As the House and Senate prepare to reconcile the differences between their two China competition bills (United States Innovation and Competition Act and the America COMPETES Act, respectively), Sen. Pat Toomey (R‑PA) is attempting to reform and restart the exclusion process from the Section 301 China tariffs, which lapsed at the end of 2020. Perhaps unsurprisingly, certain protectionist organizations are decrying any tariff relief at all.
As I argued recently, the United States should completely eliminate the China tariffs. Policymakers are increasingly aware that the Trump administration’s tariffs have utterly failed to change Beijing’s legitimately concerning trade and investment behavior and have hurt American firms and families. Despite this acknowledgement, policymakers still seem loathe to remove the tariffs wholesale.
If the United States is not going to remove the tariffs entirely, policymakers should at least provide for a reformed—orderly and transparent—tariff exclusion process as Sen. Toomey is attempting to establish through the conference committee process for current and future Section 301 tariffs. The reality is that the overwhelming majority of the products granted exemptions from the tariffs cannot be sourced from countries other than China—or produced domestically—and/or are in no way related to national security or broader strategic interests. A sample of excluded products include:
- Breast pumps;
- Watercraft steering wheels;
- HVAC thermostats;
- Tabletop water fountains;
- Bagless, upright vacuum cleaners;
- Freeze-dried and sliced bananas, apples and peaches;
- Tiki torches;
- Vulcanized rubber tracks designed for use in construction equipment;
Tariff relief can help those companies and workers struggling with the supply chain crunch (and ultimately American consumers).
To be clear, not all was well with the Trump administration’s tariff exclusion processes. ProPublica ably documented the trade war rent-seeking abuses that enriched well-connected lobbyists over the last several years. Meanwhile, the Government Accountability Office chided the U.S. Commerce Department’s handling of steel and aluminum tariff exclusion requests and provided recommendations to the U.S. Trade Representative for ways to improve the China tariff exclusion process. Reform of the process should accompany restarting it. But ultimately any relief is better than the status quo.
Protectionists routinely accuse free traders of being impractical “fundamentalists,” but even the Trump administration acknowledged a need for the exclusion system that anti-trade groups now oppose. It’s enough to make you wonder who the real “fundamentalists” are.
