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June 20, 2022

US textile groups urge continuation of tariffs on China finished goods

US textile groups are urging the Biden Administration to maintain Section 301 penalty tariffs on finished textiles and apparel or risk reversing investment and efforts into nearshoring and US jobs.

By Hannah Abdulla

The National Council of Textile Organisations, The Narrow Fabrics Institute and the United States Industrial Fabrics Institute penned a formal submission to the US Trade Representative’s (USTR) office, which is conducting a four-year statutory review of the tariffs, the associations expressed strong support for the continuation of penalty tariffs on imports from China and warned of the consequences associated with removing the tariffs.

The tariffs were imposed by the US beginning in 2018 in response to China’s continuing IP and related trade violations. China has since failed to comply with an agreement it reached with the United States in 2020.

The coalition states the 301 penalty tariffs are a “logical companion to other important actions” including enforcement of the Uyghur Forced Labor Prevention Act and the current Customs and Border Protection Withhold Release Orders on certain products originating in Xinjiang.

“Given that export-dependent sectors, such as textiles and apparel, are pillar industries in China’s economy, these policies create leverage the US can exert on China to reform its trade and industrial policies,” states the submission.

“A key aspect of [the Biden administration’s trade] policy is the need to maintain Section 301 tariffs, absent substantive improvements in China’s pervasive, predatory trade practices,” the groups said. Lifting the tariffs “would also do nothing to achieve the administration’s goal of easing inflationary pressures, as apparel prices out of China continue to hit rock bottom even with the Section 301 tariffs.

“For decades, China’s illegal actions have undermined virtually every domestic manufacturing sector and contributed to the direct loss of millions of US jobs. These devastating state-sponsored practices include intellectual property theft as well as pervasive state-ownership of manufacturing, industrial subsidies, and abhorrent labour and human rights abuses in the Xinjiang region.

“Cancelling these tariffs would create further unhealthy dependence on Chinese supply chains and embolden future systematic trade abuses as bad actors know that the US will not hold them accountable.

“Noting the administration’s thoughtful approach to this matter, we support a fair, transparent Section 301 exclusion process for items that are not sensitive to US manufacturers and workers and that are not available domestically. As opposed to a broad rollback of 301 penalty duties, targeted exclusions can help boost domestic competitiveness related to input materials and machinery unavailable from other sources and help US manufacturers invest,” the submission added.

Earlier this year, the American Apparel and Footwear Industry joined a letter urging USTR Katherine Tai for a fully transparent review of the Section 301 tariffs on products from China, noting American importers had been assessed close to US$130bn in tariffs since President Trump first imposed tariffs in products from China nearly four years ago.

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