Chinese Imports 301 Tariffs
Pursuant to Section 301 of the Trade Act of 1974, President Trump directed the Office of the United States Trade Representative (USTR) to conduct an investigation into China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. On March 22, 2018, President Trump signed a memorandum announcing that the United States would take multiple steps to protect American technology and intellectual property from certain discriminatory and burdensome trade practices by China.
The variable production line of broad parts in low volumes needed by our industry to support vehicle maintenance and repair requires a tremendously complex network of smaller sub-suppliers that does not exist in the U.S. and would be both time and cost prohibitive to replicate. As Congress and the Administration continue to develop a trade strategy with respect to China, they should ensure that American consumers and businesses are not penalized.
As USTR evaluates Section 301 tariff exclusion extensions, we request USTR to grant requests for auto parts that the industry has difficulty sourcing from other countries, for example brake rotors. Additionally, members working to re-source and re-develop supply chains have faced manufacturing challenges in other countries related to capacity issues, quality control, absence of material supply, infrastructure and logistics to product and move product.
The 25% tariff on these goods will create burdensome liquidity problems for American companies, who are already being impacted by the COVID-19 pandemic, and ultimately can only be viewed as a pass-through tax on the cost of auto repair and maintenance.
How This Impacts You
The auto care industry depends on a global supply chain including auto parts that are sourced from or manufactured from China. Tariff exclusions that are not extended will result in an increase in the cost to source or manufacture impacted parts from China.
For product-specific questions
The USTR has published four lists of imports from China that are subject to Section 301 tariffs ranging from 15% to 25%. USTR granted exclusions on certain products but most exclusions are expired. Details for each tariff list can be found in the links below:
On Dec. 13, 2019, USTR announced that the U.S. had reached a phase-one trade agreement with China in areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The agreement also includes China's commitment to purchase U.S. goods and services.
Mar. 23, 2022 UpdateThe United States Trade Representative (USTR) announced the reinstatement of 352 tariff exclusions under the Section 301 investigation on imports from China. The reinstated product exclusions will apply as of Oct. 12, 2021 and extend through Dec. 31, 2022.
The tariff exclusions span across Lists 1-4 and are available for any products that meet the description and scope of the Harmonized Tariff Schedule (HTSUS) subheading within the product exclusion notice.
Some notable auto parts-related exclusions that have been reinstated include:
- 8413.30.9090 – Cooling medium pumps for internal combustion piston engines of the vehicles used to transport people (8703) or goods (8704)
- 8511.40.000 – Starter motors for internal combustion gasoline engines designed for use in automotive and certain other industries
- 8536.50.9065 – Modular light switches, for a voltage not exceeding 1,000 V, presented in polyethylene terephthalate (PET) housings, designed for use with a backplate
- 8543.70.4500 – Position or speed sensors for motor vehicle transmission systems, each valued not over $12
- 8708.50.8500 – Constant velocity axles (half shafts)
- 8708.99.6890 – Front output shafts of SAE 1045 carbon steel suitable for use in automatic transmission systems for passenger motor vehicles
On Oct. 8, 2021, USTR invited public comments on whether to reinstate 549 previously granted and extended exclusions. The exclusion requests were reviewed based on the following factors:
- Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
- Any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry developments.
- The efforts, if any, the importers or U.S. purchasers have undertaken since September 2018 to source the product from the United States or third countries.
- Domestic capacity for producing the product in the United States.
- Whether or not reinstating the exclusion would impact or result in severe economic harm to the commenter or other U.S. interests and overall impact of the exclusions on the goal of obtaining the elimination of China’s acts, policies, and practices covered in the Section 301 investigation.
USTR Tariff Actions and Exclusion Process: List 1, 2, 3 and 4
CBP Section 301 Resources: CSMS Messages, FAQs
Letter from Auto Care to USTR regarding exclusion extensions
Auto Care Association CEO Releases Statement on Signing of Phase One Trade Agreement Between United States, China
USTR U.S.-China Phase-One Agreement Fact Sheet
Auto Care Association Opposes Trump Administration Proposal to Increase Chinese Import Tariffs
Auto Care Association Releases Statement on Temporary Trade Deal between United States, China
USTR Section 301 Resources: Investigation, Report
Auto Care Association Calls on USTR to Adopt Product Exclusion Process for New China Tariffs
Auto Care Association President Bill Hanvey Testifies on Latest Section 301 China Tariffs
Auto Care Association Joins Over 100 Trade Groups Addressing Concerns to Congress on China Tariffs