Trump’s Tariff, Round 2? (Part 3)
Now let us rewind to see Trump’s tariffs in his first term and during the Biden Administration.
RECENT TARIFF HISTORY
While talk of tariffs is receiving a lot of media attention, it is important to temper your expectations. The best way to do this is to look at recent examples of Section 301 and Section 232 tariffs, and the processes these went through. Specifically, these laws were used by the previous Trump Administration and by the Biden Administration to impose tariffs. The examples set by these administrations can provide useful insight into what we can expect from the incoming Trump Administration.
The First Trump Administration
The previous Trump Administration undertook a marked shift in U.S. trade policy, using Section 301. Previously, the law had primarily been used to conduct dispute resolution at the World Trade Organization. While self-help was codified in Section 301, it was rarely used. But on August 24, 2017, the USTR began an investigation into China’s practice surrounding intellectual property rights. The USTR determined that China’s practices were an unreasonable burden on U.S. Commerce. As a result, in July and August, 2018 the USTR applied tariffs under Section 301 to certain goods from China, at a rate of 7.5–25%.
In 2019 and 2020, the USTR also took aim at the European Union (“EU”), France, Vietnam, as well as a host of countries implementing Foreign Digital Service Taxes (“FDST”). In the case of FDST, France and the EU, tariffs between 15–25% were imposed under Section 301, but enforcement was suspended. These tariffs were ultimately short lived, because the offending countries reached various compromises with the United States. In the case of Vietnam, two separate Section 301 investigations were initiated, but no action was taken, because Vietnam agreed to compromise before action was taken.
The previous Trump Administration also imposed duties under Section 232. On April 21, 2017 the Secretary of Commerce opened a docket for public notice and comment regarding an investigation on steel. On January 11, 2018, the Secretary of Commerce found that imports of steel were harming national security. Then-President Trump concurred, and on March 8, 2018, ordered the imposition of a 25% tariff on steel imports to the United States, except from Mexico and Canada. The Trump administration took almost identical action under Section 232 regarding aluminum imports.
The Biden Administration
Under the Biden Administration, Section 301 tariffs placed on China by the previous administration have been extended, and expanded.
In May of 2022, the Biden USTR conducted the four year review, required by statute, of the China Section 301 tariffs. The Biden USTR extended the tariffs, which are still in effect to this day. In addition to extending Section 301 tariffs, the Biden Administration announced an increase to them on May 14, 2024; the tariffs on Steel and Aluminum, batteries, ship-to-shore cranes, surgical masks, and gloves were increased to 25%; the tariffs on syringes and solar cells were increased to 50%; the tariff on electric vehicles was increased to 100%.
Regarding Section 232, the Biden Administration has neither applied new tariffs, nor has it terminated the tariffs on steel and aluminum imposed by the Trump Administration.
The discussion will continue in Part 4.