SOCMA Engages USTR on 301 Tariffs

February 14, 2022

Written by Robert F. Helminiak, VP, Legal & Government Relations, SOCMA

SOCMA recently submitted a formal letter to United States Trade Representative (USTR), Ambassador Katherine Tai, requesting a meeting on the 301 China Tariffs. The purpose of the meeting is not only to urge USTR to reopen the exclusion process for chemicals imported from China, but to educate and inform USTR on the concerns and impacts of the tariffs on the specialty chemicals industry.

Currently, tariffs under Section 301 directly apply a 25% tax to many inputs and raw materials that SOCMA member companies import from China. In many cases, these products are not available domestically or from countries other than China. The application of the 25% tariffs on products not competitively available outside of China has a compounding effect on the U.S. economy and hinders the production and growth of specialty chemical companies and the industry as a whole.

Section 301 China Tariffs were implemented in 2018 and 2019, with an initial period in which companies could apply for an exclusion. Unfortunately, the criteria for earning an exclusion was not clearly stated, and the response from USTR was in letter form, communicating to applicants whether USTR granted or declined an exclusion. There was no transparency in the process, leaving applicants without a clear understanding of the reasons for which an exclusion was denied.

The Biden Administration did reopen the exclusion process in 2021 for a very limited number of products. More importantly, though, USTR has clearly articulated criteria for granting an exclusion, which SOCMA considers a win for the specialty chemicals industry and will continue to advocate for increased transparencies and consistent processes and procedures on all tariff exclusion applications.

Next steps include the reopening of the exclusion process more broadly.

Furthermore, SOCMA is also requesting support of USTR in amending USMCA implementing legislation to allow duty drawback for 301 surtaxes. SOCMA members are at a severe disadvantage for exports to Mexico and Canada, as foreign competitors do not have the 25% surcharge included in such raw materials costs. SOCMA is seeking unilateral change and implementing legislation to resolve this trade imbalance.

Learn more and seek guidance for your company on Section 301 China Tariffs by contacting SOCMA’s Government Relations experts Robert Helminiak, and Genevieve Strand,

View SOCMA’s letter to USTR here.

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