Section 301 Tariffs: Key Updates
This article is a brief summary of changes from the USTR's review of Section 301 tariffs, focusing on industries such as semiconductors, electric vehicles, lithium-ion batteries, medical supplies, and manufacturing equipment.
On September 13, 2024, the Office of the United States Trade Representative (USTR) finalized rules following a four-year review of tariffs imposed on Chinese products under Section 301 of the Trade Act of 1974. After considering over 1,100 public comments on proposed rules from May 2024, the USTR introduced several key modifications across various product categories.
Electric Vehicles and Related Products
Electric bicycles and motorcycles are exempt from the 100% tariff applied to electric vehicles, as they are not classified as "electric vehicles" by the USTR.
Semiconductors and Solar Manufacturing Materials
The tariff on semiconductors will increase to 50% in 2025. This covers 16 subheadings identified in the May 2024 proposal. The USTR is now proposing a 50% tariff on two additional subheadings: 2804.61.00 (high-purity silicon) and 3818.00.00 (chemical elements doped for electronics, including wafers). These materials are crucial for solar cell and semiconductor production. The USTR will soon open a public comment period concerning this change.
Batteries and Related Materials
No additional tariffs will apply to inputs and precursor materials for lithium-ion battery production. However, tariffs on lithium-ion batteries will remain at 25%, with increases planned in 2024 for electric vehicle batteries and 2026 for non-vehicle batteries.
Industrial Materials
The USTR has proposed a tariff increase on tungsten products, covering three subheadings: unwrought tungsten (8101.94.00), tungsten bars and rods (8101.99.10), and other tungsten articles (8101.99.80). Public comments on these changes will be solicited. Tariffs on natural graphite are set to increase to 25% in 2026.
Machinery and Manufacturing Equipment
Five additional subheadings, related to machinery, including water and gas filtration equipment, industrial robots, and printing machinery, have been granted temporary exclusions from tariffs. The USTR has also adopted 14 exclusions for solar manufacturing equipment, covering items used in producing solar wafers and cells. However, exclusions for solar module manufacturing equipment were not adopted. These exclusions solar manufacturing equipment are retroactive to January 1, 2024, and will remain in effect through May 31, 2025.
Heavy Equipment and Infrastructure
Tariffs on ship-to-shore cranes will rise to 25% in 2024, though cranes under contracts signed before May 14, 2024, and entering the U.S. before May 14, 2026, will be excluded from the increase.
Steel and Aluminum
Tariffs on steel and aluminum will rise to 25% in 2024, affecting 321 subheadings. These subheadings cover nearly all steel and aluminum products that are already subject to the Section 232 duties.
Medical Supplies
Tariffs on medical gloves will rise to 50% in 2025 and 100% in 2026, limited to gloves for medical and surgical use. Syringes and needles will face a 100% tariff in 2024, while enteral syringes will be exempt until January 1, 2026, because of anticipated shortages.
For more details concerning these changes, see USTR’s Federal Register Notice.
