businesses affected by the tariffs to apply for limited, yet renewable, relief is a valuable component of our strategy to counter China’s unfair trade practices. In addition to easing the tariffs’ negative impacts on U.S. businesses, it would also give those businesses additional time and resources to move supply chains out of China and return manufacturing to the United States.”

This letter builds upon an April 2021 letter in which Senators Portman and Carper, along with 38 of their colleagues, requested the administration to restart the tariff exclusion process, following the expiration of the Trump administration’s process. In June of 2021, Portman and Carper authored an amendment to the United States Innovation and Competition Act of 2021 that would require the United States Trade Representative to brief Congress on the findings of a report on the Section 301 exclusion process conducted by the Government Accountability Office (GAO) and detail how USTR is adopting the GAO’s recommendations to improve the process.

In addition to Senators Portman and Carper, the letter was signed by Senators Grassley (R-IA), Kaine (D-VA), Feinstein (D-CA), Young (R-IN), Coons (D-DE), Cassidy (R-LA), Shaheen (D-NH), Boozman (R-AR), Wicker (R-MS), Hoeven (R-ND), Collins (R-ME), Manchin (D-WV), Blunt (R-MO), Lummis (D-WY), Tillis (R-NC), Cornyn (R-TX), Warnock (D-GA), Bennet (D-CO), Graham (R-SC), Van Hollen (D-MD), Warner (D-VA), Fischer (R-NE), Thune (R-ND), Sinema (D-AZ), Hickenlooper (D-CO), Cruz (R-TX), T. Scott (R-SC), Klobuchar (D-MN), Murray (D-WA), Burr (R-ND), Moran (R-KS), Marshall (R-KS), Smith (D-MN), Kelly (D-AZ), Barrasso (R-WY), Risch (R-ID), Blackburn (R-TN), Hagerty (R-TN), and Capito (R-WV).

The full text of the letter can be found here and below.

Dear Ambassador Tai,

We write to express our strong support for establishing a comprehensive exclusion process for U.S. manufacturers, producers, and importers to request relief from tariffs placed on products from China pursuant to Section 301 of the Trade Act of 1974. We appreciate your October announcement of a modified exclusion process. However, we are concerned that the narrow nature of this exclusion process may prevent struggling business and manufacturers from receiving relief that they desperately need, given the continuation of the COVID-19 pandemic. In fact, only one percent of imports under the original exclusion process are eligible for consideration.

We believe that a comprehensive exclusion process that gives an opportunity for businesses affected by the tariffs to apply for limited, yet renewable, relief is a valuable component of our strategy to counter China’s unfair trade practices. In addition to easing the tariffs’ negative impacts on U.S. businesses, it would also give those businesses additional time and resources to move supply chains out of China and return manufacturing to the United States. We believe that restarting a full exclusion process can allow the United States to continue to maintain pressure on China, while providing relief to the economic pain facing businesses and workers across the country. We have all heard from constituents about the impacts of the tariffs and importance of having a chance to apply for a tariff exclusion.

Unfortunately, the current narrow exclusion process denies many a fair shake, and instead picks winners and losers among businesses. Similarly, after exclusions are granted under the current process, importers of those granted exclusions are only eligible for a tariff refund dating back to October 12, 2021, despite their prior exclusions expiring at the start of 2021. In other words, the current refund policy imposes an unnecessary cash crunch on businesses and forces them to pay tariffs for about ten months without reason. For exclusions granted under the current round, we urge you to expand the retroactivity of relief back to the exclusion’s expiration date.

However, retroactivity for those granted exclusions alone will not address the narrowness of the current process. Therefore, we urge you to adopt a full exclusion process that would offer the opportunity for relief to any importer of a tariff line subject to these duties. For exclusions granted under this process, we believe relief must be meaningfully retroactive. And overall, the exclusion process should prioritize transparency, speed, consistency, and fairness. As part of restarting the exclusion process, and to ease the administrative burden of doing so, we suggest presumptively excluding any product for which imports from China represent nearly all imports to the United States. Even years after the Section 301 tariffs were imposed, the exceptional reliance on China for those specific imports suggests that moving these supply chains out of China is uniquely unlikely, and that our efforts to diversify production locales and reshore manufacturing would be better spent on other products.

Thank you for the consideration of our request. We share your desire to combat China’s unfair trade practices, and we remain committed to providing you with the necessary resources to continue to be effective in that goal, including in the administration of an exclusion process.

Sincerely,

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