U.S. Announces Tariff Hikes on Critical Sectors, Tightens De Minimis Exemption
On September 13, 2024, the U.S. Trade Representative (USTR) announced the completion of the statutory review for the Section 301 investigation into China’s trade practices regarding technology transfer, intellectual property, and innovation. This review, which began in May 2022, includes new tariffs on a range of Chinese imports, particularly targeting strategic industries. Key sectors affected include lithium-ion batteries, electric vehicles, solar energy, steel and aluminum, semiconductors, and medical equipment.
The finalized tariffs will affect a variety of products under the Harmonized Tariff Schedule. For critical minerals like aluminum, chromium, cobalt ores, and other rare metals, the tariff rate will rise to 25% in 2024. Tariff increases for other products, such as steel, aluminum, and electric vehicle batteries, are also planned, with some rates reaching 100% by 2026.
Among the significant changes, USTR will impose higher tariffs on medical products such as face masks, medical gloves, and needle syringes, with rates increasing over the next few years. For example, tariffs on face masks will reach 50% by 2026, while duties on medical gloves and syringes will rise to 100% in the same period.
USTR also included temporary tariff exclusions for specific machinery and solar manufacturing equipment, with the machinery exclusion process set to begin soon.
Proposed Rulemaking on De Minimis Exemption Announced
In a related development, the Biden administration has outlined new measures aimed at tightening the rules for de minimis shipments. These measures would exclude products covered by tariffs under Sections 201, 301, or 232 from the de minimis exemption, which currently allows for duty-free entry of low-value shipments. The proposed changes are expected to enhance oversight by requiring additional data collection and improve the screening of de minimis shipments.
Further requirements will include filing Consumer Product Safety Commission (CPSC) testing certificates or General Certificates of Conformity (GCCs) at the time of entry, which is currently only done upon request. This move is intended to prevent unsafe or unfairly traded products from entering the U.S. market under the de minimis threshold.
These actions are part of the broader strategy by the Biden administration to protect U.S. consumers, workers, and businesses from unfair trade practices and competition.
