Source: Federal Register. Summary and analysis by S2V Advisory.
What happened
The Office of the U.S. Trade Representative published a notice in the Federal Register on October 7 confirming that the two original Section 301 tariff actions on Chinese goods remain in effect. The actions took effect on July 6 and August 23, 2018. Under the Trade Act they were due to terminate on July 6 and August 23 of this year unless domestic industries that benefit from them asked for them to continue. USTR had invited those requests in a May 6 notice.
According to the notice, USTR received 68 requests from domestic producers and 18 from trade associations for the July action, and 57 and 19 for the August action. The requesters said the tariffs continue to address unfair competition and support domestic production and investment. USTR determined the actions did not terminate. It will now conduct a second statutory four-year review, covering the effectiveness of the tariffs, alternative measures and their effect on the U.S. economy, including consumers, with a separate notice to set out the comment process.
What it means for buyers
These tariffs have now outlasted two administrations and one full review cycle. Any sourcing plan that still treats them as temporary is carrying a hidden assumption.
- Price China-origin supply at the tariff-inclusive rate for the life of the contract. Build the current duty into total cost of ownership and into any make-versus-buy or nearshoring comparison. If relief comes, it is upside.
- Check which exclusions you rely on. Exclusions are granted and extended on their own schedules, separate from the underlying action. Know the expiry date of each one and what the landed cost becomes without it.
- Confirm who pays. Many contracts written in 2018 and 2019 were silent on tariffs, and the cost settled wherever the invoicing landed. Renewals are the moment to make the allocation explicit.
- Prepare a comment. The second review will ask about effects on the U.S. economy and on consumers. Buyers with hard numbers on cost, substitution and availability are the evidence that review needs, and that evidence takes time to assemble.
Durable tariffs change the sourcing question from how to wait them out to how to design around them. See our strategic sourcing service.