Three years after the U.S. placed 25% tariffs on $300 billion in Chinese goods, including fasteners, importers and customers continue to pay more for products, with no relief in sight.

In 2018, the Trump administration placed 10% tariffs on bolts, screws and other fasteners (HTS subheadings 7318.11.00 to 7318.29.00) manufactured in China and on all Chinese iron and steel nuts (HTS subheading 7318.16.00).  Those tariffs were hiked to 25% the following year.

The tariffs include 25% duties on bolts, screws and other fasteners (HTS subheadings 7318.11.00 to 7318.29.00) manufactured in China and 15% on all Chinese iron and steel nuts (HTS subheading 7318.16.00).

The tariffs were issued under Section 301 of the Trade Act of 1974, which allows the White House to fight foreign trade policy it deems “unreasonable or discriminatory and burdens or restricts United States commerce.”

China retaliated with matching tariffs on an equal amount of U.S. goods, embracing the largest trade war with the West in decades.

In 2020, the World Trade Organization (WTO) ruled the tariffs violate international trade regulations and urged the U.S. to rescind the measures.

Yet as the world prepares to welcome 2022 in the coming weeks, the tariffs remain in place, embraced by President Joe Biden as “leverage” over China’s unfair trade practices.

While the tariffs led to higher commercial and retail prices, that burden seemed more bearable in previous years when a strong U.S. economy faced few headwinds.  But the pandemic prompted supply shortages and shipping delays that hiked prices further,  adding additional costs amid the logistical nightmare.

While governments around the world continue to grapple with Covid-19, litigation to end the U.S. duties on Chinese goods is making its way through the courts.

The primary front against the tariffs is the current suit challenging Lists 3 and 4A of the Section 301 Duties on goods from China in the Court of International Trade (CIT), according to the Braumiller Law Group.  The suit claims the duties were enacted illegally, violating the timing requirements and purpose of The Trade Act of 1974. 

However, if the litigation succeeds, importers will only have relief from List 3 and 4A, and will be obligated to pay the additional duties in the interim. 

Likewise, tariff relief efforts continue in Congress, where a bill that would modify the Section 301 exclusion process awaits House approval after the Senate passed the measure.  As part of the greater U.S. Innovation and Competition Act of 2021 (USICA), the Trade Act of 2021 contains provisions that would impose a statutory timeframe on the USTR, audits of the exclusion process, and reinstitution of all expired exclusions that would extend for up to 18 months and apply retroactively during the gap period. 

“Ultimately, the Act would be beneficial to importers in that it would reinstate the exclusion process and create a more structured and less arbitrary systems of handling the exclusions and their potential extensions,” writes Adrienne Braumiller, partner and founder of the Braumiller Law Group.

Some members of the House Ways and Means Trade Subcommittee, including Representative Earl Blumenauer, reportedly are willing to work with the USTR to improve the exclusion process in lieu of imposing strict statutory requirements.

In October, U.S. Trade Representative Katherine Tai announced that her office would restart the targeted tariff exclusions process to lower the increased cost on Americans resulting from the tariffs.  Currently the USTR is reviewing comments on the possible reinstatement of 549 Exclusions. 

“Although the USICA would uniformly reinstate the avenue for expired exclusions, with retroactive application, it is uncertain the proposed legislation will pass in its current form, and the ongoing comment process is a proactive opportunity for importers to participate in the potential reinstatement of Section 301 tariff exclusions,” writes Braumiller.

 

The Office of the U.S. Trade Representative (USTR) list includes:
7318.11.00 – Iron or steel, coach screws
7318.12.00 – Iron or steel, wood screws (o/than coach screws)
7318.13.00 – Iron or steel, screw hooks and screw rings
7318.14.10 – Iron or steel, self-tapping screws, w/shanks or threads less than 6 mm in diameter
7318.14.50 – Iron or steel, self-tapping screws, w/shanks or threads 6 mm or more in diameter
7318.15.20 – Iron or steel, bolts and bolts & their nuts or washers, imported in the same shipment
7318.15.40 – Iron or steel, machine screws (o/than cap screws), 9.5 mm or more in length and 3.2 mm in diameter
7318.15.50 – Iron or steel, threaded studs
7318.15.60 – Iron or steel, screws and bolts, nesoi, having shanks or threads less than 6 mm in diameter
7318.15.80 – Iron or steel, screws and bolts, nesoi, having shanks or threads 6 mm or more in diameter
7318.19.00 – Iron or steel, threaded articles similar to screws, bolts, nuts, coach screws & screw hooks, nesoi
7318.21.00 – Iron or steel, spring washers and other lock washers
7318.22.00 – Iron or steel, washers (o/than spring washers and other lock washers)
7318.23.00 – Iron or steel, rivets
7318.24.00 – Iron or steel, cotters and cotter pins
7318.29.00 – Iron or steel, nonthreaded articles similar to rivets, cotters, cotter pins, washers and spring washers