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               Research Servi






Section 301 Tariffs on Goods from China:

International and Domestic Legal Challenges



November 13, 2020
In August 2017, the Office of the U.S. Trade Representative (USTR) initiated an investigation under
Section 301 of the Trade Act of 1974, into several allegedly unreasonable or discriminatory trade
practices carried out by the People's Republic of China (China). On March 22, 2018, the Trump
Administration issued a report finding that several of these practices were unreasonable or discriminatory
and burdened U.S. commerce. Following this announcement, the Administration imposed additional
tariffs on a variety of imported goods from China. These tariffs, imposed in four stages between 2018 and
2019, have been challenged by China and numerous U.S.-based importers in international and domestic
legal fora. This Sidebar analyzes the litigation at the World Trade Organization (WTO) and before the
U.S. Court of International Trade (CIT).

Background

On August 24, 2017, USTR announced an investigation into whether acts, policies, and practices of the
Government  of China related to technology transfer, intellectual property, and innovation are actionable
under authorities delegated to the President in Sections 301 through 310 of the Trade Act of 1974, often
referred to as Section 301. On March 22, 2018, USTR issued a report finding that four such practices or
policies justified action under Section 301: (1) China's forced technology transfer requirements;
(2) cyber-enabled actions to acquire U.S. IP and trade secrets illegally; (3) discriminatory and nonmarket
licensing practices; and (4) state-funded strategic acquisition of U.S. assets. (For more information on the
Section 301 report and subsequent actions, see this CRS Report and In Focus.)
After USTR issued its report on the outcome of its Section 301 investigation, it determined that imposing
tariffs on approximately $50 billion worth of U.S. imports from China was an appropriate response, as
well as filing a dispute with the WTO about China's technology licensing practices. On June 20, 2018,
USTR  issued a list of products covered by the first round of tariffs (List 1), with an annual trade value of
approximately $34 billion. The Notice of the action indicated the U.S. Government had reviewed the
extent to which the tariff subheadings . . . include products containing industrially significant technology
to tailor the tariffs to those products affected by the practices identified during the Section 301
investigation. USTR issued a second list of products (List 2), covering approximately $16 billion worth of
imports, on August 16, 2018. The Notice of the second action indicated this amount was identified to

                                                                 Congressional Research Service
                                                                   https://crsreports.congress. gov
                                                                                      LSB10553

CRS Legai Sidebar
Prepared for Members and
Commi :tees o Congress ----------------------------------------------------------------- ----------

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