The Office of the United States Trade Representative (USTR) recently announced that the U.S. is set to increase tariffs on a range of Chinese imports through phased hikes over the next several years. Starting September 27, 2024, tariffs on electric vehicles, EV batteries, solar cells, needles, syringes, face masks, critical minerals, and steel and aluminum will rise. Additional increases under Section 301 are planned for January 1, 2025, and January 1, 2026. These actions represent part of the U.S.’s ongoing strategy to reduce its reliance on Chinese imports.
ADJUSTMENTS TO THE INITIAL TARIFF PROPOSAL
USTR has made several changes to the initial tariff proposal from May. One notable adjustment is the doubling of tariffs on syringes from 50% to 100%, while enteral syringes are now excluded. USTR also granted an exemption for ship-to-shore cranes ordered before May 14, 2024.
Most tariff hikes will target Chinese goods the Biden administration considers crucial to national interests. However, certain industrial machines remain excluded, allowing U.S. importers to avoid Section 301 tariffs.
EXEMPTIONS FOR SOLAR CELL AND WAFER EQUIPMENT
A significant aspect of the new tariff measures includes the exemption for solar cell and wafer manufacturing equipment. These exemptions, retroactive to January 1, 2024, will last through May 31, 2025. The move aims to reduce costs for domestic renewable energy manufacturers importing essential machinery. Despite these exemptions, USTR removed five categories of solar module manufacturing equipment, citing the availability of alternative sources within the U.S. and Europe. The excluded equipment involves machinery for framing, soldering, module handling, and encapsulation.
HIGHER TARIFFS ON MEDICAL SUPPLIES
Medical supplies, including syringes, needles, and surgical gloves, face significant tariff increases. USTR raised the tariff on Chinese syringes and needles to 100%, effective September 27, 2024, following public feedback. Surgical gloves will see tariffs rise to 50% in 2025 and 100% in 2026.
Disposable textile face masks will also face a 25% tariff in 2025, which will increase to 50% in 2026 unless policy changes occur under a future administration. These measures aim to stimulate domestic production of critical medical supplies.
PUBLIC FEEDBACK ON TARIFF CHANGES
USTR received over 1,100 public comments on the Section 301 tariff adjustments. Of these, 420 comments addressed the proposed tariff hikes, while 656 focused on the exclusion of specific industrial machines. An additional 80 comments related to exemptions for solar panel manufacturing equipment.
The government also added five industrial machines, such as water and liquid purification devices, to the exclusion list. These machines, listed under specific Harmonized Tariff Schedule (HTS) codes, qualify for tariff exemptions. Importers must submit requests for exclusions, while domestic manufacturers may challenge these requests.
INDUSTRY CRITICISM OF TARIFF IMPACT
Despite the rising tariffs, some industry groups voiced concerns, arguing that the non-market practices these tariffs target have largely remained unchanged over the past six years. Nevertheless, the U.S. government continues to impose these trade measures to reduce dependency on Chinese goods and encourage domestic manufacturing growth.
ADDITIONAL TARIFFS PROPOSED
USTR plans to solicit public input on more potential tariff hikes. These proposals include increases on tungsten products and chemicals used in semiconductor production. Tungsten, silicon, and doped chemicals may face tariffs as high as 50%. The U.S. government remains focused on restricting imports of strategically significant materials from China while promoting domestic and international alternatives.
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