The United States has taken a significant step in its ongoing trade dispute with China by announcing the implementation of Section 301 tariffs on a wide range of commodity imports. This move, revealed by the Office of the United States Trade Representative on September 13, marks a continuation of the Biden-Harris Administration's efforts to safeguard American workers and businesses from what they perceive as unfair trade practices by China.
The new tariffs, set to come into effect on or before September 27, 2024, will impact a diverse array of commodities. Steel and aluminum products, which have been at the center of trade tensions for years, will see tariffs increase from 0-7.5% to 25%. This substantial hike also applies to lithium-ion batteries for electric vehicles, a sector of growing importance in the global push for clean energy. Additionally, the tariffs cover critical minerals and materials such as manganese, cobalt, chromium, and tungsten ores and concentrates, as well as various forms of tantalum, chromium, and indium.
In a move that underscores the strategic importance of emerging technologies, the USTR has included natural graphite and lithium-ion batteries for non-automotive applications in the tariff list, with these set to take effect from 2026. Perhaps most notably, semiconductors will face a staggering 50% tariff starting in 2025, reflecting the critical role of these components in modern technology and the ongoing global chip shortage.
The decision to implement these tariffs follows a review process that began with proposed modifications announced in May. Ambassador Katherine Tai, in her statement, emphasized that these actions demonstrate the administration's commitment to standing up for American workers and businesses. The USTR has stated that the updates are designed to improve the effectiveness of the tariff actions while considering their overall impact on the US economy.
Beyond the immediate tariff increases, the administration has outlined additional measures to strengthen trade enforcement and protect US interests. One significant proposal involves excluding products covered by Section 301, Section 201, or Section 232 trade enforcement actions from the de minimis exemption. This move aims to close a loophole that some e-commerce platforms and foreign sellers have been using to circumvent existing tariffs.
The administration is also taking steps to improve accountability and enforcement in de minimis shipments. Proposed new rules would require additional data for these shipments, including the 10-digit tariff classification number and information on the person claiming the exemption. These changes are intended to enhance the ability of US Customs and Border Protection to target potentially problematic shipments while facilitating the clearance of lawful ones.
In a related move, the Consumer Product Safety Commission is proposing a final rule that would require importers of consumer products to file Certificates of Compliance electronically at the time of entry, including for de minimis shipments. This regulation aims to prevent foreign companies from using the de minimis exemption to bypass consumer protection testing and certification requirements, thereby strengthening the ability to block unsafe products from entering the US market.
While these administrative actions represent a significant shift in trade policy, the Biden-Harris Administration acknowledges that comprehensive reform of the de minimis system requires congressional action.
