USCBC Comments on Proposed Modifications and Machinery Exclusion Process in the Section 301 Investigation

US-China Business Council Comments on Proposed Modifications and Machinery Exclusion Process in the Section 301 Investigation: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation 

Docket ID: USTR-2024-0007

June 28, 2024

The US-China Business Council (USCBC) represents over 270 American companies engaged in business across multiple industries in China. USCBC welcomes the opportunity to submit comments on the proposed tariff modifications and machinery exclusion process in the US Trade Representative’s (USTR) Section 301 Investigation into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.

As noted in our previous submission, USCBC believes the US government and private sector entities should work to ensure that China makes market-based decisions on technology transfer and does not infringe on US intellectual property (IP) rights. Our organization continues to advocate for more progress on these and other issues impacting US companies competing in China and worldwide. However, the Section 301 tariffs have not succeeded in changing China’s market practices, so it is unclear how continuing such tariffs will eventually accomplish that goal. This is why USCBC is generally disappointed with the results of USTR’s four-year review, as tariffs ultimately make it harder for American companies to compete in the US and abroad, cost American jobs, increase consumer prices during ongoing inflation, and invite Chinese retaliation.

USCBC generally supports efforts by the US government and companies to address the issues identified in the 301 report and applauds the Biden administration’s efforts to boost American manufacturing and achieve greater supply chain resiliency. We recognize the challenges China’s overcapacity in critical sectors poses to these efforts, not to mention the corresponding challenges for the US economy, companies, and workers. We have stressed the importance of rebalancing China’s economy to the country’s top leaders and support the Biden administration’s efforts to engage China to address overcapacity and other important issues. Likewise, we encourage the administration to continue to prioritize working with international partners to address global overcapacity challenges.

USCBC applauds USTR for extending 164 existing Section 301 tariff exclusions, proposing opening a tariff exclusion process for machinery used in domestic manufacturing and proposing excluding certain solar manufacturing equipment from Section 301 tariffs. As noted in our previous comments to USTR, Section 301 tariffs have sometimes prevented companies from increasing manufacturing in the United States. The proposed exclusions are a step in the right direction, but more can be done to encourage domestic manufacturing.

We believe that as the administration addresses challenges stemming from China’s trade and economic practices, any tariffs maintained or assessed in response to these challenges must be targeted and designed to modify China’s behavior. We are also disappointed by the lack of tariff relief for certain consumer goods and the unexplained exclusion of certain manufacturing inputs from eligibility for consideration under the proposed exclusion process.

USCBC is committed to being a constructive partner with the administration. In this submission, USCBC will (1) address the need to eliminate tariffs on consumer goods and (2) offer suggestions for the proposed tariff exclusion process.

See our full submission: 

USCBC Comments on Proposed Modifications and Machinery Exclusion Process in the Section 301 Investigation