Washington — Any lingering hopes from the auto sector that Trump-era tariffs on Chinese imports would be quickly removed under President Joe Biden were further diminished this month as the administration begins to readjust U.S. trade policies toward China.
During an Oct. 4 speech, U.S. Trade Representative Katherine Tai outlined the Biden administration's next steps in the U.S.-China trade relationship, which includes keeping in place — for now — the Section 301 tariffs levied by the Trump administration on more than $350 billion worth of Chinese goods.
The prolonged tariff reality means parts makers are once again evaluating their supply chains and strategizing ways to mitigate any impact. But a sliver of hope remains as the administration considers reinstating a targeted tariff exclusion process for imports from China, and companies see a potential opening for negotiations, trade experts say.
The Office of the U.S. Trade Representative is seeking public comments through Dec. 1 on whether it should restore previously extended exclusions on 549 import product categories, including some auto parts. Most of those exclusions expired last year.
"It's a good start, and companies are hopeful that it is just a start," said Mark Tallo, a member of the import and export practice group at Sandler, Travis & Rosenberg's Washington, D.C., office. The firm represents companies at various levels of the automotive supply chain.
The exclusions cover a wide range of products, including items with plastics, for everything from medical products to air horn trumpets and wet wipe containers.
Another expectation, Tallo said, is that this will be the start of a broader process to look at more product exclusions that were granted by the previous administration and open a new process to request exclusions for other products.
"The hope is that under the Biden administration the exclusion process will be a little more transparent, and you will get a better understanding as to why products are excluded and others are not," he told Automotive News.
In her remarks, Tai said she will "keep open the potential for additional exclusion processes, as warranted" — a source of optimism for groups such as the Motor & Equipment Manufacturers Association, which continues to urge the Biden administration to open an exclusion process for a broader range of products.
"That doesn't automatically mean that no tariffs will be paid, but it allows manufacturers and importers to make the case of why there should be an exclusion on a specific product," said Ann Wilson, MEMA's senior vice president of government affairs.
While the association welcomes the re-energized efforts to confront Beijing over its trade practices, treatment of intellectual property and other concerns, the list of 549 exclusions being considered "does not include the wide range of motor vehicle goods that are subject to the tariffs," Wilson said.
"We think that tariffs are a tool, but they should not be seen as the only tool to address American competitiveness," she said.
The US-China Business Council, a private nonprofit group made up of more than 200 American companies that do business with China, including General Motors and Ford Motor Co., also said it would prefer a broadening of tariff exclusions that includes more imported auto parts.
GM CEO Mary Barra is vice chairman of the council's board of directors.
"Our members want the tariffs lifted," Doug Barry, a spokesman for the council, said in a statement to Automotive News. "We understand the administration's need for leverage … but believe tariffs don't provide much, if any. Instead, they are a tax on U.S. businesses and consumers that, if ended, would be a boost for the economy."