Legislation + Regulation, Lighting Industry

USTR Releases Four-year Review of Section 301 Tariffs


By Michael Weems, VP of Public Policy, American Lighting Association

 What You Need to Know:

 Increased prices, as a result of the Section 301 tariffs on product coming from China, are here to stay and new tariffs are on the way. The Office of the United States Trade Representative (USTR) recently released the long-awaited statutory four-year review of the Section 301 tariffs on products coming from China. Instead of announcing the rollback of the tariffs, originally put in place during the Trump administration, the report recommends that the tariffs remain, citing a need to continue to hold China accountable for improper technology transfer related acts.

Additionally, USTR says that China’s actions have burdened commerce in the United States. To address this issue, USTR will consider adding or increasing tariffs on 14 specific product categories, some of which could impact the lighting industry.

A recently revised interpretation regarding ceiling fan downrods moves these products from their long affiliated HTS code of 8414.90.10 to 7306.30.50. This change is significant as the new tariff code falls under one of the 14 categories being proposed for modification. If the proposal is finalized, downrods will have an additional tariff rate of 25 percent beginning later this year. To be clear, this only impacts downrods imported separately from ceiling fans. ALA will submit comments in opposition to the increased tariff on downrods.

Recommendations from the report:

  1. Establish an exclusion process targeting machinery used in domestic manufacturing, including proposals for 19 exclusions for certain solar manufacturing equipment.
  2. Allocate additional funds to United States Customs and Border Protection for greater enforcement of Section 301 actions.
  3. Increase collaboration and cooperation between private companies and government authorities to combat state-sponsored technology theft.
  4. Continue to assess approaches to support diversification of supply chains to enhance our own supply chain resilience.

Additional resources:

Read the USTR Report.

Read the Federal Register Notice and the full list of affected HTS codes.

Read the White House Fact Sheet.

A few noteworthy items:

The report did not address the existing tariff exclusions that are set to expire at the end of May. The report also did not address the potential for reviving a broader exclusion program. However, information from USTR is expected in the coming days and weeks.

USTR Katherine Tai does not believe this move is inflationary. Furthermore, Tai dismissed the idea that keeping the current tariffs and adding or increasing the additional tariffs will increase prices on consumers.

Next steps:

USTR has set up a 30-day comment period for stakeholders to provide comments on the proposed modifications. The comment period will open on May 29 and close on June 28. There is no public hearing for stakeholders. As far as effective dates, USTR is proposing that increases in 2024 become effective Aug. 1, 2024, and that increases in 2025 and 2026 become effective Jan. 1 of the corresponding year.



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