August 12, 2022
SOCMA Statement on USTR Court Brief and 301 Exclusions
Arlington, VA – The Society of Chemical Manufacturers and Affiliates (SOCMA) Vice President, Legal and Government Relations, Robert F. Helminiak released a statement today explaining that the Office of the United States Trade Representative (USTR) does not have an adequate exemption or exclusion process for Section 301 China Tariffs. Further, the agency’s citation of SOCMA testimony as evidence of a sufficient process is erroneous, as USTR did not follow the guidance provided by SOCMA in testimony and public comments.
“SOCMA and our member companies are concerned that USTR does not properly understand the impacts of the Section 301 China tariffs on the specialty chemical industry supply chain, and has not properly considered the testimony, comments and educational efforts of SOCMA. Many of the raw materials and chemical inputs subject to the tariffs are not available in sufficient quantity outside of China, giving manufacturers no alternative sourcing and putting US specialty chemical manufacturing at a global disadvantage.
When the initial 301 Tariff Lists were developed, USTR did not state clear criteria for exempting products from 301 Tariff Lists and did not state clear criteria for granting exclusions. Furthermore, USTR did not provide any explanation or insight into declined exclusion requests, only sending applicants form letters containing no rationale.
SOCMA strongly urges USTR to reopen the exclusion process to all chemical products on all 301 Tariff Lists consistent with the October 2021 criteria, in which USTR stated it would consider “[w]hether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.”
USTR filed a Remand Determination (Further Explanation of the Final List 3 and Final List 4 Modifications in the Section 301 Action) last week in response to the Court of International Trade’s Remand Order in In re Section 301 Cases. USTR’s Remand Determination cited SOCMA testimony concerning the availability of certain specialty chemicals outside of China, but failed to note that USTR did not follow SOCMA’s broader recommendations, that USTR either exempt from the initial listing or grant exclusions for all chemicals unavailable in sufficient quantity outside of China.
USTR’s Remand Determination indicates that a significant factor in deciding whether to remove a particular chemical from List 3 tariffs was whether China accounted for 90% or more of U.S. imports of that chemical. The 90% mark was not referenced previously by USTR, and was not specified as the criteria for winning an exemption or exclusion.
SOCMA does not believe USTR’s arbitrary designation of 90% manufactured in China should be the line of delineation for granting an exclusion or an exemption from Section 301 tariffs. Instead, USTR should apply the criteria established in October 2021, which is very similar to the Miscellaneous Tariff Bill criteria stating if there is not a sufficient or competitively priced quantity of a chemical product outside of China, then an exclusion should be granted for that product.
Solely dedicated to the specialty and fine chemical industry, SOCMA focuses on building commercial connections, supporting manufacturing and operations, and advocating for regulatory and legislative policies. www.socma.org