Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Changes from November 16, 2020 to December 14, 2020

This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with ~~red strikethrough~~ and textual matter added in the later version is indicated with blue.

Section 301 of the Trade Act of 1974: Origin,
~~November 16~~December 14, 2020 , 2020
Evolution, and Use
Andres B. Schwarzenberg
Section 301 of the Trade Act of 1974 grants the Office of the United States Trade Representative Section 301 of the Trade Act of 1974 grants the Office of the United States Trade Representative
Analyst in International Analyst in International
(USTR) a range of responsibilities and authorities to investigate and take action to enforce U.S. (USTR) a range of responsibilities and authorities to investigate and take action to enforce U.S.
Trade and Finance Trade and Finance
rights under trade agreements and respond to certain foreign trade practices. From the conclusion rights under trade agreements and respond to certain foreign trade practices. From the conclusion

of the Uruguay Round of multilateral trade negotiations in 1994, which resulted in the of the Uruguay Round of multilateral trade negotiations in 1994, which resulted in the
establishment of the World Trade Organization (WTO) in 1995, until the start of the Trump establishment of the World Trade Organization (WTO) in 1995, until the start of the Trump

Administration, the United States used Section 301 authorities primarily to build cases and Administration, the United States used Section 301 authorities primarily to build cases and
pursue dispute settlement at the WTO. The Trump Administration has shown more willingness to go outside of the WTO to pursue dispute settlement at the WTO. The Trump Administration has shown more willingness to go outside of the WTO to
act unilaterally under these authorities to promote what the Administration touts as “free,” “fair,” and “reciprocal” trade. The act unilaterally under these authorities to promote what the Administration touts as “free,” “fair,” and “reciprocal” trade. The
Trump Administration’s use of Section 301 to impose tariffs as punitive measures has been the subject of congressional and Trump Administration’s use of Section 301 to impose tariffs as punitive measures has been the subject of congressional and
broader international debate, and some in Congress have raised a number of questions regarding USTR’s actions, including broader international debate, and some in Congress have raised a number of questions regarding USTR’s actions, including
the scope of USTR’s authorities, the types of trade actions allowed, and the tariff exclusion process. the scope of USTR’s authorities, the types of trade actions allowed, and the tariff exclusion process.
The Trump Administration has attributed its use of Section 301 to impose tariffs as punitive measures to its determination to The Trump Administration has attributed its use of Section 301 to impose tariffs as punitive measures to its determination to
close a large and persistent gap between U.S. and foreign government practices that it says may disadvantage or discriminate close a large and persistent gap between U.S. and foreign government practices that it says may disadvantage or discriminate
against U.S. exports, firms, and workers. In addition, the Administration has justified many of its recent tariff actions—against U.S. exports, firms, and workers. In addition, the Administration has justified many of its recent tariff actions—
particularly those against China—by pointing to alleged weaknesses in WTO dispute settlement procedures and the particularly those against China—by pointing to alleged weaknesses in WTO dispute settlement procedures and the
inadequacy or nonexistence of WTO rules to address certain Chinese and other trade practices. It has also cited what it terms inadequacy or nonexistence of WTO rules to address certain Chinese and other trade practices. It has also cited what it terms
as the failure of past trade negotiations and agreements to enhance reciprocal market access for U.S. firms and workers. as the failure of past trade negotiations and agreements to enhance reciprocal market access for U.S. firms and workers.
While some Members of Congress have applauded the Trump Administration’s Section 301 actions or called for more active While some Members of Congress have applauded the Trump Administration’s Section 301 actions or called for more active
use of trade authorities, others have decried unilateral trade sanctions under Section 301 as an undesirable shift in U.S. trade use of trade authorities, others have decried unilateral trade sanctions under Section 301 as an undesirable shift in U.S. trade
policy that could undermine the multilateral trading system. policy that could undermine the multilateral trading system.
The creation of an enforceable dispute settlement mechanism in the WTO, strongly advocated by the United States, The creation of an enforceable dispute settlement mechanism in the WTO, strongly advocated by the United States,
significantly reduced U.S. use of Section 301. There have been 130 cases under Section 301 since the law’s enactment in significantly reduced U.S. use of Section 301. There have been 130 cases under Section 301 since the law’s enactment in
1974, of which 35 have been initiated since the WTO’s establishment in 1995. Historically, Section 301 cases have targeted 1974, of which 35 have been initiated since the WTO’s establishment in 1995. Historically, Section 301 cases have targeted
primarily the European Union (EU), which accounts for about 30% of all cases—concerning mostly agricultural trade. Prior primarily the European Union (EU), which accounts for about 30% of all cases—concerning mostly agricultural trade. Prior
to 2017, that is, the start of the Trump Administration, the last Section 301 investigation took place in 2013 and involved to 2017, that is, the start of the Trump Administration, the last Section 301 investigation took place in 2013 and involved
Ukraine’s practices regarding intellectual property rights (IPR). The last case that resulted in retaliation (e.g., the imposition Ukraine’s practices regarding intellectual property rights (IPR). The last case that resulted in retaliation (e.g., the imposition
of tariffs) took place in 2009 and involved Canada’s compliance with the 2006 U.S.-Canada Softwood Lumber Agreement. of tariffs) took place in 2009 and involved Canada’s compliance with the 2006 U.S.-Canada Softwood Lumber Agreement.
During the Trump Administration, the USTR has initiated six new investigations against China, the EU, France, a group of During the Trump Administration, the USTR has initiated six new investigations against China, the EU, France, a group of
10 trading partners, and two against Vietnam. 10 trading partners, and two against Vietnam.
The more active use of congressionally delegated trade authorities by the Trump Administration has prompted some The more active use of congressionally delegated trade authorities by the Trump Administration has prompted some
Members of Congress to consider amending Section 301. Congress could require greater consultation or approval before a Members of Congress to consider amending Section 301. Congress could require greater consultation or approval before a
President takes new trade actions and request an economic impact study of how such actions may affect the U.S. economy, President takes new trade actions and request an economic impact study of how such actions may affect the U.S. economy,
global supply chains, and global trade rules. In addition, Members may consider adding provisions that grant the President global supply chains, and global trade rules. In addition, Members may consider adding provisions that grant the President
additional authorities to address new trade issues and barriers that may not be fully covered by WTO rules and disciplines additional authorities to address new trade issues and barriers that may not be fully covered by WTO rules and disciplines
(e.g., digital trade, state-owned enterprises, environment, and corruption). While some of these issues may not be directly (e.g., digital trade, state-owned enterprises, environment, and corruption). While some of these issues may not be directly
related to trade, they may impair the competitiveness of U.S. exports, restrict U.S. investment abroad, and negatively impact related to trade, they may impair the competitiveness of U.S. exports, restrict U.S. investment abroad, and negatively impact
the U.S. economy. Congress could also consider establishing a formal product exclusion process or set specific guidelines for the U.S. economy. Congress could also consider establishing a formal product exclusion process or set specific guidelines for
when and how to grant exclusions to trade restrictions imposed under Section 301. This could potentially promote when and how to grant exclusions to trade restrictions imposed under Section 301. This could potentially promote
transparency, consistency, and proper application of standards in reviewing exclusion requests, thereby ensuring that the transparency, consistency, and proper application of standards in reviewing exclusion requests, thereby ensuring that the
USTR carries out Section 301 objectives as prescribed by Congress. USTR carries out Section 301 objectives as prescribed by Congress.
Some Members have raised the issue of establishing or streamlining an exclusion process for the existing Section 301 tariffs Some Members have raised the issue of establishing or streamlining an exclusion process for the existing Section 301 tariffs
against China during hearings and in letters to the USTR. For instance, for the third and largest action against China, a group against China during hearings and in letters to the USTR. For instance, for the third and largest action against China, a group
of more than 160 Representatives urged the Administration to consider granting exclusions. Subsequently, the joint of more than 160 Representatives urged the Administration to consider granting exclusions. Subsequently, the joint
explanatory statement to the FY2019 appropriations law (P.L. 116-6) directed the USTR to establish a product exclusion explanatory statement to the FY2019 appropriations law (P.L. 116-6) directed the USTR to establish a product exclusion
process for that third stage of tariffs within 30 days of the law’s enactment. During the 116th Congress, some Members process for that third stage of tariffs within 30 days of the law’s enactment. During the 116th Congress, some Members
introduced legislation to limit USTR’s discretion on whether and how to grant or deny exclusion requests, while others introduced legislation to limit USTR’s discretion on whether and how to grant or deny exclusion requests, while others
supported expanding the President’s trade authorities beyond the scope of Section 301. More recently, in August 2020, some supported expanding the President’s trade authorities beyond the scope of Section 301. More recently, in August 2020, some
Members proposed to suspend temporarily duties on imports of articles needed to combat the Coronavirus Disease 2019 Members proposed to suspend temporarily duties on imports of articles needed to combat the Coronavirus Disease 2019
(COVID-19) pandemic. (COVID-19) pandemic.
Congressional Research Service Congressional Research Service

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Background
Section 301 of the Trade Act of 1974 grants the Office of the United States Trade Representative Section 301 of the Trade Act of 1974 grants the Office of the United States Trade Representative
(USTR) a range of responsibilities and authorities to investigate and respond to certain foreign (USTR) a range of responsibilities and authorities to investigate and respond to certain foreign
trade practices and take action to enforce U.S. rights under trade agreements. From the conclusion trade practices and take action to enforce U.S. rights under trade agreements. From the conclusion
of the Uruguay Round of multilateral trade negotiations in 1994, which resulted in the of the Uruguay Round of multilateral trade negotiations in 1994, which resulted in the
establishment of the World Trade Organization (WTO) in 1995, until the start of the Trump establishment of the World Trade Organization (WTO) in 1995, until the start of the Trump
Administration, the United States used Section 301 authorities primarily to build cases and pursue Administration, the United States used Section 301 authorities primarily to build cases and pursue
dispute settlement at the WTO. The Trump Administration has been more willing to go outside dispute settlement at the WTO. The Trump Administration has been more willing to go outside
the WTO to act unilaterally under these authorities to promote what the Administration describes the WTO to act unilaterally under these authorities to promote what the Administration describes
as “free,” “fair,” and “reciprocal” trade. The Trump Administration’s use of Section 301 to as “free,” “fair,” and “reciprocal” trade. The Trump Administration’s use of Section 301 to
impose tariffs as punitive measures has been the subject of congressional and broader impose tariffs as punitive measures has been the subject of congressional and broader
international debate. Some in Congress have raised a number of questions regarding USTR’s international debate. Some in Congress have raised a number of questions regarding USTR’s
actions, including the scope of USTR’s authorities, the types of trade actions allowed, and the actions, including the scope of USTR’s authorities, the types of trade actions allowed, and the
tariff exclusion process. tariff exclusion process.
The Administration has attributed its use of Section 301 to impose tariffs as punitive measures to The Administration has attributed its use of Section 301 to impose tariffs as punitive measures to
its determination to close a large and persistent gap between U.S. and foreign government its determination to close a large and persistent gap between U.S. and foreign government
practices that may disadvantage or discriminate against U.S. exports, firms, and workers.1 In practices that may disadvantage or discriminate against U.S. exports, firms, and workers.1 In
addition, the Administration has justified many of its recent tariff actions—particularly those addition, the Administration has justified many of its recent tariff actions—particularly those
against China—by alleging weaknesses in WTO dispute settlement procedures and the against China—by alleging weaknesses in WTO dispute settlement procedures and the
inadequacy or nonexistence of WTO rules to address certain Chinese and other trade practices.2 It inadequacy or nonexistence of WTO rules to address certain Chinese and other trade practices.2 It
has also cited what it terms as the failure of past trade negotiations and agreements to enhance has also cited what it terms as the failure of past trade negotiations and agreements to enhance
reciprocal market access for U.S. firms and workers.3 While some Members of Congress have reciprocal market access for U.S. firms and workers.3 While some Members of Congress have
applauded the Trump Administration’s Section 301 actions or called for more active use of trade applauded the Trump Administration’s Section 301 actions or called for more active use of trade
authorities, others have decried unilateral trade sanctions under Section 301 as an undesirable authorities, others have decried unilateral trade sanctions under Section 301 as an undesirable
shift in U.S. trade policy that could undermine the multilateral trading system.4 shift in U.S. trade policy that could undermine the multilateral trading system.4
Overview of Section 301
Title III of the Trade Act of 1974 (Sections 301 through 310, P.L. 93-618; codified as amended at Title III of the Trade Act of 1974 (Sections 301 through 310, P.L. 93-618; codified as amended at
19 U.S.C. §§ 2411-2420), titled “Relief from Unfair Trade Practices,” is often collectively 19 U.S.C. §§ 2411-2420), titled “Relief from Unfair Trade Practices,” is often collectively
referred to as “Section 301.” Section 301 provides a statutory means by which the United States referred to as “Section 301.” Section 301 provides a statutory means by which the United States
imposes penalties or trade restrictions (trade sanctions) on foreign countries that violate U.S. imposes penalties or trade restrictions (trade sanctions) on foreign countries that violate U.S.

1 See, for example, Office of the USTR, 1 See, for example, Office of the USTR, 2018 Trade Policy Agenda and 2017Annual Report of the President of the
United States on the Trade Agreements Program, March 2018. , March 2018.
2 For example, in its 2 For example, in its 2017 Report to Congress on China’s WTO Compliance, the USTR noted that “it is now clear that , the USTR noted that “it is now clear that
the WTO rules are not sufficient to constrain China’s market-distorting behavior. While some problematic policies and the WTO rules are not sufficient to constrain China’s market-distorting behavior. While some problematic policies and
practices being pursued by the Chinese government have been found by WTO panels or the Appellate Body to run practices being pursued by the Chinese government have been found by WTO panels or the Appellate Body to run
afoul of China’s WTO obligations, many of the most troubling ones are not directly disciplined by WTO rules or the afoul of China’s WTO obligations, many of the most troubling ones are not directly disciplined by WTO rules or the
additional commitments that China made in its Protocol of Accession,” January 2018. More recently, U.S. Trade additional commitments that China made in its Protocol of Accession,” January 2018. More recently, U.S. Trade
Representative Robert Lighthizer stated that “[t]he WTO is completely inadequate to stop China’s harmful technology Representative Robert Lighthizer stated that “[t]he WTO is completely inadequate to stop China’s harmful technology
practices.” (Office of the USTR, “WTO Report on US Action against China Shows Necessity for Reform,” September practices.” (Office of the USTR, “WTO Report on US Action against China Shows Necessity for Reform,” September
15, 2020.) 15, 2020.)
3 Office of the USTR, 3 Office of the USTR, 2018 Trade Policy Agenda and 2017Annual Report of the President of the United States on the
Trade Agreements Program, March 2018. , March 2018.
4 See, for example, Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,” 4 See, for example, Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,” Politico, ,
January 23, 2019, and Clark Packard and Philip Wallach, “Restraining the President: Congress and Trade Policy,” January 23, 2019, and Clark Packard and Philip Wallach, “Restraining the President: Congress and Trade Policy,” R
Street Policy Study No. 158, November 2018. November 2018.
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

trade agreements or engage in acts that are “unjustifiable” or “unreasonable” and burden U.S. trade agreements or engage in acts that are “unjustifiable” or “unreasonable” and burden U.S.
commerce. Prior to 1995 and the establishment of the WTO, the United States used Section 301 commerce. Prior to 1995 and the establishment of the WTO, the United States used Section 301
extensively to pressure other countries to eliminate trade barriers and open their markets to U.S. extensively to pressure other countries to eliminate trade barriers and open their markets to U.S.
exports. The creation of an enforceable dispute settlement mechanism in the WTO, strongly exports. The creation of an enforceable dispute settlement mechanism in the WTO, strongly
advocated by the United States, significantly reduced U.S. use of Section 301. advocated by the United States, significantly reduced U.S. use of Section 301.
The United States retains the flexibility to determine whether to seek recourse to challenge unfair The United States retains the flexibility to determine whether to seek recourse to challenge unfair
foreign trade practices through the WTO or to act unilaterally. The Statement of Administrative foreign trade practices through the WTO or to act unilaterally. The Statement of Administrative
Action (SAA)—which explained how U.S. agencies would implement the 1994 Uruguay Round Action (SAA)—which explained how U.S. agencies would implement the 1994 Uruguay Round
Agreements Act (URAA or “WTO Agreements,” P.L. 103-465)—states that the USTR will Agreements Act (URAA or “WTO Agreements,” P.L. 103-465)—states that the USTR will
invoke the dispute settlement procedures of the WTO Dispute Settlement Understanding (DSU) invoke the dispute settlement procedures of the WTO Dispute Settlement Understanding (DSU)
for investigations that involve an alleged violation of (or the impairment of U.S. benefits under) for investigations that involve an alleged violation of (or the impairment of U.S. benefits under)
WTO Agreements.5 At the same time, the SAA states that “[n]either section 301, nor the DSU WTO Agreements.5 At the same time, the SAA states that “[n]either section 301, nor the DSU
will require the” USTR to do so if it “does not consider that a matter involves” WTO Agreements. will require the” USTR to do so if it “does not consider that a matter involves” WTO Agreements.
Such a determination appears to be solely at the USTR’s discretion. However, the USTR’s Such a determination appears to be solely at the USTR’s discretion. However, the USTR’s
decision to bypass WTO dispute settlement and potentially impose retaliatory measures may be decision to bypass WTO dispute settlement and potentially impose retaliatory measures may be
challenged at the WTO. challenged at the WTO.
Origins and Evolution of Section 301
Modern U.S. trade policy, with its emphasis on reducing trade barriers, began with the passage of Modern U.S. trade policy, with its emphasis on reducing trade barriers, began with the passage of
the Reciprocal Trade Agreements Act of 1934 (P.L. 73-316). The the Reciprocal Trade Agreements Act of 1934 (P.L. 73-316). The ~~Act~~act authorized the President to authorized the President to
negotiate and implement reciprocal tariff reductions of up to 50%. The Trade Expansion Act of negotiate and implement reciprocal tariff reductions of up to 50%. The Trade Expansion Act of
1962 (P.L. 87-794) eventually superseded the 1934 Act. The purpose of the 1962 Act was to use 1962 (P.L. 87-794) eventually superseded the 1934 Act. The purpose of the 1962 Act was to use
mutually beneficial trade agreements to: mutually beneficial trade agreements to:
(1) stimulate the economic growth of the United States and maintain and enlarge foreign (1) stimulate the economic growth of the United States and maintain and enlarge foreign
markets for the products of U.S. agriculture, industry, mining, and commerce; markets for the products of U.S. agriculture, industry, mining, and commerce;
(2) strengthen economic relations with foreign countries through the development of open (2) strengthen economic relations with foreign countries through the development of open
and nondiscriminatory trading in the free world; and and nondiscriminatory trading in the free world; and
(3) prevent Communist economic penetration in developing countries.6 (3) prevent Communist economic penetration in developing countries.6
Section 201 of the 1962 Act provided the President with basic authority to enter into trade Section 201 of the 1962 Act provided the President with basic authority to enter into trade
agreements and to reduce, remove, bind, or raise import restrictions. Additionally, Section 252 agreements and to reduce, remove, bind, or raise import restrictions. Additionally, Section 252
authorized the President to take steps to eliminate “unjustifiable” foreign import restrictions that authorized the President to take steps to eliminate “unjustifiable” foreign import restrictions that
impaired the value of tariff commitments made to the United States, burdened U.S. commerce, or impaired the value of tariff commitments made to the United States, burdened U.S. commerce, or
prevented the expansion of trade. The President was authorized to take all appropriate and prevented the expansion of trade. The President was authorized to take all appropriate and
feasible steps within his power to eliminate such restrictions, including suspending or feasible steps within his power to eliminate such restrictions, including suspending or
withdrawing the benefits of trade concessions made under existing trade agreements, and to withdrawing the benefits of trade concessions made under existing trade agreements, and to
impose duties or other import restrictions on the products of any country establishing or impose duties or other import restrictions on the products of any country establishing or
maintaining burdensome restrictions on U.S. exports. Section 252 was added to ensure that the maintaining burdensome restrictions on U.S. exports. Section 252 was added to ensure that the
President actively followed the intent of the 1962 Act. President actively followed the intent of the 1962 Act.
Congress revised and expanded Section 252 under Title III of the Trade Act of 1974 (P.L. 93- Congress revised and expanded Section 252 under Title III of the Trade Act of 1974 (P.L. 93-
618). At the time, Members expressed significant concerns with the U.S. trade deficit, and many 618). At the time, Members expressed significant concerns with the U.S. trade deficit, and many

5 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 5 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol.
1 (1994). 1 (1994).
6 U.S. Senate Committee on Finance, “Trade Expansion Act of 1962,” Report to Accompany H.R. 11970, Report No. 6 U.S. Senate Committee on Finance, “Trade Expansion Act of 1962,” Report to Accompany H.R. 11970, Report No.
2059, 87th Congress, 2nd Session, September 14, 1962. 2059, 87th Congress, 2nd Session, September 14, 1962.
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link to page 7 link to page 7 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

believed that some U.S. trading partners were not providing the United States with reciprocal believed that some U.S. trading partners were not providing the United States with reciprocal
treatment in trade. For example, the Senate Finance Committee stated that the General Agreement treatment in trade. For example, the Senate Finance Committee stated that the General Agreement
on Tariffs and Trade’s (GATT’s) Kennedy Round (multilateral trade negotiations under the on Tariffs and Trade’s (GATT’s) Kennedy Round (multilateral trade negotiations under the
WTO’s predecessor, which had been negotiated as authorized by the Trade Expansion Act of WTO’s predecessor, which had been negotiated as authorized by the Trade Expansion Act of
1962) had failed to remedy fundamental inequities in the multilateral trading system, and that the 1962) had failed to remedy fundamental inequities in the multilateral trading system, and that the
U.S. economy had suffered as a result.7 The U.S. economy had suffered as a result.7 The ~~Committee~~committee stated that in the next round of stated that in the next round of
negotiations authorized by the bill, the United States should “obtain full reciprocity and equal negotiations authorized by the bill, the United States should “obtain full reciprocity and equal
competitive opportunities for U.S. commerce.”8 competitive opportunities for U.S. commerce.”8
The 1974 Act authorized the President to enter into negotiations to liberalize trade, but it also The 1974 Act authorized the President to enter into negotiations to liberalize trade, but it also
sought to expand the President’s authority to address unfair foreign trade practices. Title III sought to expand the President’s authority to address unfair foreign trade practices. Title III
provisions sought to “assure a swift and certain response to foreign import restrictions, export provisions sought to “assure a swift and certain response to foreign import restrictions, export
subsidies and price discrimination and other unfair foreign trade practices.”9 In particular, Section subsidies and price discrimination and other unfair foreign trade practices.”9 In particular, Section
301 of the 1974 Act authorized the President to retaliate against foreign countries that imposed 301 of the 1974 Act authorized the President to retaliate against foreign countries that imposed
“unjustifiable or unreasonable” restrictions against U.S. commerce. The “unjustifiable or unreasonable” restrictions against U.S. commerce. The ~~Act~~act defined unjustifiable defined unjustifiable
restrictions as those that violated international law or obligations under previous agreements. restrictions as those that violated international law or obligations under previous agreements.
Congress further revised and expanded Section 301 in the Trade Agreements Act of 1979 (P.L. Congress further revised and expanded Section 301 in the Trade Agreements Act of 1979 (P.L.
96-39), the Omnibus Tariff and Trade Act of 1984 (P.L. 98-573), and the Omnibus Trade and 96-39), the Omnibus Tariff and Trade Act of 1984 (P.L. 98-573), and the Omnibus Trade and
Competitiveness Act of 1988 (P.L. 100-418) Competitiveness Act of 1988 (P.L. 100-418) (Table 1). The 1979 Act amended Section 301 to . The 1979 Act amended Section 301 to
establish a timetable for investigating and taking action on complaints, and to establish new establish a timetable for investigating and taking action on complaints, and to establish new
procedures and requirements for the U.S. Special Trade Representative (later renamed as the U.S. procedures and requirements for the U.S. Special Trade Representative (later renamed as the U.S.
Trade Representative, USTR) to follow and meet during investigations. In 1984, Congress Trade Representative, USTR) to follow and meet during investigations. In 1984, Congress
expanded the President’s authority to respond to unfair trading practices in services, investment, expanded the President’s authority to respond to unfair trading practices in services, investment,
and intellectual property rights (IPR). The 1984 Act also defined the terms “unreasonable,” and intellectual property rights (IPR). The 1984 Act also defined the terms “unreasonable,”
“unjustifiable,” and “discriminatory” trade practices. Moreover, the 1984 Act granted the USTR “unjustifiable,” and “discriminatory” trade practices. Moreover, the 1984 Act granted the USTR
the authority to self-initiate investigations. the authority to self-initiate investigations.
Table 1. Amendments and Executive Orders Affecting Section 301
Title III of the Trade Act of 1974 (P.L. 93-618, 19 U.S.C. §§ 2411-2420) Title III of the Trade Act of 1974 (P.L. 93-618, 19 U.S.C. §§ 2411-2420)
Amendments
P.L. 96-39 P.L. 96-39
Trade Agreements Act of 1979 Trade Agreements Act of 1979
in Public Laws
P.L. 98-573 P.L. 98-573
Omnibus Tariff and Trade Act of 1984 Omnibus Tariff and Trade Act of 1984
P.L. 100-418 P.L. 100-418
Omnibus Trade and Competitiveness Act of 1988 Omnibus Trade and Competitiveness Act of 1988
P.L. 103-465 P.L. 103-465
Uruguay Round Agreements Act (1994) Uruguay Round Agreements Act (1994)
P.L. 104-295 P.L. 104-295
Miscellaneous Trade and Technical Corrections Act of 1996 Miscellaneous Trade and Technical Corrections Act of 1996
P.L. 106-113 P.L. 106-113
Consolidated Appropriations Act, 2000 Consolidated Appropriations Act, 2000
P.L. 106-200 P.L. 106-200
Trade and Development Act of 2000 Trade and Development Act of 2000
P.L. 108-429 P.L. 108-429
Miscellaneous Trade and Technical Corrections Act of 2004 Miscellaneous Trade and Technical Corrections Act of 2004
P.L. 114-125 P.L. 114-125
Trade Facilitation and Trade Enforcement Act of 2015 Trade Facilitation and Trade Enforcement Act of 2015
Executive
E.O. 12901 E.O. 12901
Identification of Trade Expansion Priorities (1994) Identification of Trade Expansion Priorities (1994)
Orders
E.O. 13116 E.O. 13116
Identification of Trade Expansion Priorities and Discriminatory Procurement Identification of Trade Expansion Priorities and Discriminatory Procurement
Practices (1999) Practices (1999)

7 U.S. Senate Committee on Finance, “Trade Reform Act of 1974: Report of the Committee on Finance, United States 7 U.S. Senate Committee on Finance, “Trade Reform Act of 1974: Report of the Committee on Finance, United States
Senate, Together with Additional Views on H.R. 10710,” Report No. 93-1298, 93rd Congress, 2nd Session, November Senate, Together with Additional Views on H.R. 10710,” Report No. 93-1298, 93rd Congress, 2nd Session, November
26, 1974. 26, 1974.
8 Ibid. 8 Ibid.
9 Ibid. 9 Ibid.
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

E.O. 13155 E.O. 13155
Access to HIV/AIDS Pharmaceuticals and Medical Technologies (2000) Access to HIV/AIDS Pharmaceuticals and Medical Technologies (2000)
Source: Congressional Research Service. Congressional Research Service.
Prior to the Uruguay Round Agreements Act (P.L. 103-465) and the establishment of the WTO in Prior to the Uruguay Round Agreements Act (P.L. 103-465) and the establishment of the WTO in
1995, the last major revision to Section 301 took place in 1988, when Congress established 1995, the last major revision to Section 301 took place in 1988, when Congress established
additional timetables for investigations and retaliation, expanded the definitions of unfair trading additional timetables for investigations and retaliation, expanded the definitions of unfair trading
practices, mandated certain types of retaliation (with waivers) and investigations, transferred practices, mandated certain types of retaliation (with waivers) and investigations, transferred
retaliatory authority from the President to the USTR, and made other substantive changes. In retaliatory authority from the President to the USTR, and made other substantive changes. In
addition, the 1988 Act established “Super 301,” which required the USTR to identify and addition, the 1988 Act established “Super 301,” which required the USTR to identify and
investigate “priority” foreign trade practices in “priority” countries that significantly hindered investigate “priority” foreign trade practices in “priority” countries that significantly hindered
U.S. exports, seek negotiations with these countries to end the unfair trading practices, and U.S. exports, seek negotiations with these countries to end the unfair trading practices, and
barring successful negotiations, retaliate (see barring successful negotiations, retaliate (see textbox). ).
“Super 301”
Section 310 of the Trade Act of 1974, as amended by Section 1302 of the Omnibus Trade and Competitiveness Act Section 310 of the Trade Act of 1974, as amended by Section 1302 of the Omnibus Trade and Competitiveness Act
of 1988, required the USTR, within 30 days after submitting the National Trade Estimate Report on Foreign Trade of 1988, required the USTR, within 30 days after submitting the National Trade Estimate Report on Foreign Trade
Barriers to Congress in 1989 and 1990, to identify U.S. trade liberalization priorities. Barriers to Congress in 1989 and 1990, to identify U.S. trade liberalization priorities.
This identification included priority practices (e.g., practices of foreign countries that burden U.S. trade) as This identification included priority practices (e.g., practices of foreign countries that burden U.S. trade) as ~~well~~ wel as as
“Priority Foreign Countries” and estimates of the amount by which U.S. exports would be increased if the barrier “Priority Foreign Countries” and estimates of the amount by which U.S. exports would be increased if the barrier
did not exist. The USTR was required to initiate Section 301 investigations on all priority practices identified for did not exist. The USTR was required to initiate Section 301 investigations on all priority practices identified for
each of the priority countries within 21 days after submitting the report to the House Ways and Means and Senate each of the priority countries within 21 days after submitting the report to the House Ways and Means and Senate
Finance Committees. In its consultations with the foreign country, the USTR was required to seek to negotiate an Finance Committees. In its consultations with the foreign country, the USTR was required to seek to negotiate an
agreement that provided for the elimination of, or compensation for, the priority practices within three years after agreement that provided for the elimination of, or compensation for, the priority practices within three years after
the initiation of the investigation. This statutory requirement, however, expired in 1990. the initiation of the investigation. This statutory requirement, however, expired in 1990.
In March 1994, President Wil iam J. Clinton issued Executive Order 12901 requiring the USTR, within six months In March 1994, President Wil iam J. Clinton issued Executive Order 12901 requiring the USTR, within six months
of the submission of the National Trade Estimate Report on Foreign Trade Barriers for 1994 and 1995, to review of the submission of the National Trade Estimate Report on Foreign Trade Barriers for 1994 and 1995, to review
U.S. trade expansion priorities and identify priority foreign country practices, the elimination of which would likely U.S. trade expansion priorities and identify priority foreign country practices, the elimination of which would likely
have the most significant potential to increase U.S. exports. In September 1995, President Clinton issued Executive have the most significant potential to increase U.S. exports. In September 1995, President Clinton issued Executive
Order 12973 to extend the terms of Executive Order 12901 to 1996 and 1997. The order required the USTR to Order 12973 to extend the terms of Executive Order 12901 to 1996 and 1997. The order required the USTR to
submit to the House Ways and Means and Senate Finance Committees and to publish in the submit to the House Ways and Means and Senate Finance Committees and to publish in the Federal Register a report a report
on the Priority Foreign Country practices identified. The report was not submitted in 1998 because the authority on the Priority Foreign Country practices identified. The report was not submitted in 1998 because the authority
expired in 1997. Super 301 authorities were renewed in March 1999, pursuant to Executive Order 13116, through expired in 1997. Super 301 authorities were renewed in March 1999, pursuant to Executive Order 13116, through
the end of 2001. Thereafter, the authorities were not further renewed. the end of 2001. Thereafter, the authorities were not further renewed.
President’s Clinton’s executive order required the USTR to initiate Section 301 investigations within 21 days of the President’s Clinton’s executive order required the USTR to initiate Section 301 investigations within 21 days of the
submission of the report with respect to all Priority Foreign Country practices identified. The normal Section 301 submission of the report with respect to all Priority Foreign Country practices identified. The normal Section 301
authorities, procedures, time limits, and other requirements generally applied to these investigations. In authorities, procedures, time limits, and other requirements generally applied to these investigations. In
consultations requested with the foreign country under Section 303, the USTR was required to seek to negotiate consultations requested with the foreign country under Section 303, the USTR was required to seek to negotiate
an agreement providing for the elimination of the practices as soon as possible or, if that was not feasible, an agreement providing for the elimination of the practices as soon as possible or, if that was not feasible,
compensatory trade benefits. The USTR monitored any agreements pursuant to Section 306. The semiannual report compensatory trade benefits. The USTR monitored any agreements pursuant to Section 306. The semiannual report
under Section 309 included the status of any investigation and, where appropriate, the extent to which it led to under Section 309 included the status of any investigation and, where appropriate, the extent to which it led to
increased U.S. export opportunities. increased U.S. export opportunities.
Section 314(f) of the Uruguay Round Agreements Act made permanent some of the terms of the executive orders Section 314(f) of the Uruguay Round Agreements Act made permanent some of the terms of the executive orders
in amending Section 310 of the Trade Act of 1974. in amending Section 310 of the Trade Act of 1974.

Source: Adapted from House Committee on Ways and Means, Adapted from House Committee on Ways and Means, Overview and Compilation of U.S. Trade Statues, Part I of II, 2010 , Part I of II, 2010
Edition, 111th Congress, 2nd Session, December 2010. Edition, 111th Congress, 2nd Session, December 2010.
The history and evolution of Section 301 and its retaliatory provision, as reflected in The history and evolution of Section 301 and its retaliatory provision, as reflected in
congressional statements, appear to indicate that, while U.S. policymakers were concerned and congressional statements, appear to indicate that, while U.S. policymakers were concerned and
frustrated with various foreign unfair trade practices, the motivation behind creating and frustrated with various foreign unfair trade practices, the motivation behind creating and
strengthening mechanisms for potential retaliation had been primarily to expand U.S. export strengthening mechanisms for potential retaliation had been primarily to expand U.S. export
opportunities and to induce other nations to reduce trade barriers—not to punish or inflict opportunities and to induce other nations to reduce trade barriers—not to punish or inflict
economic harm on trading partners. For example, in 1974, the Senate Finance Committee stated economic harm on trading partners. For example, in 1974, the Senate Finance Committee stated
that the authorities contained in the Trade Act of 1974 would: that the authorities contained in the Trade Act of 1974 would:
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serve as negotiating leverage to eliminate those barriers to, and other distortions of trade serve as negotiating leverage to eliminate those barriers to, and other distortions of trade
which Title I of this bill gives the President broad authority to harmonize, reduce or which Title I of this bill gives the President broad authority to harmonize, reduce or
eliminate on a reciprocal basis. The authority in this section should not be used frivolously eliminate on a reciprocal basis. The authority in this section should not be used frivolously
or without justification. The Committee feels, however, that there must be a credible threat or without justification. The Committee feels, however, that there must be a credible threat
of retaliation whenever a foreign nation treats the commerce of the United States unfairly.10 of retaliation whenever a foreign nation treats the commerce of the United States unfairly.10
The amendments to Section 301 since 1974 appear to reflect an effort by Congress to promote a The amendments to Section 301 since 1974 appear to reflect an effort by Congress to promote a
more active trade policy to combat perceived unfair trading practices. By establishing timetables more active trade policy to combat perceived unfair trading practices. By establishing timetables
and identifying and expanding the definitions of unfair trading practices, Congress appears to and identifying and expanding the definitions of unfair trading practices, Congress appears to
have sought greater executive branch use of Section 301 to address these practices. have sought greater executive branch use of Section 301 to address these practices.
Section 301 Investigations
Section 301 delegates to the USTR broad authority to take action, subject to the specific direction Section 301 delegates to the USTR broad authority to take action, subject to the specific direction
of the President, if any, to enforce U.S. rights under any trade agreement and address certain acts, of the President, if any, to enforce U.S. rights under any trade agreement and address certain acts,
policies, or practices of foreign countries.11 While the law does not limit the scope of policies, or practices of foreign countries.11 While the law does not limit the scope of
investigations, it is possible to identify four types of foreign government conduct subject to investigations, it is possible to identify four types of foreign government conduct subject to
Section 301 action: Section 301 action:
(1) (1) A denial of U.S. rights under any U.S. trade agreement by a foreign country.12 This 12 This
includes: (i) a violation of the provision of any U.S. trade agreement, (ii) an act, policy, or includes: (i) a violation of the provision of any U.S. trade agreement, (ii) an act, policy, or
practice that is inconsistent with the provisions of any U.S. trade agreement, or (iii) an practice that is inconsistent with the provisions of any U.S. trade agreement, or (iii) an
act, policy, or practice that denies benefits to the United States under any U.S. trade act, policy, or practice that denies benefits to the United States under any U.S. trade
agreement. agreement.
(2) (2) An “unjustifiable” action that “burdens or restricts” U.S. commerce.13 Acts, policies, 13 Acts, policies,
or practices are unjustifiable if they are in violation of, or inconsistent with, the or practices are unjustifiable if they are in violation of, or inconsistent with, the
international legal rights of the United States, and they include—but are not limited to—international legal rights of the United States, and they include—but are not limited to—
those that deny national or most-favored-nation treatment, the right of establishment to those that deny national or most-favored-nation treatment, the right of establishment to
U.S. enterprises, or protection of IPR.14 U.S. enterprises, or protection of IPR.14
(3) (3) An “unreasonable” action that “burdens or restricts” U.S. commerce.15 An act, 15 An act,
policy, or practice, while not necessarily in violation of—or inconsistent with—the policy, or practice, while not necessarily in violation of—or inconsistent with—the
international legal rights of the United States, is unreasonable if it is otherwise unfair and international legal rights of the United States, is unreasonable if it is otherwise unfair and
inequitable. inequitable.
Acts, policies, and practices that are unreasonable include—but are not limited to—those Acts, policies, and practices that are unreasonable include—but are not limited to—those
that constitute export targeting,16 deny fair and equitable opportunities for the that constitute export targeting,16 deny fair and equitable opportunities for the

10 Ibid. 10 Ibid.
11 For the purposes of Section 301 investigations, “foreign country” includes any foreign instrumentality, or possession 11 For the purposes of Section 301 investigations, “foreign country” includes any foreign instrumentality, or possession
or territory that is administered separately for customs purposes (19 U.S.C. §§ 2411(d)(7)). or territory that is administered separately for customs purposes (19 U.S.C. §§ 2411(d)(7)).
12 19 U.S.C. §§ 2411(a)(1)(A) and 2411(a)(1)(B)(i). 12 19 U.S.C. §§ 2411(a)(1)(A) and 2411(a)(1)(B)(i).
13 19 U.S.C. § 2411(a)(1)(B)(ii). 13 19 U.S.C. § 2411(a)(1)(B)(ii).
14 19 U.S.C. § 2411(d)(4). The MFN treatment generally refers to the practice of extending to a country the best trade 14 19 U.S.C. § 2411(d)(4). The MFN treatment generally refers to the practice of extending to a country the best trade
privileges granted to any other nation. privileges granted to any other nation.
15 19 U.S.C. § 2411(d)(3). In determining whether any act, policy, or practice is unreasonable, USTR has to take into 15 19 U.S.C. § 2411(d)(3). In determining whether any act, policy, or practice is unreasonable, USTR has to take into
account, to the extent that is appropriate, reciprocal opportunities in the United States for foreign nationals and firms account, to the extent that is appropriate, reciprocal opportunities in the United States for foreign nationals and firms
(19 U.S.C. § 2411(d)(3)(D)). (19 U.S.C. § 2411(d)(3)(D)).
16 19 U.S.C. § 2411(d)(3)(B)(ii). The term “export targeting” refers to any foreign government plan or scheme 16 19 U.S.C. § 2411(d)(3)(B)(ii). The term “export targeting” refers to any foreign government plan or scheme
consisting of a combination of coordinated actions (whether carried out severally or jointly) that are bestowed on a consisting of a combination of coordinated actions (whether carried out severally or jointly) that are bestowed on a
specific enterprise, industry, or group thereof, the effect of which is to assist the enterprise, industry, or group to specific enterprise, industry, or group thereof, the effect of which is to assist the enterprise, industry, or group to
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establishment of an enterprise,17 deny adequate and effective protection of IPR,18 fail to establishment of an enterprise,17 deny adequate and effective protection of IPR,18 fail to
provide nondiscriminatory market access opportunities for U.S. persons that rely upon provide nondiscriminatory market access opportunities for U.S. persons that rely upon
intellectual property protection,19 or deny market opportunities.20 intellectual property protection,19 or deny market opportunities.20
Policies and practices (or lack thereof) are also unreasonable if they constitute a Policies and practices (or lack thereof) are also unreasonable if they constitute a
persistent pattern of conduct that (i) denies workers the right to associate, organize, and persistent pattern of conduct that (i) denies workers the right to associate, organize, and
bargain collectively, (ii) permits any form of forced or compulsory labor, or (iii) fails to bargain collectively, (ii) permits any form of forced or compulsory labor, or (iii) fails to
provide a minimum age for the employment of children or standards for minimum wages, provide a minimum age for the employment of children or standards for minimum wages,
hours of work, and occupational safety and health of workers.21 hours of work, and occupational safety and health of workers.21
(4) (4) A “discriminatory” action that “burdens or restricts” U.S. commerce.22 Acts, 22 Acts,
policies, and practices that are discriminatory include those that deny national or most- policies, and practices that are discriminatory include those that deny national or most-
favored-nation (MFN) treatment to U.S. goods, services, or investment.23 favored-nation (MFN) treatment to U.S. goods, services, or investment.23
The statute defines “commerce” to include goods, services (including transfers of information) The statute defines “commerce” to include goods, services (including transfers of information)
associated with international trade (whether or not such services are related to specific goods), associated with international trade (whether or not such services are related to specific goods),
and U.S. investment abroad (i.e., foreign direct investment or FDI) by U.S. persons with and U.S. investment abroad (i.e., foreign direct investment or FDI) by U.S. persons with
implications for trade in goods or services.24 implications for trade in goods or services.24
The Section 301 “injury test” (i.e., determining what actions “burden or restrict” U.S. commerce) The Section 301 “injury test” (i.e., determining what actions “burden or restrict” U.S. commerce)
may not be as stringent as that of other U.S. trade laws, in that Section 301 does not demand may not be as stringent as that of other U.S. trade laws, in that Section 301 does not demand
evidence of “substantial,” “serious,” or “material injury.” However, petitioners still have to evidence of “substantial,” “serious,” or “material injury.” However, petitioners still have to
demonstrate a certain level of credible injury. In some instances, the USTR has refused to initiate demonstrate a certain level of credible injury. In some instances, the USTR has refused to initiate
(or has suspended) a Section 301 investigation because of insufficient substantiation for the claim (or has suspended) a Section 301 investigation because of insufficient substantiation for the claim
that an allegedly unfair foreign trade practice burdens or restricts U.S. commerce. that an allegedly unfair foreign trade practice burdens or restricts U.S. commerce.
Section 301 Committee
Section 301 investigations are conducted by a “Section 301 Committee”—a subordinate, staff-Section 301 investigations are conducted by a “Section 301 Committee”—a subordinate, staff-
level body of the USTR-led interagency Trade Policy Staff Committee (TPSC). The Section 301 level body of the USTR-led interagency Trade Policy Staff Committee (TPSC). The Section 301
Committee is comprised of a Chair—an official from the Office of the USTR appointed by the Committee is comprised of a Chair—an official from the Office of the USTR appointed by the
U.S. Trade Representative, and, with respect to each investigation and subject to the invitation of U.S. Trade Representative, and, with respect to each investigation and subject to the invitation of
the Chair, members designated by agencies that have an interest in the issues raised by the the Chair, members designated by agencies that have an interest in the issues raised by the
investigation. In three of the most recent investigations, members have included representatives investigation. In three of the most recent investigations, members have included representatives
from the U.S. Departments of Homeland Security, the Treasury, Commerce, State, and from the U.S. Departments of Homeland Security, the Treasury, Commerce, State, and
Agriculture and the U.S. Small Business AdministratiAgriculture and the U.S. Small Business Administration (Table 2). The functions of the . The functions of the

become more competitive in the export of a class or kind of merchandise (19 U.S.C. § 2411(d)(3)(E)). become more competitive in the export of a class or kind of merchandise (19 U.S.C. § 2411(d)(3)(E)).
17 19 U.S.C. § 2411(d)(3)(B)(i)(I). 17 19 U.S.C. § 2411(d)(3)(B)(i)(I).
18 19 U.S.C. § 2411(d)(3)(B)(i)(II). Acts, policies, and practices might be deemed unreasonable even if the foreign 18 19 U.S.C. § 2411(d)(3)(B)(i)(II). Acts, policies, and practices might be deemed unreasonable even if the foreign
country is in compliance with the specific obligations of the WTO Agreement on Trade-Related Aspects of Intellectual country is in compliance with the specific obligations of the WTO Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS, referred to in 19 U.S.C. § 3511(d)(15)). Property Rights (TRIPS, referred to in 19 U.S.C. § 3511(d)(15)).
19 19 U.S.C. § 2411(d)(3)(B)(i)(III). 19 19 U.S.C. § 2411(d)(3)(B)(i)(III).
20 19 U.S.C. § 2411(d)(3)(B)(i)(IV). The denial of fair and equitable market opportunities include a foreign 20 19 U.S.C. § 2411(d)(3)(B)(i)(IV). The denial of fair and equitable market opportunities include a foreign
government’s toleration of systematic anticompetitive activities by enterprises or among enterprises in the foreign government’s toleration of systematic anticompetitive activities by enterprises or among enterprises in the foreign
country that have the effect of restricting, on a basis that is inconsistent with commercial considerations, access of U.S. country that have the effect of restricting, on a basis that is inconsistent with commercial considerations, access of U.S.
goods or services to a foreign market. goods or services to a foreign market.
21 19 U.S.C. § 2411(d)(3)(B)(iii). 21 19 U.S.C. § 2411(d)(3)(B)(iii).
22 19 U.S.C. § 2411(d)(5). 22 19 U.S.C. § 2411(d)(5).
23 The MFN treatment generally refers to the practice of extending to a country the best trade privileges granted to any 23 The MFN treatment generally refers to the practice of extending to a country the best trade privileges granted to any
other nation. other nation.
24 19 U.S.C. § 2411(d)(1). 24 19 U.S.C. § 2411(d)(1).
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~~Committee~~committee include, among other things, to review Section 301 complaints, conduct public include, among other things, to review Section 301 complaints, conduct public
hearings upon request by a complainant or an interested party, and make recommendations to the hearings upon request by a complainant or an interested party, and make recommendations to the
TPSC regarding potential actions under Section 301.25 The USTR bases its final decision on the TPSC regarding potential actions under Section 301.25 The USTR bases its final decision on the
recommendations provided by the TPSC. recommendations provided by the TPSC.
Table 2. Section 301 Committee Members
Federal Agencies Represented in Select Section 301 Investigations since 2017 Federal Agencies Represented in Select Section 301 Investigations since 2017

CASE 125
CASE 126
CASE 127
China’s Acts, Policies, and Practices
Enforcement of U.S.
France’s Digital

Related to Technology Transfer,
WTO Rights in Large
Services Tax
Intellectual Property, and Innovation
Civil Aircraft Dispute
with the EU
Office of the U.S. Trade Office of the U.S. Trade
√
Representative (Chair) Representative (Chair)
  
√
√
U.S. Customs and Border U.S. Customs and Border
Protection/U.S. Department of Protection/U.S. Department of
√
√
√  
Homeland Security Homeland Security
U.S. Department of the U.S. Department of the
√
~~Treasury~~

√
√Treasury   
U.S. Department of Commerce U.S. Department of Commerce
√
√
√  
U.S. Department of State U.S. Department of State
√
√
√  
U.S. Department of Agriculture U.S. Department of Agriculture
√
√
√
~~U.S. Small Business~~
√
~~Administration~~

√
√   U.S. Small Business Administration   
U.S. Department of Labor U.S. Department of Labor
√
√ 

U.S. Department of Justice U.S. Department of Justice
√

U.S. Department of Health and U.S. Department of Health and
√
Human Services Human Services



Council of Economic Advisers Council of Economic Advisers
√

U.S. Department of U.S. Department of
Transportation Transportation

√

Source: Congressional Research Service with information from the Office of the USTR. Congressional Research Service with information from the Office of the USTR.
Notes: There have been representatives from the U.S. International Trade Commission (USITC) present in all There have been representatives from the U.S. International Trade Commission (USITC) present in all
three Section 301 hearings. However, they are not considered members of the Section 301 Committee. three Section 301 hearings. However, they are not considered members of the Section 301 Committee.
Procedures for Section 301 Action
Sections 302 through 309 of the Trade Act of 1974 describe the procedural requirements and Sections 302 through 309 of the Trade Act of 1974 describe the procedural requirements and
limitations for Section 301 actilimitations for Section 301 actions. Figure 1 depicts the typical proceedings of a Section 301 depicts the typical proceedings of a Section 301
investigation. investigation.

25 15 25 15 ~~CFR~~C.F.R. § 2002.3. § 2002.3.
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Figure 1. The Section 301 Investigative Process

Source: Congressional Research Service, 19 U.S.C. §§ 2411-2420, and 15 Congressional Research Service, 19 U.S.C. §§ 2411-2420, and 15 ~~CFR~~C.F.R. Part 2006. Part 2006.
Notes: The actual process may vary and is subject to change at the discretion of the USTR. The actual process may vary and is subject to change at the discretion of the USTR.
Initiation of an Investigation
The USTR may initiate a Section 301 case as a result of a petition or can “self-initiate” a case. To The USTR may initiate a Section 301 case as a result of a petition or can “self-initiate” a case. To
date, 60% of all Section 301 investigations have arisen from petitions that private parties date, 60% of all Section 301 investigations have arisen from petitions that private parties
submitted to the USTR submitted to the USTR (Table A-2). However, since 1995, the USTR has initiated most . However, since 1995, the USTR has initiated most
investigations (74%). In deciding whether to initiate a Section 301 investigation, the USTR has investigations (74%). In deciding whether to initiate a Section 301 investigation, the USTR has
discretion to determine if doing so would be effective in addressing the act, policy, or practice at discretion to determine if doing so would be effective in addressing the act, policy, or practice at
issue.26 issue.26
Initiation by Petition
Any interested person may file a petition with the USTR requesting that the agency take action Any interested person may file a petition with the USTR requesting that the agency take action
under Section 301 (see under Section 301 (see textbox).27 Petitions submitted pursuant to Section 302 are required, ).27 Petitions submitted pursuant to Section 302 are required,
among other things, to: among other things, to:
(1) Describe the economic interest of the petitioner directly affected by a foreign act, policy, (1) Describe the economic interest of the petitioner directly affected by a foreign act, policy,
or practice that is actionable under Section 301; or practice that is actionable under Section 301;
(2) Describe the rights of the United States being violated or denied under the trade (2) Describe the rights of the United States being violated or denied under the trade
agreement that the petitioner seeks to enforce or the other act, policy or practice that is agreement that the petitioner seeks to enforce or the other act, policy or practice that is
the subject of the petition; the subject of the petition;
(3) Identify the product, service, IPR, or FDI matter for which the rights of the United States (3) Identify the product, service, IPR, or FDI matter for which the rights of the United States
under the agreement claimed to be violated or denied are sought, or that is subject to the under the agreement claimed to be violated or denied are sought, or that is subject to the
act, policy or practice; act, policy or practice;

26 19 U.S.C. § 2412(c). 26 19 U.S.C. § 2412(c).
27 The term “interested persons,” for the purposes of 19 U.S.C. §§ 2412, 2414, 2416, and 2417, includes, but is not 27 The term “interested persons,” for the purposes of 19 U.S.C. §§ 2412, 2414, 2416, and 2417, includes, but is not
limited to, domestic firms and workers, representatives of consumer interests, U.S. product exporters, and any limited to, domestic firms and workers, representatives of consumer interests, U.S. product exporters, and any
industrial user of any goods or services that may be affected by actions taken pursuant to 19 U.S.C. § 2411. The term industrial user of any goods or services that may be affected by actions taken pursuant to 19 U.S.C. § 2411. The term
“person” refers to “any individual, partnership, corporation, association, organization, business trust, government “person” refers to “any individual, partnership, corporation, association, organization, business trust, government
entity, or other entity subject to the jurisdiction of the United States” (19 entity, or other entity subject to the jurisdiction of the United States” (19 ~~USC~~U.S.C. § 1683(8)). § 1683(8)).
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(4) Demonstrate that rights of the United States under a trade agreement are not being (4) Demonstrate that rights of the United States under a trade agreement are not being
provided (or show the manner in which the foreign act, policy or practice violates or is provided (or show the manner in which the foreign act, policy or practice violates or is
inconsistent with the provisions of a trade agreement or otherwise denies benefits inconsistent with the provisions of a trade agreement or otherwise denies benefits
accruing to the United States under a trade agreement, or is unjustifiable, unreasonable, accruing to the United States under a trade agreement, or is unjustifiable, unreasonable,
or discriminatory and burdens or restricts U.S. commerce); or discriminatory and burdens or restricts U.S. commerce);
(5) Provide information concerning the degree to which U.S. commerce is burdened or (5) Provide information concerning the degree to which U.S. commerce is burdened or
restricted, the volume of trade in the goods or services involved, and the methodology restricted, the volume of trade in the goods or services involved, and the methodology
used to calculate it; and used to calculate it; and
(6) State whether the petitioner has filed (or is filing) for other forms of relief under the (6) State whether the petitioner has filed (or is filing) for other forms of relief under the
Trade Act of 1974 or any other provision of law.28 Trade Act of 1974 or any other provision of law.28
Interested Persons Requesting Action Under Section 301
An interested person is deemed to be any party that has a significant interest affected by the act, policy, or practice An interested person is deemed to be any party that has a significant interest affected by the act, policy, or practice
in question. These include any: in question. These include any:
 
producer, commercial importer, or exporter of an affected product or service; producer, commercial importer, or exporter of an affected product or service;
 
U.S. person seeking to invest abroad directly, with implications for trade in goods or services; U.S. person seeking to invest abroad directly, with implications for trade in goods or services;
 
person who relies on protection of IPR; person who relies on protection of IPR;
 
trade association, trade association, certified union or recognized union or group of workers that is representative of an industry certified union or recognized union or group of workers that is representative of an industry
engaged in the manufacture, production or wholesale distribution in the United States of a product or service engaged in the manufacture, production or wholesale distribution in the United States of a product or service
so affected; or so affected; or
 
other private party representing a significant economic interest affected directly by the act, policy or practice other private party representing a significant economic interest affected directly by the act, policy or practice
complained of in the petition. complained of in the petition.
Source: Adapted from 15 Adapted from 15 ~~CFR~~C.F.R. § 2006.0(b). § 2006.0(b).
Within 45 days of the receipt of a petition, the USTR must determine, after the Section 301 Within 45 days of the receipt of a petition, the USTR must determine, after the Section 301
Committee reviews the allegations, whether to initiate an investigation.29 If the USTR determines Committee reviews the allegations, whether to initiate an investigation.29 If the USTR determines
not to initiate an investigation, it must notify the petitioner of the reasons and publish notice of not to initiate an investigation, it must notify the petitioner of the reasons and publish notice of
the negative determination and a summary of such reasons in the the negative determination and a summary of such reasons in the Federal Register.30 On the other .30 On the other
hand, if the USTR determines to initiate an investigation, the agency must publish a summary of hand, if the USTR determines to initiate an investigation, the agency must publish a summary of
the petition in the the petition in the Federal Register and provide an opportunity for the presentation of views and provide an opportunity for the presentation of views
concerning the issues raised in the petition, including a public hearing.31 The petitioner or any concerning the issues raised in the petition, including a public hearing.31 The petitioner or any
interested person may also request a hearing.32 interested person may also request a hearing.32
Self-Initiation
Section 301 also provides two means by which the USTR may initiate an investigation in the Section 301 also provides two means by which the USTR may initiate an investigation in the
absence of a petition. It can determine to investigate any matter, but only after consulting with absence of a petition. It can determine to investigate any matter, but only after consulting with
appropriate stakeholders and not before publishing such determination in the appropriate stakeholders and not before publishing such determination in the Federal Register.33 .33

28 For more detail, see 15 C.F.R. § 2006.0. According to 15 28 For more detail, see 15 C.F.R. § 2006.0. According to 15 ~~CFR~~C.F.R. § 2006.2, “[i]f the petition filed pursuant to Section § 2006.2, “[i]f the petition filed pursuant to Section
302 does not conform substantially to [these] requirements302 does not conform substantially to [these] requirements ...... , the Chairman of the Section 301 Committee may decline , the Chairman of the Section 301 Committee may decline
to docket the petition as filed and, if requested by petitioner, return it to petitioner with guidance on making the petition to docket the petition as filed and, if requested by petitioner, return it to petitioner with guidance on making the petition
conform to the requirements, or may nevertheless determine that there is sufficient information on which to proceed to conform to the requirements, or may nevertheless determine that there is sufficient information on which to proceed to
a determination whether to initiate an investigation.” a determination whether to initiate an investigation.”
29 19 U.S.C. § 2412(a)(2). 29 19 U.S.C. § 2412(a)(2).
30 19 U.S.C. § 2412(a)(3). 30 19 U.S.C. § 2412(a)(3).
31 19 U.S.C. § 2412(a)(4). 31 19 U.S.C. § 2412(a)(4).
32 15 32 15 ~~CFR~~C.F.R. § 2006.3(b). § 2006.3(b).
33 19 U.S.C. § 2412(b)(1). Matters may include acts, policies, or practices of a foreign government identified as a “trade 33 19 U.S.C. § 2412(b)(1). Matters may include acts, policies, or practices of a foreign government identified as a “trade
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In addition, the USTR is generally required to initiate a Section 301 investigation of any country In addition, the USTR is generally required to initiate a Section 301 investigation of any country
within 30 days after identifying it as a “Special 301” “Priority Foreign Country.” In its annual within 30 days after identifying it as a “Special 301” “Priority Foreign Country.” In its annual
“Special 301 Report,” the USTR identifies countries with the most onerous or egregious acts, “Special 301 Report,” the USTR identifies countries with the most onerous or egregious acts,
policies, or practices that deny adequate and effective IPR protection and have the greatest policies, or practices that deny adequate and effective IPR protection and have the greatest
adverse impact (actual or potential) on U.S. products, services, and investments. Additionally, adverse impact (actual or potential) on U.S. products, services, and investments. Additionally,
these are countries that are not entering into good faith negotiations, or making significant these are countries that are not entering into good faith negotiations, or making significant
progress in bilateral or multilateral negotiations, to provide adequate and effective IPR progress in bilateral or multilateral negotiations, to provide adequate and effective IPR
protection.34 The USTR may identify—or revoke the identification of—any foreign country as a protection.34 The USTR may identify—or revoke the identification of—any foreign country as a
Priority Foreign Country at any time, subject to various reporting requirements.35 (Rules for IPR Priority Foreign Country at any time, subject to various reporting requirements.35 (Rules for IPR
cases initiated through Special 301 differ somewhat from those that govern standard Section 301 cases initiated through Special 301 differ somewhat from those that govern standard Section 301
investigations. For more detail, see investigations. For more detail, see “Intellectual Property Enforcement and Section 301.”)
Request for Information and Consultations with the Targeted
Foreign Government
When the USTR receives a petition alleging violations of an international trade agreement, the When the USTR receives a petition alleging violations of an international trade agreement, the
agency has to notify the government of the foreign country and may request any information agency has to notify the government of the foreign country and may request any information
necessary to make a determination as to whether or not to initiate an investigation.36 If no necessary to make a determination as to whether or not to initiate an investigation.36 If no
information is received within a reasonable time, the USTR may proceed based on the information is received within a reasonable time, the USTR may proceed based on the
information currently at its disposal. information currently at its disposal.
Upon initiating an investigation, the USTR must request consultations with the targeted foreign Upon initiating an investigation, the USTR must request consultations with the targeted foreign
government regarding the issues raised.37 In preparing for these consultations, the USTR is government regarding the issues raised.37 In preparing for these consultations, the USTR is
required to seek information and advice from the petitioner and any appropriate private sector required to seek information and advice from the petitioner and any appropriate private sector
representatives.38 The USTR may, after consulting with the petitioner (if any), delay for up to 90 representatives.38 The USTR may, after consulting with the petitioner (if any), delay for up to 90
days any request for consultations with the foreign government in order to verify or improve the days any request for consultations with the foreign government in order to verify or improve the
petition and ensure an adequate basis for consultation.39 The agency is required to submit a notice petition and ensure an adequate basis for consultation.39 The agency is required to submit a notice
of any such delay to Congress and publish it in the of any such delay to Congress and publish it in the Federal Register.40 .40
Request for Formal Dispute Settlement
If the USTR determines that the investigation involves a trade agreement and a mutually If the USTR determines that the investigation involves a trade agreement and a mutually
acceptable resolution is not reached before the close of the consultation period—if any—specified acceptable resolution is not reached before the close of the consultation period—if any—specified
in the trade agreement, or the 150th day after the day on which consultation was commenced, in the trade agreement, or the 150th day after the day on which consultation was commenced,
whichever is earlier, the USTR must request formal dispute settlement proceedings under the whichever is earlier, the USTR must request formal dispute settlement proceedings under the

enforcement priority” by 19 U.S.C. § 2420(c)(2). Stakeholders include, but are not limited to, the trade policy bodies enforcement priority” by 19 U.S.C. § 2420(c)(2). Stakeholders include, but are not limited to, the trade policy bodies
authorized by 19 U.S.C. § 2155. authorized by 19 U.S.C. § 2155.
34 19 U.S.C. § 2242(b)(1). 34 19 U.S.C. § 2242(b)(1).
35 19 U.S.C. § 2242(c)-(e). 35 19 U.S.C. § 2242(c)-(e).
36 15 36 15 ~~CFR~~C.F.R. § 2006.4. § 2006.4.
37 19 U.S.C. § 2413(a)(1). 37 19 U.S.C. § 2413(a)(1).
38 For example, committees established pursuant to 19 U.S.C. § 2155. 38 For example, committees established pursuant to 19 U.S.C. § 2155.
39 19 U.S.C. § 2413(b)(1)(A). 39 19 U.S.C. § 2413(b)(1)(A).
40 19 U.S.C. § 2413(b)(2). If consultations are delayed by reason of 19 U.S.C. § 2413(b)(1)(A), each time limitation 40 19 U.S.C. § 2413(b)(2). If consultations are delayed by reason of 19 U.S.C. § 2413(b)(1)(A), each time limitation
under 19 U.S.C. § 2414 is extended for the period of such delay. Reporting requirements to Congress are outlined in 19 under 19 U.S.C. § 2414 is extended for the period of such delay. Reporting requirements to Congress are outlined in 19
U.S.C. § 2419(a)(3). U.S.C. § 2419(a)(3).
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governing trade agreement (WTO or other relevant trade agreement to which the United States is governing trade agreement (WTO or other relevant trade agreement to which the United States is
a party).41 a party).41
In the past, when investigations have not involved a trade agreement, the USTR has initiated In the past, when investigations have not involved a trade agreement, the USTR has initiated
investigations while simultaneously requesting consultations with the foreign government and investigations while simultaneously requesting consultations with the foreign government and
seeking information and advice from appropriate trade advisory committees. If an investigation seeking information and advice from appropriate trade advisory committees. If an investigation
includes “mixed” issues, some of which are covered by an agreement and some of which are not, includes “mixed” issues, some of which are covered by an agreement and some of which are not,
the Statement of Administrative Action (SAA)—which explained how U.S. agencies would the Statement of Administrative Action (SAA)—which explained how U.S. agencies would
implement the 1994 Uruguay Round Agreements Act (URAA)—states that the USTR will pursue implement the 1994 Uruguay Round Agreements Act (URAA)—states that the USTR will pursue
consultations within the agreement framework and through bilateral negotiations.42 consultations within the agreement framework and through bilateral negotiations.42
Public Hearing and Request for Comments
As mentioned above, if the USTR makes an affirmative determination to initiate an investigation, As mentioned above, if the USTR makes an affirmative determination to initiate an investigation,
it is required to publish a summary of the petition or reasons to self-initiate such investigation in it is required to publish a summary of the petition or reasons to self-initiate such investigation in
the the Federal Register.43 In addition, within 30 days of making such determination (or on a date .43 In addition, within 30 days of making such determination (or on a date
after such period if agreed to by the petitioner), the USTR must provide an opportunity for after such period if agreed to by the petitioner), the USTR must provide an opportunity for
interested persons to present their views concerning the issues raised in the petition, including interested persons to present their views concerning the issues raised in the petition, including
through a public hearing.44 However, to present views, an interested person must submit a written through a public hearing.44 However, to present views, an interested person must submit a written
brief before the close of the period of submission as announced through a public notice (see brief before the close of the period of submission as announced through a public notice (see
textbox).45 At any stage of the investigation, a petitioner, or any interested person, can request to ).45 At any stage of the investigation, a petitioner, or any interested person, can request to
present views at a hearing. The USTR is required to accommodate such requests within a timely present views at a hearing. The USTR is required to accommodate such requests within a timely
and reasonable period. and reasonable period.
Submitting Written Briefs
To participate in the presentation of views, either at a public hearing or otherwise, an interested person must submit To participate in the presentation of views, either at a public hearing or otherwise, an interested person must submit
a written brief before the close of the period of submission set forth in the public notice. The brief may be a written brief before the close of the period of submission set forth in the public notice. The brief may be
supplemented by oral testimony in any public hearing, and it must state clearly the position taken and describe with supplemented by oral testimony in any public hearing, and it must state clearly the position taken and describe with
particularity the supporting rationale. particularity the supporting rationale.
In order to assure each interested person an opportunity to contest the information provided by other parties, the In order to assure each interested person an opportunity to contest the information provided by other parties, the
Section 301 Committee is required to entertain rebuttal briefs filed by any interested person within a time limit Section 301 Committee is required to entertain rebuttal briefs filed by any interested person within a time limit
specified in the public notice. Rebuttal briefs are to be strictly limited to demonstrating errors of fact or analysis not specified in the public notice. Rebuttal briefs are to be strictly limited to demonstrating errors of fact or analysis not
pointed out in the briefs or hearing and be as concise as possible. pointed out in the briefs or hearing and be as concise as possible.
Source: Adapted from 15 Adapted from 15 ~~CFR~~C.F.R. § 2006.8. § 2006.8.
Consultations before Making Determinations
During a Section 301 investigation and prior to making a determination on what action, if any, to During a Section 301 investigation and prior to making a determination on what action, if any, to
take, the USTR is required to consult with the petitioner and to seek advice from any appropriate take, the USTR is required to consult with the petitioner and to seek advice from any appropriate
private sector advisory representatives.46 If expeditious action is required, the USTR must seek private sector advisory representatives.46 If expeditious action is required, the USTR must seek
such advice after making the determination. In addition, the USTR can—but is not required to—such advice after making the determination. In addition, the USTR can—but is not required to—

41 19 U.S.C. § 2413(a)(2). The USTR must seek information and advice from the petitioner (if any) and the appropriate 41 19 U.S.C. § 2413(a)(2). The USTR must seek information and advice from the petitioner (if any) and the appropriate
committees established pursuant to 19 U.S.C. § 2155 in preparing U.S. presentations for consultations and dispute committees established pursuant to 19 U.S.C. § 2155 in preparing U.S. presentations for consultations and dispute
settlement proceedings (19 U.S.C. § 2413(a)(3)). settlement proceedings (19 U.S.C. § 2413(a)(3)).
42 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 42 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316,
Vol. 1 (1994). Vol. 1 (1994).
43 19 U.S.C. § 2412(a)(4). 43 19 U.S.C. § 2412(a)(4).
44 19 U.S.C. § 2412(a)(4)(A)-(B). 44 19 U.S.C. § 2412(a)(4)(A)-(B).
45 15 45 15 ~~CFR~~C.F.R. §§ 2006.8 and 2006.9. §§ 2006.8 and 2006.9.
46 15 46 15 ~~CFR~~C.F.R. § 2006.11. This includes committees established pursuant to 19 U.S.C. § 2155. § 2006.11. This includes committees established pursuant to 19 U.S.C. § 2155.
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request the views of the U.S. International Trade Commission (USITC) concerning the impact request the views of the U.S. International Trade Commission (USITC) concerning the impact
that a proposed retaliatory action could have on the U.S. economy. Doing so might help the that a proposed retaliatory action could have on the U.S. economy. Doing so might help the
USTR avoid taking an action that could have negative effects on industries or sectors other than USTR avoid taking an action that could have negative effects on industries or sectors other than
those petitioning for an investigation. those petitioning for an investigation.
Determination
Following consultations, the USTR begins its investigation to determine if the alleged conduct is Following consultations, the USTR begins its investigation to determine if the alleged conduct is
unfair or violates U.S. rights under trade agreements and is therefore actionable under Section unfair or violates U.S. rights under trade agreements and is therefore actionable under Section
301. On the basis of the petition (if any), investigation, and consultations, and after receiving the 301. On the basis of the petition (if any), investigation, and consultations, and after receiving the
advice of the Section 301 Committee, the USTR makes a determination. However, prior to advice of the Section 301 Committee, the USTR makes a determination. However, prior to
making a recommendation on what action, if any, to take, the Section 301 Committee is required making a recommendation on what action, if any, to take, the Section 301 Committee is required
to hold a public hearing upon the written request of any interested person.47 to hold a public hearing upon the written request of any interested person.47
If the USTR’s determination is affirmative, it then decides what action—if any—to take, subject If the USTR’s determination is affirmative, it then decides what action—if any—to take, subject
to the direction of the President.48 In the case of an investigation involving violation of a trade to the direction of the President.48 In the case of an investigation involving violation of a trade
agreement, the USTR is generally required to make a determination within 30 days after the agreement, the USTR is generally required to make a determination within 30 days after the
dispute settlement procedure concludes, or 18 months after the initiation of the investigation, dispute settlement procedure concludes, or 18 months after the initiation of the investigation,
whichever is earlier.49 In other cases, a determination generally must be made within 12 months whichever is earlier.49 In other cases, a determination generally must be made within 12 months
of the initiation of an investigation. of the initiation of an investigation.
Actions
The USTR can take all appropriate and feasible action authorized under Section 301 “and all The USTR can take all appropriate and feasible action authorized under Section 301 “and all
other appropriate and feasible action within the power of the President that the President may other appropriate and feasible action within the power of the President that the President may
direct...direct... to obtain the elimination of that act, policy, or practice. Actions may be taken that are to obtain the elimination of that act, policy, or practice. Actions may be taken that are
within the power of the President with respect to trade in any goods or services, or with respect to within the power of the President with respect to trade in any goods or services, or with respect to
any other area of pertinent relations with the foreign country.”50 any other area of pertinent relations with the foreign country.”50
Section 301 divides such actions into mandatory and discretionary categories.51 Section 301 divides such actions into mandatory and discretionary categories.51
Mandatory Actions
The USTR is generally required to take action if it concludes that there is a trade agreement The USTR is generally required to take action if it concludes that there is a trade agreement
violation or that an act, policy, or practice of a foreign government is “unjustifiable” and “burdens violation or that an act, policy, or practice of a foreign government is “unjustifiable” and “burdens
or restricts” U.S. commerce.52 However, the law stipulates several instances in which the USTR or restricts” U.S. commerce.52 However, the law stipulates several instances in which the USTR
does not have to act. They include cases in which: does not have to act. They include cases in which:

47 15 47 15 ~~CFR~~C.F.R. § 2006.7(b). If requested, such hearing should generally take place after at least 30 days’ notice or within 30 § 2006.7(b). If requested, such hearing should generally take place after at least 30 days’ notice or within 30
days after the determination of action is made if the USTR determines that expeditious action is required. days after the determination of action is made if the USTR determines that expeditious action is required.
48 19 U.S.C. § 2414(a)(1)(B). 48 19 U.S.C. § 2414(a)(1)(B).
49 19 U.S.C. § 2414(a)(2)(A). Different determination requirements apply to investigation initiated pursuant to 19 49 19 U.S.C. § 2414(a)(2)(A). Different determination requirements apply to investigation initiated pursuant to 19
U.S.C. § 2412(b)(2)(A) involving rights under the Agreement on Trade-Related Aspects of Intellectual Property Rights U.S.C. § 2412(b)(2)(A) involving rights under the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS, 19 U.S.C. § 3511(d)(15)) or the General Agreement on Tariffs and Trade (GATT) 1994 (19 U.S.C. § (TRIPS, 19 U.S.C. § 3511(d)(15)) or the General Agreement on Tariffs and Trade (GATT) 1994 (19 U.S.C. §
3501(1)(B)) relating to products subject to intellectual property protection. 3501(1)(B)) relating to products subject to intellectual property protection.
50 19 U.S.C. § 2411(a)(1)(B)(ii) and 19 U.S.C. § 2411(b)(2). 50 19 U.S.C. § 2411(a)(1)(B)(ii) and 19 U.S.C. § 2411(b)(2).
51 The Omnibus Trade and Competitiveness Act of 1988 divided actions into mandatory (19 U.S.C. § 2411(a)) and 51 The Omnibus Trade and Competitiveness Act of 1988 divided actions into mandatory (19 U.S.C. § 2411(a)) and
discretionary (19 U.S.C. § 2411(b)). discretionary (19 U.S.C. § 2411(b)).
52 19 U.S.C. § 2411(a)(1). 52 19 U.S.C. § 2411(a)(1).
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(1) the WTO Dispute Settlement Body (DSB) has adopted a formal dispute settlement report (1) the WTO Dispute Settlement Body (DSB) has adopted a formal dispute settlement report
that concludes that the trade policy or practice in question does not violate or is not that concludes that the trade policy or practice in question does not violate or is not
inconsistent with WTO Agreements;53 inconsistent with WTO Agreements;53
(2) the USTR determines that the foreign country subject to investigation is taking (2) the USTR determines that the foreign country subject to investigation is taking
satisfactory measures to grant U.S. rights under a trade agreement;54 satisfactory measures to grant U.S. rights under a trade agreement;54
(3) the foreign country subject to investigation enters into a binding agreement that commits (3) the foreign country subject to investigation enters into a binding agreement that commits
it to stop the practice or phase out the policy,55 find a solution that eliminates the burden on it to stop the practice or phase out the policy,55 find a solution that eliminates the burden on
U.S. commerce,56 or provide compensatory trade benefits to the United States;57 or U.S. commerce,56 or provide compensatory trade benefits to the United States;57 or
(4) the USTR determines that taking action would either have an adverse impact on the U.S. (4) the USTR determines that taking action would either have an adverse impact on the U.S.
economy (substantially out of proportion to the benefits of any action taken)58 or cause economy (substantially out of proportion to the benefits of any action taken)58 or cause
serious harm to U.S. national security.59 serious harm to U.S. national security.59
Discretionary Actions
The USTR has discretion to take action—if it deems doing so appropriate—in those instances in The USTR has discretion to take action—if it deems doing so appropriate—in those instances in
which “an act, policy, or practice of a foreign country is unreasonable or discriminatory.”60 In which “an act, policy, or practice of a foreign country is unreasonable or discriminatory.”60 In
both cases, such practices must burden or restrict U.S. commerce. Any such action would be both cases, such practices must burden or restrict U.S. commerce. Any such action would be
subject to the specific direction, if any, of the President. subject to the specific direction, if any, of the President.
Retaliation
To remedy a foreign trade practice, Section 301 authorizes the USTR to (1) impose duties (i.e., To remedy a foreign trade practice, Section 301 authorizes the USTR to (1) impose duties (i.e.,
tariffs) or other import restrictions,61 (2) withdraw or suspend trade agreement concessions,62 or tariffs) or other import restrictions,61 (2) withdraw or suspend trade agreement concessions,62 or
(3) enter into a binding agreement with the foreign government to either eliminate the conduct in (3) enter into a binding agreement with the foreign government to either eliminate the conduct in
question (or the burden to U.S. commerce) or compensate the United States with satisfactory question (or the burden to U.S. commerce) or compensate the United States with satisfactory
trade benefits.63 The USTR must give preference to duties or tariffs if action is taken in the form trade benefits.63 The USTR must give preference to duties or tariffs if action is taken in the form
of import restrictions.64 of import restrictions.64

53 19 U.S.C. § 2411(a)(2)(A). 53 19 U.S.C. § 2411(a)(2)(A).
54 19 U.S.C. § 2411(a)(2)(B)(i). 54 19 U.S.C. § 2411(a)(2)(B)(i).
55 19 U.S.C. § 2411(a)(2)(B)(ii)(I). 55 19 U.S.C. § 2411(a)(2)(B)(ii)(I).
56 19 U.S.C. § 2411(a)(2)(B)(ii)(II). 56 19 U.S.C. § 2411(a)(2)(B)(ii)(II).
57 19 U.S.C. § 2411(a)(2)(B)(iii). 19 U.S.C. § 2411(c)(4) stipulates that the agreement should “provide compensatory 57 19 U.S.C. § 2411(a)(2)(B)(iii). 19 U.S.C. § 2411(c)(4) stipulates that the agreement should “provide compensatory
trade benefits that benefit the economic sector which includes the domestic industry that would benefit from the trade benefits that benefit the economic sector which includes the domestic industry that would benefit from the
elimination of the act, policy, or practice that is the subject of theelimination of the act, policy, or practice that is the subject of the ...... [investigation], or benefit the economic sector as [investigation], or benefit the economic sector as
closely related as possible to such economic sector, unless (A) the provision of such trade benefits is not feasible, or (B) closely related as possible to such economic sector, unless (A) the provision of such trade benefits is not feasible, or (B)
trade benefits that benefit any other economic sector would be more satisfactory than such trade benefits.” trade benefits that benefit any other economic sector would be more satisfactory than such trade benefits.”
58 19 U.S.C. § 2411(a)(2)(B)(iv). 58 19 U.S.C. § 2411(a)(2)(B)(iv).
59 19 U.S.C. § 2411(a)(2)(B)(v). 59 19 U.S.C. § 2411(a)(2)(B)(v).
60 19 U.S.C. § 2411(b). 60 19 U.S.C. § 2411(b).
61 19 U.S.C. § 2411(c)(1)(B). An import restriction, other than a duty, may include “a limitation, prohibition, charge, or 61 19 U.S.C. § 2411(c)(1)(B). An import restriction, other than a duty, may include “a limitation, prohibition, charge, or
exaction other than duty, imposed on importation or imposed for the regulation of importation. The term does not exaction other than duty, imposed on importation or imposed for the regulation of importation. The term does not
include any orderly marketing agreement” (19 U.S.C. § 2481(2)). include any orderly marketing agreement” (19 U.S.C. § 2481(2)).
62 19 U.S.C. § 2411(c)(1)(A). The USTR is also authorized to withdraw or suspend preferential duty treatment under 62 19 U.S.C. § 2411(c)(1)(A). The USTR is also authorized to withdraw or suspend preferential duty treatment under
the Generalized System of Preferences (GSP), the Caribbean Basin Initiative (CBI), or the Andean Trade Preferences the Generalized System of Preferences (GSP), the Caribbean Basin Initiative (CBI), or the Andean Trade Preferences
Act (19 U.S.C. § 2411(c)(1)(C)). Act (19 U.S.C. § 2411(c)(1)(C)).
63 19 U.S.C. § 2411(c)(1)(D). 63 19 U.S.C. § 2411(c)(1)(D).
64 19 U.S.C. § 2411(c)(5)(A). 64 19 U.S.C. § 2411(c)(5)(A).
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The USTR may also restrict the terms and conditions or deny the issuance of any “service sector The USTR may also restrict the terms and conditions or deny the issuance of any “service sector
access authorization” issued under U.S. federal law.65 Authorizations include licenses and permits access authorization” issued under U.S. federal law.65 Authorizations include licenses and permits
that allow a foreign supplier of services access to the U.S. market. Such action must be applied that allow a foreign supplier of services access to the U.S. market. Such action must be applied
prospectively to authorizations granted—or applications therefor pending—on or after the date on prospectively to authorizations granted—or applications therefor pending—on or after the date on
which a Section 301 petition is filed, or if the USTR self-initiates an investigation, the date on which a Section 301 petition is filed, or if the USTR self-initiates an investigation, the date on
which the investigation is initiated. Before imposing fees or restrictions, the USTR must consult which the investigation is initiated. Before imposing fees or restrictions, the USTR must consult
the federal or state agency involved in the regulation of the services. the federal or state agency involved in the regulation of the services.
The level of mandatory action under Section 301 should “affect goods or services of the foreign The level of mandatory action under Section 301 should “affect goods or services of the foreign
country in an amount equivalent in value to the burden or restriction being imposed by that country in an amount equivalent in value to the burden or restriction being imposed by that
country on” U.S. commerce.66 The USTR is authorized to take action against any goods or country on” U.S. commerce.66 The USTR is authorized to take action against any goods or
economic sector regardless of whether they were involved in the policy or practice that is the economic sector regardless of whether they were involved in the policy or practice that is the
subject of such action.67 subject of such action.67
Implementation
Once the USTR makes a determination to take action under Section 301, the agency generally has Once the USTR makes a determination to take action under Section 301, the agency generally has
30 days to implement that action. The USTR may delay, by not more than 180 days, 30 days to implement that action. The USTR may delay, by not more than 180 days,
implementation if: (1) either the petitioner or a majority of the representatives of a domestic implementation if: (1) either the petitioner or a majority of the representatives of a domestic
industry that would benefit from the action requests a delay; or (2) the USTR determines industry that would benefit from the action requests a delay; or (2) the USTR determines
substantial progress is being made, or that a delay is necessary or desirable, to obtain a substantial progress is being made, or that a delay is necessary or desirable, to obtain a
satisfactory solution with respect to the acts, policies, or practices that are the subject of the satisfactory solution with respect to the acts, policies, or practices that are the subject of the
action.68 action.68
Monitoring and Modifications of Actions
Sections 306 and 307 specify the requirements for monitoring, modifying, and terminating any Sections 306 and 307 specify the requirements for monitoring, modifying, and terminating any
action taken under Section 301. In particular, the USTR is required to monitor the implementation action taken under Section 301. In particular, the USTR is required to monitor the implementation
of any measure undertaken or agreement that is entered into by a foreign country to provide a of any measure undertaken or agreement that is entered into by a foreign country to provide a
satisfactory resolution of a matter subject to a Section 301 investigation. If the USTR considers satisfactory resolution of a matter subject to a Section 301 investigation. If the USTR considers
that a foreign country is not satisfactorily implementing such measure or agreement, the agency that a foreign country is not satisfactorily implementing such measure or agreement, the agency
has to determine what further action it will take.69 has to determine what further action it will take.69
The USTR may modify or terminate any action, subject to the specific direction, if any, of the The USTR may modify or terminate any action, subject to the specific direction, if any, of the
President, if among other things, the WTO DSB determines that the rights of the United States President, if among other things, the WTO DSB determines that the rights of the United States
under a trade agreement are not being denied, the burden or restriction on U.S. commerce has under a trade agreement are not being denied, the burden or restriction on U.S. commerce has

65 19 U.S.C. § 2411(c)(2). The statute does not specify the services against which the USTR can take action under 65 19 U.S.C. § 2411(c)(2). The statute does not specify the services against which the USTR can take action under
Section 301. In addition, there is no precedent for that type of action. However, some trade and legal scholars—with Section 301. In addition, there is no precedent for that type of action. However, some trade and legal scholars—with
whom CRS spoke about Section 301—noted that the USTR might be able to impose restrictions on federal licenses and whom CRS spoke about Section 301—noted that the USTR might be able to impose restrictions on federal licenses and
permits for some of the following services-related activities: agriculture, alcohol beverages, animal feed and drugs, permits for some of the following services-related activities: agriculture, alcohol beverages, animal feed and drugs,
aviation, biological products, customs brokerage, debt collection, import/export, firearms, ammunition and explosives, aviation, biological products, customs brokerage, debt collection, import/export, firearms, ammunition and explosives,
fish and wildlife, food products, investment brokers/dealers/companies, medical device manufacturing, nuclear energy/ fish and wildlife, food products, investment brokers/dealers/companies, medical device manufacturing, nuclear energy/
radiation-emitting products, pharmaceuticals, telecommunications/radio/television broadcasting, tobacco, and radiation-emitting products, pharmaceuticals, telecommunications/radio/television broadcasting, tobacco, and
transportation and logistics. transportation and logistics.
66 19 U.S.C. § 2411(a)(3). 66 19 U.S.C. § 2411(a)(3).
67 19 U.S.C. § 2411(c)(3). 67 19 U.S.C. § 2411(c)(3).
68 There are other exceptions to implementing timelines, particularly for cases of export targeting. For more detail, see 68 There are other exceptions to implementing timelines, particularly for cases of export targeting. For more detail, see
19 U.S.C. § 2415(a)(2)(B)-(C) and 19 U.S.C. § 2415(b). 19 U.S.C. § 2415(a)(2)(B)-(C) and 19 U.S.C. § 2415(b).
69 19 U.S.C. § 2416(b)(1). 69 19 U.S.C. § 2416(b)(1).
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increased or decreased, or such action is no longer appropriate.70 The USTR considers foreign increased or decreased, or such action is no longer appropriate.70 The USTR considers foreign
noncompliance with a measure or agreement undertaken as a result of a Section 301 investigation noncompliance with a measure or agreement undertaken as a result of a Section 301 investigation
a violation of an agreement under Section 301 and is subject to mandatory retaliatory action. a violation of an agreement under Section 301 and is subject to mandatory retaliatory action.
Section 301 actions terminate automatically after four years,71 unless the USTR receives a request Section 301 actions terminate automatically after four years,71 unless the USTR receives a request
for continuation and conducts a review of the case.72 for continuation and conducts a review of the case.72
In some cases, the USTR may reinstate a previously terminated Section 301 action. The Trade In some cases, the USTR may reinstate a previously terminated Section 301 action. The Trade
Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), for example, amended Section Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125), for example, amended Section
306 of the Trade Act of 1974 to authorize the USTR to reinstate such actions in order to exercise 306 of the Trade Act of 1974 to authorize the USTR to reinstate such actions in order to exercise
WTO authorization to suspend concessions or other obligations.73 The USTR may do so WTO authorization to suspend concessions or other obligations.73 The USTR may do so
following: (1) a request from the petitioner or any representative of the domestic industry that following: (1) a request from the petitioner or any representative of the domestic industry that
would benefit from reinstatement of the action; (2) consultations with the petitioner, if any, would benefit from reinstatement of the action; (2) consultations with the petitioner, if any,
involved in the initial investigation and opportunity for the presentation of views by interested involved in the initial investigation and opportunity for the presentation of views by interested
persons; and (3) a review of the effectiveness of the action (or any other actions that could be persons; and (3) a review of the effectiveness of the action (or any other actions that could be
taken to achieve the objectives of Section 301) and its impact on the U.S. economy. taken to achieve the objectives of Section 301) and its impact on the U.S. economy.
Information Open to Public Inspection
Any interested person may generally request to review written petitions, briefs, or similar Any interested person may generally request to review written petitions, briefs, or similar
information (other than that to which confidentiality applies) submitted in the course of an information (other than that to which confidentiality applies) submitted in the course of an
investigation, as well as records of public hearings (see investigation, as well as records of public hearings (see textbox).74 ).74

70 19 U.S.C. § 2411(a)(2). 70 19 U.S.C. § 2411(a)(2).
71 19 U.S.C. § 2417(c)(1) provides that if a Section 301 action has been taken by the USTR during any four-year period 71 19 U.S.C. § 2417(c)(1) provides that if a Section 301 action has been taken by the USTR during any four-year period
(e.g., the imposition of increased tariffs on the products of a foreign country) and neither the petitioner nor any (e.g., the imposition of increased tariffs on the products of a foreign country) and neither the petitioner nor any
representative of the domestic industry benefitting from the action has submitted to the USTR during the last 60 days of representative of the domestic industry benefitting from the action has submitted to the USTR during the last 60 days of
the four-year period a written request for the continuation of the action, the action is to terminate at the end of the four-the four-year period a written request for the continuation of the action, the action is to terminate at the end of the four-
year period. year period.
72 19 U.S.C. § 2417(c)(3). 72 19 U.S.C. § 2417(c)(3).
73 19 U.S.C. § 2416(c). 73 19 U.S.C. § 2416(c).
74 The term “interested persons,” for the purposes of 19 U.S.C. §§ 2412, 2414, 2416, and 2417, includes, but is not 74 The term “interested persons,” for the purposes of 19 U.S.C. §§ 2412, 2414, 2416, and 2417, includes, but is not
limited to, domestic firms and workers, representatives of consumer interests, U.S. product exporters, and any limited to, domestic firms and workers, representatives of consumer interests, U.S. product exporters, and any
industrial user of any goods or services that may be affected by actions taken pursuant to 19 U.S.C. § 2411. The term industrial user of any goods or services that may be affected by actions taken pursuant to 19 U.S.C. § 2411. The term
“person” refers to “any individual, partnership, corporation, association, organization, business trust, government “person” refers to “any individual, partnership, corporation, association, organization, business trust, government
entity, or other entity subject to the jurisdiction of the United States” (19 U.S.C. § 1683(8)). entity, or other entity subject to the jurisdiction of the United States” (19 U.S.C. § 1683(8)).
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Public Inspection of Information
On written request and subject to availability, any person may obtain the fol owing information from the Office of On written request and subject to availability, any person may obtain the fol owing information from the Office of
the USTR or other federal agencies: the USTR or other federal agencies:
 
the nature and extent of a specific trade policy or practice of a foreign government or instrumentality with the nature and extent of a specific trade policy or practice of a foreign government or instrumentality with
respect to particular goods, services, investment, or IPR; respect to particular goods, services, investment, or IPR;
 
U.S. rights under any trade agreement and the remedies which may be available under that agreement and U.S. rights under any trade agreement and the remedies which may be available under that agreement and
under the laws of the United States; and under the laws of the United States; and
 
past and present domestic and international proceedings or actions with respect to the policy or practice past and present domestic and international proceedings or actions with respect to the policy or practice
concerned. concerned.
If the Office of the USTR does not have, and cannot obtain from other federal agencies, the information requested, If the Office of the USTR does not have, and cannot obtain from other federal agencies, the information requested,
the USTR is required to request the information from the foreign government involved or decline to request the the USTR is required to request the information from the foreign government involved or decline to request the
information and inform the person in writing of the reasons for the refusal. information and inform the person in writing of the reasons for the refusal.
The USTR is authorized to exempt from public inspection business information submitted in confidence if it The USTR is authorized to exempt from public inspection business information submitted in confidence if it
determines that such information involves trade secrets or commercial and financial information whose disclosure determines that such information involves trade secrets or commercial and financial information whose disclosure
is not authorized by the person furnishing it or required by law. Nevertheless, the USTR may use such information, is not authorized by the person furnishing it or required by law. Nevertheless, the USTR may use such information,
or at its own discretion, make it available to any federal employee for use in any Section 301 investigation or to any or at its own discretion, make it available to any federal employee for use in any Section 301 investigation or to any
other person in a form that cannot be associated with, or otherwise identify, the person providing the information. other person in a form that cannot be associated with, or otherwise identify, the person providing the information.
Source: Adapted from 15 Adapted from 15 ~~CFR~~C.F.R. §§ 2006.13 and 2006.15, 19 U.S.C. § 2418. §§ 2006.13 and 2006.15, 19 U.S.C. § 2418.
“Carousel” Retaliation
Section 306 of the Trade Act of 1974 requires the USTR to periodically revise (e.g., rotate) the Section 306 of the Trade Act of 1974 requires the USTR to periodically revise (e.g., rotate) the
list of products subject to retaliation (e.g., tariff or other trade restriction) when the targeted list of products subject to retaliation (e.g., tariff or other trade restriction) when the targeted
foreign government does not implement a recommendation made pursuant to a dispute settlement foreign government does not implement a recommendation made pursuant to a dispute settlement
proceeding under the WTO.75 This periodic revision is known as “carousel” retaliation, and the proceeding under the WTO.75 This periodic revision is known as “carousel” retaliation, and the
intent of rotating products (and/or increasing the level of additional duties) is to exert pressure on intent of rotating products (and/or increasing the level of additional duties) is to exert pressure on
the foreign government, through its domestic exporters, to change its position on the disputed the foreign government, through its domestic exporters, to change its position on the disputed
practice.76 The USTR has 120 days after the date in which an action is first taken (and every 180 practice.76 The USTR has 120 days after the date in which an action is first taken (and every 180
days thereafter) to review the list of products or action and revise it—in whole or in part.77 In days thereafter) to review the list of products or action and revise it—in whole or in part.77 In
revising any list or action, the USTR is required to act in a manner that is most likely to result in revising any list or action, the USTR is required to act in a manner that is most likely to result in
the targeted government implementing the WTO DSB’s recommendations or achieving a the targeted government implementing the WTO DSB’s recommendations or achieving a
mutually satisfactory solution to the issue(s) raised. The law does not require a revision if the mutually satisfactory solution to the issue(s) raised. The law does not require a revision if the
USTR determines that compliance is imminent or agrees with the affected U.S. industry that USTR determines that compliance is imminent or agrees with the affected U.S. industry that
revising the list is not necessary. revising the list is not necessary.
The impetus for more pressure on foreign governments came during the 1990s, when many The impetus for more pressure on foreign governments came during the 1990s, when many
Members of Congress expressed concern over the effectiveness of the WTO dispute settlement Members of Congress expressed concern over the effectiveness of the WTO dispute settlement

75 19 U.S.C. § 2416. 75 19 U.S.C. § 2416.
76 In 1999, Senator Mike DeWine introduced the “Carousel Retaliation Act” as an amendment to Section 306 of the 76 In 1999, Senator Mike DeWine introduced the “Carousel Retaliation Act” as an amendment to Section 306 of the
Trade Act of 1974. For more detail, see S. 1619, “A bill to amend the Trade Act of 1974 to provide for periodic Trade Act of 1974. For more detail, see S. 1619, “A bill to amend the Trade Act of 1974 to provide for periodic
revision of retaliation lists or other remedial action implemented under section 306 of such Act,” 106th Congress, revision of retaliation lists or other remedial action implemented under section 306 of such Act,” 106th Congress,
introduced on September 22, 1999. As noted by Senator DeWine, the “Carousel Retaliation Act” was meant to increase introduced on September 22, 1999. As noted by Senator DeWine, the “Carousel Retaliation Act” was meant to increase
pressure on U.S. trading partners to comply with WTO rules by requiring the USTR to rotate or carousel retaliation pressure on U.S. trading partners to comply with WTO rules by requiring the USTR to rotate or carousel retaliation
lists. (lists. (Congressional Record, Senate, 106th Congress, 1st Session, October 13, 1999, Vol. 145, No. 138, p. S12491.) , Senate, 106th Congress, 1st Session, October 13, 1999, Vol. 145, No. 138, p. S12491.)
77 The USTR is authorized to take action against any goods or economic sector regardless of whether such goods or 77 The USTR is authorized to take action against any goods or economic sector regardless of whether such goods or
sector were involved in the policy or practice that is the subject of such action. The agency must give preference to sector were involved in the policy or practice that is the subject of such action. The agency must give preference to
duties or tariffs if action is taken in the form of import restrictions, and it may also restrict the terms and conditions or duties or tariffs if action is taken in the form of import restrictions, and it may also restrict the terms and conditions or
deny the issuance of any “service sector access authorization” issued under U.S. federal law. deny the issuance of any “service sector access authorization” issued under U.S. federal law.
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process to convince other countries to remove various trade barriers.78 In particular, congressional process to convince other countries to remove various trade barriers.78 In particular, congressional
concern over the European Union (EU)’s noncompliance with WTO dispute rulings led to the concern over the European Union (EU)’s noncompliance with WTO dispute rulings led to the
amendment of Section 306 of the Trade Act of 1974 with the enactment of the Trade and amendment of Section 306 of the Trade Act of 1974 with the enactment of the Trade and
Development Act of 2000 (P.L. 106-200). Two WTO dispute cases—the U.S.-EU beef hormone79 Development Act of 2000 (P.L. 106-200). Two WTO dispute cases—the U.S.-EU beef hormone79
and banana80 disputes—particularly frustrated many policymakers and U.S. exporters, because of and banana80 disputes—particularly frustrated many policymakers and U.S. exporters, because of
the length of time to decide the cases and the unlikelihood that the losing party would change its the length of time to decide the cases and the unlikelihood that the losing party would change its
practices.81 practices.81
In response to the Section 306 amendment, the EU filed a WTO complaint challenging the In response to the Section 306 amendment, the EU filed a WTO complaint challenging the
statutory provision shortly after its enactment in 2000.82 It alleged that the statute mandates statutory provision shortly after its enactment in 2000.82 It alleged that the statute mandates
unilateral action and the taking of retaliatory action, other than that which had been authorized by unilateral action and the taking of retaliatory action, other than that which had been authorized by
the WTO, in violation of the Dispute Settlement Understanding.83 Specifically, the EU considered the WTO, in violation of the Dispute Settlement Understanding.83 Specifically, the EU considered
that Section 306: (1) was “in breach of the DSU since it mandates unilateral action without any that Section 306: (1) was “in breach of the DSU since it mandates unilateral action without any
prior multilateral control”; (2) could lead the United States to unilaterally modify at will “all U.S. prior multilateral control”; (2) could lead the United States to unilaterally modify at will “all U.S.
concessions bound in its Schedule of commitments under the GATT 1994; (3) was “in breach of concessions bound in its Schedule of commitments under the GATT 1994; (3) was “in breach of
the obligation of equivalence”; and (4) “affect[ed] the security and predictability of the the obligation of equivalence”; and (4) “affect[ed] the security and predictability of the
multilateral trading system.”84 Because the United States had not invoked the provision, the EU multilateral trading system.”84 Because the United States had not invoked the provision, the EU
refrained from requesting the establishment of a WTO panel in the case, thereby leaving the issue refrained from requesting the establishment of a WTO panel in the case, thereby leaving the issue
of its legality in question. of its legality in question.
In December 2008, the United States exercised “carousel” authorities to propose modifications to In December 2008, the United States exercised “carousel” authorities to propose modifications to
the list of EU products subject to the WTO-authorized tariff surcharges that it had originally the list of EU products subject to the WTO-authorized tariff surcharges that it had originally
imposed in the beef hormones case. A final modified list was published in January 2009.85 imposed in the beef hormones case. A final modified list was published in January 2009.85
~~Originally applicable to all covered goods entering the United States on or after March 2009, the~~

78 See, for example, Congressional Record, “Statements on Introduced78 See, for example, Congressional Record, “Statements on Introduced Bills and Joint Resolutions,” Vol. 145, No. 124, Bills and Joint Resolutions,” Vol. 145, No. 124,
pp. S11260-S11262, September 22, 1999, and S. 1619, “A bill to amend the Trade Act of 1974 to provide for periodic pp. S11260-S11262, September 22, 1999, and S. 1619, “A bill to amend the Trade Act of 1974 to provide for periodic
revision of retaliation lists or other remedial action implemented under section 306 of such Act,” introduced on revision of retaliation lists or other remedial action implemented under section 306 of such Act,” introduced on
September 22, 1999. September 22, 1999.
79 Specifically, “European Communities-Measures Concerning Meat and Meat Products” (WTO Cases DS26 and 79 Specifically, “European Communities-Measures Concerning Meat and Meat Products” (WTO Cases DS26 and
DS48). Since 1989, the United States and the EU have engaged in a long-standing dispute over the EUDS48). Since 1989, the United States and the EU have engaged in a long-standing dispute over the EU'’s decision to ban s decision to ban
hormone-treated meat. For more detail, see CRS In Focus IF10958, hormone-treated meat. For more detail, see CRS In Focus IF10958, U.S. Trade Debates: Select Disputes and Actions, ,
by Andres B. Schwarzenberg and CRS Report R40449, by Andres B. Schwarzenberg and CRS Report R40449, The U.S.-EU Beef Hormone Dispute, by Renée Johnson. , by Renée Johnson.
80 Specifically, “European Communities-Regime for the Importation, Sale and Distribution of Bananas” (WTO Case 80 Specifically, “European Communities-Regime for the Importation, Sale and Distribution of Bananas” (WTO Case
DS27). During the 1990s, the EU banana import regime was a primary source of U.S.-EU trade tension. The regime, DS27). During the 1990s, the EU banana import regime was a primary source of U.S.-EU trade tension. The regime,
instituted in 1993, granted preferential treatment to bananas from producers in the EU and former European colonies, instituted in 1993, granted preferential treatment to bananas from producers in the EU and former European colonies,
which adversely affected U.S. banana firms. For more detail, see CRS In Focus IF10958, which adversely affected U.S. banana firms. For more detail, see CRS In Focus IF10958, U.S. Trade Debates: Select
Disputes and Actions, by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
81 See, for example, 81 See, for example, Congressional Record, Senate, 106th Congress, 1st Session, October 13, 199, Vol. 145, No. 138, p. , Senate, 106th Congress, 1st Session, October 13, 199, Vol. 145, No. 138, p.
S12491. S12491.
82 For more detail, see WTO Case “DS200: United States—Section 306 of the Trade Act of 1974 and Amendments 82 For more detail, see WTO Case “DS200: United States—Section 306 of the Trade Act of 1974 and Amendments
Thereto.” Thereto.”
83 In particular, the EU considered that Section 306, “as amended by Section 407 of the Trade and Development Act of 83 In particular, the EU considered that Section 306, “as amended by Section 407 of the Trade and Development Act of
2000, is inconsistent with, in particular, the following WTO provisions: Articles 3.2, 21.5, 22 and 23 of the DSU; 2000, is inconsistent with, in particular, the following WTO provisions: Articles 3.2, 21.5, 22 and 23 of the DSU;
Article XVI:4 of the WTO Agreement; and Articles I, II and XI of the GATT 1994.” WTO, “DS200: United States—Article XVI:4 of the WTO Agreement; and Articles I, II and XI of the GATT 1994.” WTO, “DS200: United States—
Section 306 of the Trade Act of 1974 and Amendments Thereto.” Section 306 of the Trade Act of 1974 and Amendments Thereto.”
84 WTO, “DS200: United States—Section 306 of the Trade Act of 1974 and Amendments Thereto.” The EU contended 84 WTO, “DS200: United States—Section 306 of the Trade Act of 1974 and Amendments Thereto.” The EU contended
that Section 306 was “in breach of the obligation of equivalence, in that it create[ed] a structural imbalance between the that Section 306 was “in breach of the obligation of equivalence, in that it create[ed] a structural imbalance between the
cumulative level of the suspension of concessions and the level of nullification and impairment as determined under cumulative level of the suspension of concessions and the level of nullification and impairment as determined under
relevant DSU procedures.” relevant DSU procedures.”
85 Office of the USTR, “Modification of Action Taken in Connection With WTO Dispute Settlement Proceedings on 85 Office of the USTR, “Modification of Action Taken in Connection With WTO Dispute Settlement Proceedings on
the European Communities’ Ban on Imports of U.S. Beef and Beef Products,” 74the European Communities’ Ban on Imports of U.S. Beef and Beef Products,” 74 Federal Register 4265, January 23, 4265, January 23,
2009. 2009.
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link to page 35 link to page 35 link to page 35 link to page 35 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Originally applicable to all covered goods entering the United States on or after March 2009, the revisions removed some products from the original list, added new products to the list, modified revisions removed some products from the original list, added new products to the list, modified
coverage with regard to certain EU member states, and coverage with regard to certain EU member states, and n increased to 300% increased to 300% ad valorem duties on duties on
one product (Roquefort cheese).86 The EU announced in January 2009 that it had decided to “start one product (Roquefort cheese).86 The EU announced in January 2009 that it had decided to “start
preparations” to pursue WTO dispute settlement regarding the carousel statute, stating that it preparations” to pursue WTO dispute settlement regarding the carousel statute, stating that it
“breaches the WTO requirement of equivalence between the damage caused by the sanction or “breaches the WTO requirement of equivalence between the damage caused by the sanction or
ban and the retaliation proposed.”87 In May 2009, following a series of negotiations, the United ban and the retaliation proposed.”87 In May 2009, following a series of negotiations, the United
States and the EU signed a memorandum of understanding (MOU), which phased in certain States and the EU signed a memorandum of understanding (MOU), which phased in certain
changes over the next several years.88 As part of this MOU, the EU granted new market access to changes over the next several years.88 As part of this MOU, the EU granted new market access to
U.S. exports of beef raised without the use of growth hormones, and the United States suspended U.S. exports of beef raised without the use of growth hormones, and the United States suspended
its retaliatory tariffs on certain EU products. In September 2009, USTR announced it was its retaliatory tariffs on certain EU products. In September 2009, USTR announced it was
officially terminating its plan to rotate the list of products specific to the U.S.-EU beef hormone officially terminating its plan to rotate the list of products specific to the U.S.-EU beef hormone
dispute.89 dispute.89
More recently, the USTR has made use of “carousel” authorities to revise twice its Section 301 More recently, the USTR has made use of “carousel” authorities to revise twice its Section 301
action related to the enforcement of U.S. WTO rights in the “Large Civil Aircraft” dispute with action related to the enforcement of U.S. WTO rights in the “Large Civil Aircraft” dispute with
EU. (For more detail, see EU. (For more detail, see “European Union: Enforcement of U.S. WTO Rights in Large Civil
Aircraft Dispute.””) )
Intellectual Property Enforcement and Section 301
Congress’s enactment of Section 301 has been viewed to help U.S. negotiators secure Congress’s enactment of Section 301 has been viewed to help U.S. negotiators secure
commitments from foreign governments to help ensure that the interests of U.S. IPR holders are commitments from foreign governments to help ensure that the interests of U.S. IPR holders are
protected abroad. These laws also arguably provided impetus for many countries to adopt and protected abroad. These laws also arguably provided impetus for many countries to adopt and
enforce their own national IP laws. Because intellectual property rights (IPR) are national rather enforce their own national IP laws. Because intellectual property rights (IPR) are national rather
than international in scope, these can differ significantly from country to country. U.S. patent or than international in scope, these can differ significantly from country to country. U.S. patent or
copyright rights do not extend into foreign countries, and the United States does not enforce IPR copyright rights do not extend into foreign countries, and the United States does not enforce IPR
granted solely under foreign laws. While there are no international patents, trademarks, or granted solely under foreign laws. While there are no international patents, trademarks, or
copyrights, there are international conventions and treaties that establish a minimum standard of copyrights, there are international conventions and treaties that establish a minimum standard of
IP protection, including the Berne Convention for the Protection of Literary and Artistic Works90 IP protection, including the Berne Convention for the Protection of Literary and Artistic Works90
and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).91 and the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).91
The two principal U.S. laws addressing trade-related IPR violations are Section 337 of the Tariff The two principal U.S. laws addressing trade-related IPR violations are Section 337 of the Tariff
Act of 1930 and Section 301 of the Trade Act of 1974. Furthermore, the Omnibus Trade and Act of 1930 and Section 301 of the Trade Act of 1974. Furthermore, the Omnibus Trade and

86 Ibid. 86 Ibid.
87 European Commission, “EU Prepares WTO Action Over US Trade Sanction Law,” Press Release, January 15, 2009. 87 European Commission, “EU Prepares WTO Action Over US Trade Sanction Law,” Press Release, January 15, 2009.
88 WTO, “European Communities—Measures Concerning Meat And Meat Products (Hormones), Joint Communication 88 WTO, “European Communities—Measures Concerning Meat And Meat Products (Hormones), Joint Communication
from the European Communities and the United States,” WT/DS26/28, September 30, 2009; Office of the USTR, from the European Communities and the United States,” WT/DS26/28, September 30, 2009; Office of the USTR,
“Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 74“Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 74 Federal Register 40864, August 40864, August
13, 2009, and “Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 7413, 2009, and “Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 74 Federal Register
48808, September 24, 2009. 48808, September 24, 2009.
89 Office of the USTR, “Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 74 89 Office of the USTR, “Implementation of the U.S.-EC Beef Hormones Memorandum of Understanding,” 74 Federal
Register 48808, September 24, 2009. 48808, September 24, 2009.
90 The Berne Convention is an international copyright convention negotiated in 1886 and revised in 1991. The Berne 90 The Berne Convention is an international copyright convention negotiated in 1886 and revised in 1991. The Berne
Convention is administered by the World Intellectual Property Organization (WIPO, a specialized United Nations Convention is administered by the World Intellectual Property Organization (WIPO, a specialized United Nations
agency that also administers the Paris Convention), and is based on national treatment for works created by nationals of agency that also administers the Paris Convention), and is based on national treatment for works created by nationals of
other states. other states.
91 For more detail on the TRIPS Agreement, see WTO, “Overview: The TRIPS Agreement,” and CRS Report 91 For more detail on the TRIPS Agreement, see WTO, “Overview: The TRIPS Agreement,” and CRS Report
RL34292, RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias Akhtar, Ian F. Fergusson, and Liana , by Shayerah Ilias Akhtar, Ian F. Fergusson, and Liana
Wong. Wong.
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Competitiveness Act of 1988 substantially amended the IP provisions of the Tariff Act of 1930 Competitiveness Act of 1988 substantially amended the IP provisions of the Tariff Act of 1930
(see textbox) and strengthened Section 301 by creating “Special 301.” (see textbox) and strengthened Section 301 by creating “Special 301.”
Section 337: Unfair Practices in Import Trade
Section 337 of the Tariff Act of 1930 (19 U.S.C. §1337) prohibits unfair methods of competition or other unfair acts Section 337 of the Tariff Act of 1930 (19 U.S.C. §1337) prohibits unfair methods of competition or other unfair acts
in the importation of products into the United States. It also prohibitsin the importation of products into the United States. It also prohibits imports of articles that infringe valid U.S. imports of articles that infringe valid U.S.
patents, copyrights, processes, trademarks, semiconductor products produced by infringing a protected “mask patents, copyrights, processes, trademarks, semiconductor products produced by infringing a protected “mask
work” (e.g., integrated circuit designs), or protected design rights.92 While the statute has been used to counter work” (e.g., integrated circuit designs), or protected design rights.92 While the statute has been used to counter
imports of products judged to be produced by unfair competition, monopolistic, or anti-competitive practices, it has imports of products judged to be produced by unfair competition, monopolistic, or anti-competitive practices, it has
become increasingly used for its intellectual property rights (IPR) enforcement functions. Under the statute, the become increasingly used for its intellectual property rights (IPR) enforcement functions. Under the statute, the
import or sale of an infringing product is il egal only if a U.S. industry is producing an article covered by the relevant import or sale of an infringing product is il egal only if a U.S. industry is producing an article covered by the relevant
IPR or is in the process of establishing such production. Unlike other trade remedies, such as antidumping or IPR or is in the process of establishing such production. Unlike other trade remedies, such as antidumping or
countervailing duty actions, no showing of injury because of the import is required for statutory IP cases. countervailing duty actions, no showing of injury because of the import is required for statutory IP cases.
The U.S. International Trade Commission (USITC) administers Section 337 proceedings. The USITC investigates The U.S. International Trade Commission (USITC) administers Section 337 proceedings. The USITC investigates
complaints submitted to it, mainly by companies, and investigates concerns under its own initiative. An administrative complaints submitted to it, mainly by companies, and investigates concerns under its own initiative. An administrative
law judge provides an initial determination to the USITC, which can accept the initial determination or order a law judge provides an initial determination to the USITC, which can accept the initial determination or order a
further review of it in whole or in part. If the USITC finds a violation, it may issue two types of remedies: exclusion further review of it in whole or in part. If the USITC finds a violation, it may issue two types of remedies: exclusion
orders or cease and desist orders. orders or cease and desist orders.
 
Exclusion orders, enforced by the U.S. Customs and Border Protection (CBP), are issued by the USITC to , enforced by the U.S. Customs and Border Protection (CBP), are issued by the USITC to
stop infringing imports from entering the United States. Exclusion orders can be general or limited. General stop infringing imports from entering the United States. Exclusion orders can be general or limited. General
exclusion orders apply to all products that are found in violation of Section 337, regardless of source. Limited exclusion orders apply to all products that are found in violation of Section 337, regardless of source. Limited
exclusion orders apply to the goods originating from the specific firm(s) found to be in violation of Section 337. exclusion orders apply to the goods originating from the specific firm(s) found to be in violation of Section 337.
Limited exclusion orders typically are issued more commonly. The USITC issues general exclusion orders if Limited exclusion orders typically are issued more commonly. The USITC issues general exclusion orders if
such a broad-based exclusion is necessary to prevent the circumvention of the limited exclusion order, or if such a broad-based exclusion is necessary to prevent the circumvention of the limited exclusion order, or if
there is a pattern of violation and it is difficult to identify the source of infringing products. there is a pattern of violation and it is difficult to identify the source of infringing products.
 
Cease and desist orders, enforced by the USITC, require the firm to stop the sale of the infringing product in , enforced by the USITC, require the firm to stop the sale of the infringing product in
the United States. the United States.
The USITC may consider several public interest criteria during the proceedings and decline to issue a remedy. In The USITC may consider several public interest criteria during the proceedings and decline to issue a remedy. In
addition, the President may disapprove a remedial order during a 60-day review period for “policy reasons.” A addition, the President may disapprove a remedial order during a 60-day review period for “policy reasons.” A
presidential review of a remedial order often considers several relevant factors, includingpresidential review of a remedial order often considers several relevant factors, including “(1) public health and “(1) public health and
welfare; (2) competitive conditions in the U.S. economy; (3) production of competitive articles in the United States; welfare; (2) competitive conditions in the U.S. economy; (3) production of competitive articles in the United States;
(4) U.S. consumers; and (5) U.S. foreign relations, economic and political.” (4) U.S. consumers; and (5) U.S. foreign relations, economic and political.”

Source: Adapted from CRS Report RL34292, Adapted from CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias , by Shayerah Ilias
Akhtar, Ian F. Fergusson, and Liana Wong. Akhtar, Ian F. Fergusson, and Liana Wong.
Overview of “Special 301”
Section 301 is the principal U.S. statute for identifying foreign trade barriers that result from Section 301 is the principal U.S. statute for identifying foreign trade barriers that result from
inadequate IP protection. The Omnibus Trade and Competitiveness Act of 1988 strengthened inadequate IP protection. The Omnibus Trade and Competitiveness Act of 1988 strengthened
Section 301 by creating Special 301 provisions requiring the USTR to identify foreign countries Section 301 by creating Special 301 provisions requiring the USTR to identify foreign countries
that “deny adequate and effective protection of intellectual property rights” or “deny fair and that “deny adequate and effective protection of intellectual property rights” or “deny fair and
equitable market access to United States persons that rely upon intellectual property rights.”93 equitable market access to United States persons that rely upon intellectual property rights.”93

92 The Semiconductor Chip Protection Act of 1984 (P.L. 98-620) defines a “mask work” as “a series of related images, 92 The Semiconductor Chip Protection Act of 1984 (P.L. 98-620) defines a “mask work” as “a series of related images,
however fixed or encoded, (i) having or representing the predetermined, three-dimensional pattern of metallic, however fixed or encoded, (i) having or representing the predetermined, three-dimensional pattern of metallic,
insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; and (ii) in insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; and (ii) in
which series the relation of the images to one another is that each image has the pattern of the surface of one form of which series the relation of the images to one another is that each image has the pattern of the surface of one form of
the semiconductor chip product” (17 U.S.C. § 901(a)(2)). the semiconductor chip product” (17 U.S.C. § 901(a)(2)).
93 A foreign country denies 93 A foreign country denies adequate and effective protection of IPR if that country denies adequate and effective if that country denies adequate and effective
means under the laws of the foreign country for persons who are not citizens or nationals of such foreign country to means under the laws of the foreign country for persons who are not citizens or nationals of such foreign country to
secure, exercise, and enforce rights relating to patents, process patents, registered trademarks, copyrights, trade secrets, secure, exercise, and enforce rights relating to patents, process patents, registered trademarks, copyrights, trade secrets,
and mask works. In addition, a foreign country denies and mask works. In addition, a foreign country denies fair and equitable market access if that foreign country denies if that foreign country denies
access to a market for a product protected by a copyright or related right, patent, trademark, mask work, trade secret, or access to a market for a product protected by a copyright or related right, patent, trademark, mask work, trade secret, or
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

According to an amendment to Special 301 enacted in the 1994 Uruguay Round Agreements Act, According to an amendment to Special 301 enacted in the 1994 Uruguay Round Agreements Act,
the USTR can identify a country as denying sufficient IP protection even if the country is the USTR can identify a country as denying sufficient IP protection even if the country is
complying with its commitments under the WTO TRIPS Agreement. Congress also amended complying with its commitments under the WTO TRIPS Agreement. Congress also amended
Special 301 to direct the USTR to take into account, in its review process, the history of IP laws Special 301 to direct the USTR to take into account, in its review process, the history of IP laws
and practices of the foreign country, including any previous identification under “Special 301,” as and practices of the foreign country, including any previous identification under “Special 301,” as
well as the history of U.S. efforts—and the response of the foreign country—to achieve adequate well as the history of U.S. efforts—and the response of the foreign country—to achieve adequate
and effective IPR protection and enforcement. Most recently, the Trade Facilitation and Trade and effective IPR protection and enforcement. Most recently, the Trade Facilitation and Trade
Enforcement Act of 2015 (P.L. 114-125) directed USTR to monitor foreign countries’ protection Enforcement Act of 2015 (P.L. 114-125) directed USTR to monitor foreign countries’ protection
of trade secrets in addition to the other types of IPR that the agency was already monitoring. of trade secrets in addition to the other types of IPR that the agency was already monitoring.
Within 30 days of submitting the annual “National Trade Estimate Report on Foreign Trade Within 30 days of submitting the annual “National Trade Estimate Report on Foreign Trade
Barriers,” the USTR must determine which of the countries identified in the report are “Priority Barriers,” the USTR must determine which of the countries identified in the report are “Priority
Foreign Countries” (see Foreign Countries” (see textbox). According to Special 301 provisions, Priority Foreign ). According to Special 301 provisions, Priority Foreign
Countries are those that “have the most onerous or egregious acts, policies or practices that deny Countries are those that “have the most onerous or egregious acts, policies or practices that deny
intellectual property protection and limit market access to U.S. persons or firms depending on intellectual property protection and limit market access to U.S. persons or firms depending on
intellectual property rights protection” and “have the greatest adverse impact (actual or potential) intellectual property rights protection” and “have the greatest adverse impact (actual or potential)
on the relevant United States products.”94 The USTR cannot identify a country as Priority Foreign on the relevant United States products.”94 The USTR cannot identify a country as Priority Foreign
Country if it is found to be entering into good faith negotiations to address IP protection or Country if it is found to be entering into good faith negotiations to address IP protection or
making significant progress in improving its IP protection record. The USTR submits findings of making significant progress in improving its IP protection record. The USTR submits findings of
its review in the annual “Special 301 Report.” its review in the annual “Special 301 Report.”
“Special 301” Designations
The USTR can designate countries in one of several statutorily or administratively created categories: The USTR can designate countries in one of several statutorily or administratively created categories:
  Priority Foreign Country. A statutory category for those countries that the USTR designates as having “the most A statutory category for those countries that the USTR designates as having “the most
onerous or egregious acts, policies or practices that deny intellectual property protection and limit market access onerous or egregious acts, policies or practices that deny intellectual property protection and limit market access
to U.S. persons or firms depending on intellectual property rights protection” with the “greatest adverse impact to U.S. persons or firms depending on intellectual property rights protection” with the “greatest adverse impact
(actual or potential) on the relevant United States products.” The USTR may investigate these countries under (actual or potential) on the relevant United States products.” The USTR may investigate these countries under
Section 301. If the USTR names a country as a Priority Foreign Country, the agency must launch an investigation Section 301. If the USTR names a country as a Priority Foreign Country, the agency must launch an investigation
into that country’s IPR practices. The USTR may suspend trade concessions and impose import restrictions or into that country’s IPR practices. The USTR may suspend trade concessions and impose import restrictions or
duties, or enter into a binding agreement with the priority country that would eliminate the act, policy, or practice duties, or enter into a binding agreement with the priority country that would eliminate the act, policy, or practice
under scrutiny. Since the advent of the WTO, the United States has generally brought IPR-related cases to the under scrutiny. Since the advent of the WTO, the United States has generally brought IPR-related cases to the
WTO rather than investigate or retaliate unilaterally. WTO rather than investigate or retaliate unilaterally.
  Priority Watch List. An administrative category that the USTR created for those countries whose acts, policies, An administrative category that the USTR created for those countries whose acts, policies,
and practices warrant concern, but who do not meet all of the criteria for identification as a Priority Foreign and practices warrant concern, but who do not meet all of the criteria for identification as a Priority Foreign
Country. The USTR may place a country on the Priority Watch List if the country lacks proper IP protection and Country. The USTR may place a country on the Priority Watch List if the country lacks proper IP protection and
has a market of significant U.S. interest. After placing a country on the Priority Watch List, the USTR must develop has a market of significant U.S. interest. After placing a country on the Priority Watch List, the USTR must develop
an action plan with respect to that country. If the President, in consultation with USTR, determines that the foreign an action plan with respect to that country. If the President, in consultation with USTR, determines that the foreign
country fails to meet the action plan benchmarks, then the President may take appropriate action with respect to country fails to meet the action plan benchmarks, then the President may take appropriate action with respect to
that country. that country.
  Watch List. An administrative category that the USTR created to designate countries that have IP protection An administrative category that the USTR created to designate countries that have IP protection
inadequacies that are less severe than those on the Priority Watch List but stil require U.S. attention. inadequacies that are less severe than those on the Priority Watch List but stil require U.S. attention.
  Section 306 Monitoring. A tool that the USTR uses to monitor countries for compliance with bilateral IP A tool that the USTR uses to monitor countries for compliance with bilateral IP
agreements that resolve investigations initiated under Section 301. agreements that resolve investigations initiated under Section 301.
  Out-of-Cycle Review. A tool that the USTR uses to monitor countries’ progress on IP issues, and which may A tool that the USTR uses to monitor countries’ progress on IP issues, and which may
result in countries’ status changes for the fol owing year’s Special 301 report. In 2010, the USTR also began result in countries’ status changes for the fol owing year’s Special 301 report. In 2010, the USTR also began

plant breeder’s right, through the use of laws, procedures, practices, or regulations which violate provisions of plant breeder’s right, through the use of laws, procedures, practices, or regulations which violate provisions of
international law or international agreements to which both the United States and the foreign country are parties, or international law or international agreements to which both the United States and the foreign country are parties, or
constitute discriminatory nontariff trade barriers. Finally, the term “persons that rely upon intellectual property constitute discriminatory nontariff trade barriers. Finally, the term “persons that rely upon intellectual property
protection” means persons involved in the creation, production or licensing of works of authorship that are copyrighted, protection” means persons involved in the creation, production or licensing of works of authorship that are copyrighted,
or the manufacture of products that are patented or for which there are process patents. For more detail, see 19 U.S.C. § or the manufacture of products that are patented or for which there are process patents. For more detail, see 19 U.S.C. §
2242. 2242.
94 19 U.S.C. § 2242. 94 19 U.S.C. § 2242.
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publishing annually the Notorious Markets List as an out-of-cycle review, separately from the annual Special 301 publishing annually the Notorious Markets List as an out-of-cycle review, separately from the annual Special 301
Report. The List identifies online and physical markets “that reportedly engage in, facilitate, turn a blind eye to, or Report. The List identifies online and physical markets “that reportedly engage in, facilitate, turn a blind eye to, or
benefit from substantial copyright piracy and trademark counterfeiting.” benefit from substantial copyright piracy and trademark counterfeiting.”

Source: Adapted from CRS Report RL34292, Adapted from CRS Report RL34292, Intellectual Property Rights and International Trade, by Shayerah Ilias , by Shayerah Ilias
Akhtar, Ian F. Fergusson, and Liana Wong. Akhtar, Ian F. Fergusson, and Liana Wong.
If the USTR names a country as a Priority Foreign Country, the agency must launch an If the USTR names a country as a Priority Foreign Country, the agency must launch an
investigation into that country’s IPR practices. The agency conducts this investigation in a investigation into that country’s IPR practices. The agency conducts this investigation in a
manner similar to a Section 301 investigation. If it finds that the practices under investigation are manner similar to a Section 301 investigation. If it finds that the practices under investigation are
actionable under Section 301, then the USTR can seek to negotiate and enter into a binding actionable under Section 301, then the USTR can seek to negotiate and enter into a binding
agreement with the foreign country. Such an agreement can commit the country to address or agreement with the foreign country. Such an agreement can commit the country to address or
eliminate the practices or policies under investigation or provide compensation to the United eliminate the practices or policies under investigation or provide compensation to the United
States. Absent mutual resolution, the United States can impose retaliatory trade measures (e.g., States. Absent mutual resolution, the United States can impose retaliatory trade measures (e.g.,
tariffs), but then the foreign country could pursue WTO dispute settlement or retaliate by tariffs), but then the foreign country could pursue WTO dispute settlement or retaliate by
targeting U.S. exports. targeting U.S. exports.
In its most recent Special 301 Report, the USTR placed 33 trading partners on the Priority Watch In its most recent Special 301 Report, the USTR placed 33 trading partners on the Priority Watch
List or Watch ListList or Watch List (Figure 2).95 According to the agency, these are countries “that currently 95 According to the agency, these are countries “that currently
present the most significant concerns regarding IP rights.”96 present the most significant concerns regarding IP rights.”96
Figure 2. Special 301: Country Designations in 2020

Source: Congressional Research Service with information from USTR’s Congressional Research Service with information from USTR’s 2020 Special 301 Report. .
Notes: China is on the “Priority Watch List” and subject to “Section 306 Monitoring.” China is on the “Priority Watch List” and subject to “Section 306 Monitoring.”
Procedures for Country Identification
The Special 301 statute provides the overall guidelines for identifying countries for the various The Special 301 statute provides the overall guidelines for identifying countries for the various
designations or lists. However, the USTR also considers a host of factors specific to the country, designations or lists. However, the USTR also considers a host of factors specific to the country,
including the level and scope of the country’s IPR infringement and its impact on the U.S. including the level and scope of the country’s IPR infringement and its impact on the U.S.

95 Office of the USTR, 95 Office of the USTR, 2020 Special 301 Report, April 2020. , April 2020.
96 Office of the USTR, “USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of 96 Office of the USTR, “USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of
Notorious Markets for Counterfeiting and Piracy,” Press Release, April 29, 2020. Notorious Markets for Counterfeiting and Piracy,” Press Release, April 29, 2020.
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economy; the strength of the country’s IPR laws and the effectiveness of its enforcement; and economy; the strength of the country’s IPR laws and the effectiveness of its enforcement; and
progress made by the country in improving IPR protection and enforcement in the past year.97 progress made by the country in improving IPR protection and enforcement in the past year.97
Additionally, the USTR considers the country’s commitment to bilateral and multilateral Additionally, the USTR considers the country’s commitment to bilateral and multilateral
agreements related to IPR (entering into bilateral trade agreements with the United States or agreements related to IPR (entering into bilateral trade agreements with the United States or
joining IPR-related international agreements).98 No “weighting criteria” or formula exists to joining IPR-related international agreements).98 No “weighting criteria” or formula exists to
determine the placement of a country on a list. Furthermore, no particular threshold exists for determine the placement of a country on a list. Furthermore, no particular threshold exists for
determining when a country should be upgraded or downgraded on a list. In making a determining when a country should be upgraded or downgraded on a list. In making a
determination, the USTR gathers information based on its “National Trade Estimates of Foreign determination, the USTR gathers information based on its “National Trade Estimates of Foreign
Trade Barriers,” as well as consultations with a wide variety of sources, including government Trade Barriers,” as well as consultations with a wide variety of sources, including government
agencies, industry groups that rely on IP protection, other private sector representatives, agencies, industry groups that rely on IP protection, other private sector representatives,
Congressional leaders, and foreign governments. Congressional leaders, and foreign governments.
Placement Considerations
The Special 301 list is a method to disseminate information on IP issues in other countries and to The Special 301 list is a method to disseminate information on IP issues in other countries and to
guide U.S. trade policy. Country identification based on a wide variety of factors can provide a guide U.S. trade policy. Country identification based on a wide variety of factors can provide a
more informed understanding of a country’s IP situation. However, some trade analysts have more informed understanding of a country’s IP situation. However, some trade analysts have
speculated that the rankings are subject to external influences.99 The lack of a specific framework speculated that the rankings are subject to external influences.99 The lack of a specific framework
for placing countries on the list—or for removing them—aside from the general directives from for placing countries on the list—or for removing them—aside from the general directives from
the Special 301 statute, has raised concerns that foreign policy or other considerations may affect the Special 301 statute, has raised concerns that foreign policy or other considerations may affect
the process. the process.
World Trade Organization and Section 301
Background on the WTO DSU
From its inception in 1947, the General Agreement on Tariffs and Trade (GATT)—the From its inception in 1947, the General Agreement on Tariffs and Trade (GATT)—the
predecessor to the WTO—provided for consultations and dispute resolution, allowing a GATT predecessor to the WTO—provided for consultations and dispute resolution, allowing a GATT
party to invoke dispute settlement procedures if it believed that another party’s measure violated a party to invoke dispute settlement procedures if it believed that another party’s measure violated a
GATT provision or caused it trade injury.100 Because the original GATT did not set out a dispute GATT provision or caused it trade injury.100 Because the original GATT did not set out a dispute
procedure with great specificity, GATT parties developed a more detailed process, including procedure with great specificity, GATT parties developed a more detailed process, including ad
hoc panels and other practices. The process was perceived to have certain deficiencies, however, panels and other practices. The process was perceived to have certain deficiencies, however,
including a lack of deadlines, a consensus decision-making process, and laxity in surveillance and including a lack of deadlines, a consensus decision-making process, and laxity in surveillance and
implementation of panel reports—even when reports were adopted and had the status of an implementation of panel reports—even when reports were adopted and had the status of an
official GATT decision.101 The consensus decision-making process did not ensure enforceability official GATT decision.101 The consensus decision-making process did not ensure enforceability
because it allowed a GATT party against whom a dispute was filed to block the establishment of a because it allowed a GATT party against whom a dispute was filed to block the establishment of a
dispute panel (and the adoption of a panel report by the GATT parties as a whole). dispute panel (and the adoption of a panel report by the GATT parties as a whole).
Congress made reform of the GATT dispute process a principal U.S. negotiating objective in the Congress made reform of the GATT dispute process a principal U.S. negotiating objective in the
GATT Uruguay Round of multilateral trade negotiations. These talks began in 1986 and GATT Uruguay Round of multilateral trade negotiations. These talks began in 1986 and
concluded in 1994 with the signing of the Marrakesh Agreement, which established the WTO in concluded in 1994 with the signing of the Marrakesh Agreement, which established the WTO in

97 For more detail, see “Special Rules for Identifications,” (19 U.S.C97 For more detail, see “Special Rules for Identifications,” (19 U.S.C. § 2242(b)). § 2242(b)).
98 Ibid. 98 Ibid.
99 See, for example, Consumers International, “IP Watch List 2019,” February 20, 2010. 99 See, for example, Consumers International, “IP Watch List 2019,” February 20, 2010.
100 For more detail on the dispute settlement under GATT, see WTO, “Historic Development of the WTO Dispute 100 For more detail on the dispute settlement under GATT, see WTO, “Historic Development of the WTO Dispute
Settlement System,” Dispute Settlement System Training Module, Chapter 2. Settlement System,” Dispute Settlement System Training Module, Chapter 2.
101 Ibid. 101 Ibid.
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1995.102 In particular, U.S. officials sought to create an effective dispute resolution system to 1995.102 In particular, U.S. officials sought to create an effective dispute resolution system to
enforce multilateral commitments under the future WTO. The WTO Agreements included several enforce multilateral commitments under the future WTO. The WTO Agreements included several
provisions to strengthen dispute resolution procedures by providing stricter timetables for panel provisions to strengthen dispute resolution procedures by providing stricter timetables for panel
decisions in trade disputes, establishing mechanisms to prevent the blocking of panel decisions by decisions in trade disputes, establishing mechanisms to prevent the blocking of panel decisions by
affected countries, and broadening the ability of nations to retaliate against countries that fail to affected countries, and broadening the ability of nations to retaliate against countries that fail to
abide by WTO dispute settlement decisions. The WTO Agreements also further reduced and abide by WTO dispute settlement decisions. The WTO Agreements also further reduced and
removed barriers to trade among WTO members through new market access commitments and removed barriers to trade among WTO members through new market access commitments and
expansion of the level and types of trade in goods, services, and agriculture covered by expansion of the level and types of trade in goods, services, and agriculture covered by
multilateral rules and disciplines. They also included new rules for trade-related investment and multilateral rules and disciplines. They also included new rules for trade-related investment and
IPR, among other new commitments. IPR, among other new commitments.
Article 23 of the DSU requires that WTO members invoke DSU procedures in disputes involving Article 23 of the DSU requires that WTO members invoke DSU procedures in disputes involving
WTO agreements and that they act in accordance with the DSU (i.e., not unilaterally) when: (1) WTO agreements and that they act in accordance with the DSU (i.e., not unilaterally) when: (1)
deciding if another member has violated a WTO Agreement, (2) determining a date by which the deciding if another member has violated a WTO Agreement, (2) determining a date by which the
member must comply with a WTO decision, and (3) taking any retaliatory action against a member must comply with a WTO decision, and (3) taking any retaliatory action against a
noncomplying member (see noncomplying member (see textbox). ).
Article 23: Strengthening of the Multilateral System
WTO Understanding on Rules and Procedures Governing the Settlement of Disputes
(DSU)
“1. When Members seek the redress of a violation of obligations or other nul ification or impairment of benefits “1. When Members seek the redress of a violation of obligations or other nul ification or impairment of benefits
under the covered agreements or an impediment to the attainment of any objective of the covered agreements, under the covered agreements or an impediment to the attainment of any objective of the covered agreements,
they shall have recourse to, and abide by, the rules and procedures of this Understanding. they shall have recourse to, and abide by, the rules and procedures of this Understanding.
2. In such cases, Members shall: 2. In such cases, Members shall:
(a) not make a determination to the effect that a violation has occurred, that benefits have been nul ified or impaired (a) not make a determination to the effect that a violation has occurred, that benefits have been nul ified or impaired
or that the attainment of any objective of the covered agreements has been impeded, except through recourse to or that the attainment of any objective of the covered agreements has been impeded, except through recourse to
dispute settlement in accordance with the rules and procedures of this Understanding, and shall make any such dispute settlement in accordance with the rules and procedures of this Understanding, and shall make any such
determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or determination consistent with the findings contained in the panel or Appellate Body report adopted by the DSB or
an arbitration award rendered under this Understanding; an arbitration award rendered under this Understanding;
(b) fol ow the procedures set forth in Article 21 [Surveillance of Implementation of Recommendations and Rulings] (b) fol ow the procedures set forth in Article 21 [Surveillance of Implementation of Recommendations and Rulings]
to determine the reasonable period of time for the Member concerned to implement the recommendations and to determine the reasonable period of time for the Member concerned to implement the recommendations and
rulings; and rulings; and
(c) fol ow the procedures set forth in Article 22 [Compensation and the Suspension of Concessions] to determine (c) fol ow the procedures set forth in Article 22 [Compensation and the Suspension of Concessions] to determine
the level of suspension of concessions or other obligations and obtain DSB authorization in accordance with those the level of suspension of concessions or other obligations and obtain DSB authorization in accordance with those
procedures before suspending concessions or other obligations under the covered agreements in response to the procedures before suspending concessions or other obligations under the covered agreements in response to the
failure of the Member concerned to implement the recommendations and rulings within that reasonable period of failure of the Member concerned to implement the recommendations and rulings within that reasonable period of
time.” time.”
The Statement of Administrative Action (SAA), which Congress approved in 1994 along with the The Statement of Administrative Action (SAA), which Congress approved in 1994 along with the
implementing legislation for the WTO Agreements, noted that the United States would commit to implementing legislation for the WTO Agreements, noted that the United States would commit to
pursue formal dispute settlement before the WTO if a practice or policy involved a violation of pursue formal dispute settlement before the WTO if a practice or policy involved a violation of
the WTO Agreements. The creation of a strong dispute mechanism in the WTO was expected to the WTO Agreements. The creation of a strong dispute mechanism in the WTO was expected to

102 The first “principal trade negotiating objective” outlined by Congress in the Omnibus Trade and Competitiveness 102 The first “principal trade negotiating objective” outlined by Congress in the Omnibus Trade and Competitiveness
Act of 1988 with respect to GATT and the Uruguay Round of multilateral trade negotiations was “to ensure that... Act of 1988 with respect to GATT and the Uruguay Round of multilateral trade negotiations was “to ensure that...
[dispute settlement] mechanisms within the GATT and GATT agreements provide for more effective and expeditious [dispute settlement] mechanisms within the GATT and GATT agreements provide for more effective and expeditious
resolution of disputes and enable better enforcement of United States rights.” (Section 1101(b)(1), P.L. 100-418). The resolution of disputes and enable better enforcement of United States rights.” (Section 1101(b)(1), P.L. 100-418). The
WTO Agreement requires any country that wishes to be a WTO member to accept all of the multilateral trade WTO Agreement requires any country that wishes to be a WTO member to accept all of the multilateral trade
agreements negotiated during the Uruguay Round, including the GATT 1994 (an updated version of the GATT 1947), agreements negotiated during the Uruguay Round, including the GATT 1994 (an updated version of the GATT 1947),
as well as the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), applicable to as well as the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), applicable to
disputes arising under virtually all WTO agreements. disputes arising under virtually all WTO agreements.
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reduce the United States’ need to take unilateral action under Section 301, which many countries reduce the United States’ need to take unilateral action under Section 301, which many countries
opposed.103 opposed.103
Relationship between the WTO and Section 301
As noted above, since the establishment of the WTO in 1995, the United States has relied As noted above, since the establishment of the WTO in 1995, the United States has relied
primarily on the WTO DSU to enforce its trade rights. Thus, many cases initiated under Section primarily on the WTO DSU to enforce its trade rights. Thus, many cases initiated under Section
301 have been brought before the WTO for dispute resolution (if initial consultations failed to 301 have been brought before the WTO for dispute resolution (if initial consultations failed to
resolve the issue). In fact, in most cases, the USTR has brought disputes directly to the WTO resolve the issue). In fact, in most cases, the USTR has brought disputes directly to the WTO
without carrying out a formal Section 301 investigation. However, the 1994 Statement of without carrying out a formal Section 301 investigation. However, the 1994 Statement of
Administrative Action (SAA) also made clear that the United States was not committing to Administrative Action (SAA) also made clear that the United States was not committing to
invoke dispute settlement procedures if the USTR determined that a practice under investigation invoke dispute settlement procedures if the USTR determined that a practice under investigation
did not involve or was not covered by the WTO Agreements (see did not involve or was not covered by the WTO Agreements (see textbox).104 ).104

103 For more detail on the congressional debate with respect to the WTO’s dispute settlement mechanism and the use of 103 For more detail on the congressional debate with respect to the WTO’s dispute settlement mechanism and the use of
Section 301, see, for example, “Uruguay Round Agreements Act,” 103rd Congress, 2nd Session, Section 301, see, for example, “Uruguay Round Agreements Act,” 103rd Congress, 2nd Session, Congressional Record, ,
Senate, Vol. 140, No. 148, pp. 29924-30016, November 30, 1994. Senate, Vol. 140, No. 148, pp. 29924-30016, November 30, 1994.
104 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, 104 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316,
Vol. 1 (1994). Vol. 1 (1994).
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Excerpts from the Uruguay Round Agreements Act’s Statement of Administrative
Action: “Enforcement of U.S. Rights”
September 1994
“The Administration intends to use section 301 to pursue vigorously foreign unfair trade barriers that violate U.S. “The Administration intends to use section 301 to pursue vigorously foreign unfair trade barriers that violate U.S.
rights or deny benefits to the United States under the Uruguay Round agreements. The Administration equally rights or deny benefits to the United States under the Uruguay Round agreements. The Administration equally
intends to use section 301 to pursue foreign unfair trade barriers that are not covered by those agreements. This intends to use section 301 to pursue foreign unfair trade barriers that are not covered by those agreements. This
is what Congress intended in the Omnibus Trade and Competition Act of 1988 when, on the one hand, it made a is what Congress intended in the Omnibus Trade and Competition Act of 1988 when, on the one hand, it made a
more effective and expeditious dispute settlement mechanism the first principal U.S. negotiating objective and, on more effective and expeditious dispute settlement mechanism the first principal U.S. negotiating objective and, on
the other hand, the Congress made major modifications to strengthen section 301 for use against both those the other hand, the Congress made major modifications to strengthen section 301 for use against both those
practices falling within and outside trade agreements to which the United States is a party.” practices falling within and outside trade agreements to which the United States is a party.”
“Neither section 301 nor the DSU wil require the Trade Representative to invoke DSU dispute settlement “Neither section 301 nor the DSU wil require the Trade Representative to invoke DSU dispute settlement
procedures if the Trade Representative does not consider that a matter involves a Uruguay Round agreement. procedures if the Trade Representative does not consider that a matter involves a Uruguay Round agreement.
Section 301 wil remain ful y available to address unfair practices that do not violate U.S. rights or deny U.S. benefits Section 301 wil remain ful y available to address unfair practices that do not violate U.S. rights or deny U.S. benefits
under the Uruguay Round agreements and, as in the past, such investigations wil not involve recourse to multilateral under the Uruguay Round agreements and, as in the past, such investigations wil not involve recourse to multilateral
dispute settlement procedures.” dispute settlement procedures.”
“Moreover, the mere fact that the Uruguay Round agreements treat a particular subject matter—such as intellectual “Moreover, the mere fact that the Uruguay Round agreements treat a particular subject matter—such as intellectual
property rights—does not mean that the Trade Representative must initiate DSU proceedings in every section 301 property rights—does not mean that the Trade Representative must initiate DSU proceedings in every section 301
investigation involving that subject matter. In the event that the actions of the foreign government in question fall investigation involving that subject matter. In the event that the actions of the foreign government in question fall
outside the disciplines of those agreements, the section 301 investigation would proceed without recourse to DSU outside the disciplines of those agreements, the section 301 investigation would proceed without recourse to DSU
procedures.” procedures.”
“Some foreign government practices may involve a number of actions, some of which are covered under the rules “Some foreign government practices may involve a number of actions, some of which are covered under the rules
imposed by the Uruguay Round agreements and some of which are not. In section 301 investigations involving mixed imposed by the Uruguay Round agreements and some of which are not. In section 301 investigations involving mixed
actions of this kind, the Administration intends to continue the current practice of initiating dispute settlement actions of this kind, the Administration intends to continue the current practice of initiating dispute settlement
proceedings against actions falling under a trade agreement and addressing other actions through bilateral proceedings against actions falling under a trade agreement and addressing other actions through bilateral
negotiations.” negotiations.”
“Finally, nothing in the DSU wil affect application of section 301 against practices by governments that either are “Finally, nothing in the DSU wil affect application of section 301 against practices by governments that either are
not WTO members or by WTO members to which the United States does not apply the Uruguay Round not WTO members or by WTO members to which the United States does not apply the Uruguay Round
agreements. The Trade Representative wil address section 301 investigations of unfair trade practices by such agreements. The Trade Representative wil address section 301 investigations of unfair trade practices by such
countries on a bilateral basis.” countries on a bilateral basis.”

Source: Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1 Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Doc. No. 103-316, Vol. 1
(1994). (1994).
In 1998, the EU filed a complaint over Section 301 at the WTO based on various obligations in In 1998, the EU filed a complaint over Section 301 at the WTO based on various obligations in
Article 23 of the DSU, which, as noted above, precludes certain unilateral actions in trade Article 23 of the DSU, which, as noted above, precludes certain unilateral actions in trade
disputes involving WTO Agreements.105 While Section 301 may generally be used consistently disputes involving WTO Agreements.105 While Section 301 may generally be used consistently
with the DSU, some U.S. trading partners complained that the statute allows unilateral action and with the DSU, some U.S. trading partners complained that the statute allows unilateral action and
forces negotiations through its threat of sanctions. In this case, the WTO panel found that the forces negotiations through its threat of sanctions. In this case, the WTO panel found that the
language of Section 304 of the Trade Act of 1974, which requires the USTR to determine the language of Section 304 of the Trade Act of 1974, which requires the USTR to determine the
legality of a foreign practice by a given date, is legality of a foreign practice by a given date, is prima facie inconsistent with DSU Article 23 inconsistent with DSU Article 23
because in some cases it mandates a USTR determination—and statutorily reserves a right for the because in some cases it mandates a USTR determination—and statutorily reserves a right for the
USTR to determine that a practice is WTO inconsistent—before DSU procedures are USTR to determine that a practice is WTO inconsistent—before DSU procedures are
completed.106 The panel also found, however, that the serious threat of determinations that were in completed.106 The panel also found, however, that the serious threat of determinations that were in
violation of U.S. obligations (and consequently violation of U.S. obligations (and consequently prima facie inconsistent) was removed by U.S. inconsistent) was removed by U.S.
undertakings, as set forth in the SAA and U.S. statements made before the panel, that the USTR undertakings, as set forth in the SAA and U.S. statements made before the panel, that the USTR
would use its statutory discretion to implement Section 301 in conformity with WTO obligations. would use its statutory discretion to implement Section 301 in conformity with WTO obligations.
The panel also could not find that Section 306 violated the DSU. That provision directs USTR to The panel also could not find that Section 306 violated the DSU. That provision directs USTR to
make a determination as to imposing retaliatory measures by a specified date, given differing make a determination as to imposing retaliatory measures by a specified date, given differing

105 For more detail, see WTO Case “DS152: United States—Sections 301–310 of the Trade Act 1974.” 105 For more detail, see WTO Case “DS152: United States—Sections 301–310 of the Trade Act 1974.”
106 WTO, Panel Report, “United States—Sections 301-310 of the Trade Act of 1974,” WT/DS152/R (December 22, 106 WTO, Panel Report, “United States—Sections 301-310 of the Trade Act of 1974,” WT/DS152/R (December 22,
1999). 1999).
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good faith interpretations of the “sequencing” ambiguities in the DSU.107 The panel report, which good faith interpretations of the “sequencing” ambiguities in the DSU.107 The panel report, which
was not appealed, was adopted in January 2000. was not appealed, was adopted in January 2000.
The panel, however, did not address when or how the USTR could retaliate unilaterally under The panel, however, did not address when or how the USTR could retaliate unilaterally under
Section 301. It seems that neither the legislation itself nor case law interpreting it provides Section 301. It seems that neither the legislation itself nor case law interpreting it provides
guidance as to how the USTR should determine if an act, policy, or practice of a foreign country guidance as to how the USTR should determine if an act, policy, or practice of a foreign country
is actually covered by a trade agreement. is actually covered by a trade agreement.
Section 301 Investigations
There have been 130 cases under Section 301 since the law’s enactment in 1974, including 35 There have been 130 cases under Section 301 since the law’s enactment in 1974, including 35
initiated since the WTO’s establishment in 1995 initiated since the WTO’s establishment in 1995 (Figure 3). Historically, Section 301 cases have . Historically, Section 301 cases have
targeted primarily the trade practices of the EU, which is the subject of about 30% of all cases—targeted primarily the trade practices of the EU, which is the subject of about 30% of all cases—
mostly concerning agricultural trade. The EU is followed by Japan (12%), Canada (11%), and mostly concerning agricultural trade. The EU is followed by Japan (12%), Canada (11%), and
South Korea (8%). Prior to 2017—that is, prior to the Trump Administration—South Korea (8%). Prior to 2017—that is, prior to the Trump Administration— the last Section the last Section
301 investigation took place in 2013 and involved Ukraine’s practices regarding IPR.108 However, 301 investigation took place in 2013 and involved Ukraine’s practices regarding IPR.108 However,
in light of the political situation in Ukraine at the time, the USTR determined that no action was in light of the political situation in Ukraine at the time, the USTR determined that no action was
appropriate.109 The last investigation prior to the Trump Administration that resulted in retaliation appropriate.109 The last investigation prior to the Trump Administration that resulted in retaliation
(i.e., tariffs) took place in 2009 and involved Canada’s compliance with the 2006 U.S.-Canada (i.e., tariffs) took place in 2009 and involved Canada’s compliance with the 2006 U.S.-Canada
Softwood Lumber Agreement.110 Per a U.S-Canadian understanding, the USTR suspended the Softwood Lumber Agreement.110 Per a U.S-Canadian understanding, the USTR suspended the
tariffs in 2010.111 tariffs in 2010.111

107 Although many WTO rulings have been implemented satisfactorily, difficult cases have tested DSU articles on 107 Although many WTO rulings have been implemented satisfactorily, difficult cases have tested DSU articles on
implementation, highlighting deficiencies in the system and prompting suggestions for reform. For example, gaps in the implementation, highlighting deficiencies in the system and prompting suggestions for reform. For example, gaps in the
DSU have resulted in the problem of “sequencing,” which first manifested itself in 1998-1999 during the compliance DSU have resulted in the problem of “sequencing,” which first manifested itself in 1998-1999 during the compliance
phase of the successful U.S. challenge of the European Union’s banana import regime. Article 22 allows a prevailing phase of the successful U.S. challenge of the European Union’s banana import regime. Article 22 allows a prevailing
party to request authorization to retaliate within 30 days after a compliance period ends, while Article 21.5 provides party to request authorization to retaliate within 30 days after a compliance period ends, while Article 21.5 provides
that disagreements over the existence or adequacy of compliance measures are to be decided using WTO dispute that disagreements over the existence or adequacy of compliance measures are to be decided using WTO dispute
procedures, including resort to panels. A compliance panel’s report is due within 90 days after the dispute is referred to procedures, including resort to panels. A compliance panel’s report is due within 90 days after the dispute is referred to
the panel, and may be appealed. The DSU does not integrate an Article 21.5 procedure into the 30-day Article 22 the panel, and may be appealed. The DSU does not integrate an Article 21.5 procedure into the 30-day Article 22
deadline, nor does it expressly state how compliance is to be determined so that a prevailing party may pursue action deadline, nor does it expressly state how compliance is to be determined so that a prevailing party may pursue action
under Article 22. Given the absence of multilateral rules on the matter, disputing parties have entered into under Article 22. Given the absence of multilateral rules on the matter, disputing parties have entered into ad hoc
procedural agreements in individual disputes. procedural agreements in individual disputes.
108 Office of the USTR, “Identification of Ukraine as a Priority Foreign Country and Initiation of Section 301 108 Office of the USTR, “Identification of Ukraine as a Priority Foreign Country and Initiation of Section 301
Investigation,” 78Investigation,” 78 Federal Register 33886, June 5, 2013. 33886, June 5, 2013.
109 Office of the USTR, “Notice of Determination in Section 301 Investigation of Ukraine,” 79 109 Office of the USTR, “Notice of Determination in Section 301 Investigation of Ukraine,” 79 Federal Register 14326, 14326,
March 13, 2014. For more detail on Ukraine’s Euromaidan protests and Russia’s 2014 invasion and occupation of March 13, 2014. For more detail on Ukraine’s Euromaidan protests and Russia’s 2014 invasion and occupation of
Ukrainian territory, see Serhy Yekelchyk, Ukrainian territory, see Serhy Yekelchyk, The Conflict in Ukraine: What Everyone Needs to Know, Oxford University , Oxford University
Press, 2015. Press, 2015.
110 Office of the USTR, “United States Imposes Tariffs On Softwood Lumber From Four Canadian Provinces Due To 110 Office of the USTR, “United States Imposes Tariffs On Softwood Lumber From Four Canadian Provinces Due To
CanadaCanada'’s Failure To Comply With The Softwood Lumber Agreement, Press Release, April 7, 2009, and “Initiation of s Failure To Comply With The Softwood Lumber Agreement, Press Release, April 7, 2009, and “Initiation of
Section 302 Investigation, Determination of Action Under Section 301, and Request for Comments: Canada-Section 302 Investigation, Determination of Action Under Section 301, and Request for Comments: Canada-
Compliance With Softwood Lumber Agreement,” 74Compliance With Softwood Lumber Agreement,” 74 Federal Register 16436, April 10, 2009. 16436, April 10, 2009.
111 Office of the USTR, “Notice and Modification of Action: Canada-Compliance with Softwood Lumber Agreement,” 111 Office of the USTR, “Notice and Modification of Action: Canada-Compliance with Softwood Lumber Agreement,”
7575 Federal Register 53014, August 30, 2010. 53014, August 30, 2010.
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Figure 3. Section 301 Investigations: 1975-Present

Source: Congressional Research Service and USTR’s Congressional Research Service and USTR’s Federal Register. .
Notes: Includes all investigations initiated by the Office of the USTR, regardless of whether the case was Includes all investigations initiated by the Office of the USTR, regardless of whether the case was
suspended or combined with others, or action was ultimately taken under Section 301. suspended or combined with others, or action was ultimately taken under Section 301.
Cases during the Trump Administration
During the During the ~~President Trump~~Trump Administration, the USTR has self-initiated six new investigations against China, the , the USTR has self-initiated six new investigations against China, the
EU, France, a group of 10 trading partners, and two against VietnamEU, France, a group of 10 trading partners, and two against Vietnam (Figure 4). Two . Two
investigations have resulted in the USTR imposing tariffs to date—on U.S. imports from China investigations have resulted in the USTR imposing tariffs to date—on U.S. imports from China
and the EU. The investigation against the EU, launched in April 2019, sought to enforce a WTO and the EU. The investigation against the EU, launched in April 2019, sought to enforce a WTO
ruling in connection with the “Large Civil Aircraft Dispute.” Unlike the U.S. action taken against ruling in connection with the “Large Civil Aircraft Dispute.” Unlike the U.S. action taken against
China, the WTO had authorized the action against the EU. China, the WTO had authorized the action against the EU.
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Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Figure 4. Section 301 Investigations: 2017-Present

Source: Congressional Research Service with information from the Office of the USTR. Congressional Research Service with information from the Office of the USTR.
China: Technology Transfer, Intellectual Property, and Innovation
Concerns over China’s policies on IPR, subsidies, technology, and innovation led the Trump Concerns over China’s policies on IPR, subsidies, technology, and innovation led the Trump
Administration to launch in August 2017 a Section 301 investigation into those policies and their Administration to launch in August 2017 a Section 301 investigation into those policies and their
impact on U.S. stakeholders.112 The investigation, concluded in March 2018, determined that four impact on U.S. stakeholders.112 The investigation, concluded in March 2018, determined that four
of China’s broad policies or practices justified U.S. action: (1) forced technology transfer of China’s broad policies or practices justified U.S. action: (1) forced technology transfer
requirements; (2) cyber-enabled theft of U.S. intellectual property (IP) and trade secrets; (3) requirements; (2) cyber-enabled theft of U.S. intellectual property (IP) and trade secrets; (3)
discriminatory and nonmarket licensing practices; and (4) state-funded strategic acquisition of discriminatory and nonmarket licensing practices; and (4) state-funded strategic acquisition of
U.S. assets.113 President Trump sought to justify taking unilateral action to address most of these U.S. assets.113 President Trump sought to justify taking unilateral action to address most of these

112 Office of the USTR, “USTR Announces Initiation of Section 301 Investigation of China,” Press Release, August 18, 112 Office of the USTR, “USTR Announces Initiation of Section 301 Investigation of China,” Press Release, August 18,
2017, and “Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: China2017, and “Initiation of Section 301 Investigation; Hearing; and Request for Public Comments: China'’s Acts, Policies, s Acts, Policies,
and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 82and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 82 Federal Register 40213, 40213,
August 24, 2017. The initiation of the investigation followed the issuance of a Presidential Memorandum instructing August 24, 2017. The initiation of the investigation followed the issuance of a Presidential Memorandum instructing
the USTR to determine “whether to investigate any of China’s laws, policies, practices, or actions that may be the USTR to determine “whether to investigate any of China’s laws, policies, practices, or actions that may be
unreasonable or discriminatory and that may be harming American intellectual property rights, innovation, or unreasonable or discriminatory and that may be harming American intellectual property rights, innovation, or
technology development.” (Executive Office of the President, “Addressing Chinatechnology development.” (Executive Office of the President, “Addressing China'’s Laws, Policies, Practices, and s Laws, Policies, Practices, and
Actions Related to Intellectual Property, Innovation, and Technology, Memorandum for the United States Trade Actions Related to Intellectual Property, Innovation, and Technology, Memorandum for the United States Trade
Representative,” 82Representative,” 82 Federal Register 39007, August 17, 2017. For more detail on U.S.-China trade and investment 39007, August 17, 2017. For more detail on U.S.-China trade and investment
relations, see CRS In Focus IF11284, relations, see CRS In Focus IF11284, U.S.-China Trade and Economic Relations: Overview, by Karen M. Sutter and , by Karen M. Sutter and
CRS In Focus IF11283, CRS In Focus IF11283, U.S.-China Investment Ties: Overview and Issues for Congress, by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
113 Office of the USTR, 113 Office of the USTR, Findings of the Investigation into China’s Acts, Policies, and Practices Related to Technology
Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974, March 22, 2018. See also, , March 22, 2018. See also,
Executive Office of the President, “Actions by the United States Related to the Section 301 Investigation of China’s Executive Office of the President, “Actions by the United States Related to the Section 301 Investigation of China’s
Laws, Policies, Practices, or Actions Related to Technology Transfer, Intellectual Property, and Innovation,” Laws, Policies, Practices, or Actions Related to Technology Transfer, Intellectual Property, and Innovation,”
Presidential Memorandum, 83Presidential Memorandum, 83 Federal Register 13099, March 27, 2018. The USTR estimated that these policies cost 13099, March 27, 2018. The USTR estimated that these policies cost
the U.S. economy at least $50 billion annually (Office of the USTR, “Section 301 Fact Sheet,” March 22, 2018). Some the U.S. economy at least $50 billion annually (Office of the USTR, “Section 301 Fact Sheet,” March 22, 2018). Some
estimates also suggest that Chinese IPR violations are a major source of U.S. economic losses. U.S. firms cite lax IPR estimates also suggest that Chinese IPR violations are a major source of U.S. economic losses. U.S. firms cite lax IPR
enforcement as one of the primary challenges to doing business in China, and some view the enforcement shortfalls as enforcement as one of the primary challenges to doing business in China, and some view the enforcement shortfalls as
a deliberate effort by the Chinese government to give domestic firms an advantage over foreign competitors. In 2018, a deliberate effort by the Chinese government to give domestic firms an advantage over foreign competitors. In 2018,
the U.S. National Counterintelligence and Security Center (NCSC) described China as having “expansive efforts in the U.S. National Counterintelligence and Security Center (NCSC) described China as having “expansive efforts in
place to acquire U.S. technology to include sensitive trade secrets and proprietary information.” It warned that if the place to acquire U.S. technology to include sensitive trade secrets and proprietary information.” It warned that if the
threat is not addressed, “it could erode America’s long-term competitive economic advantage.” (National threat is not addressed, “it could erode America’s long-term competitive economic advantage.” (National
Counterintelligence and Security Center, “Foreign Economic Espionage in Cyberspace,” July 2018.) Counterintelligence and Security Center, “Foreign Economic Espionage in Cyberspace,” July 2018.)
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issues by pointing to alleged weaknesses in WTO dispute settlement procedures and the issues by pointing to alleged weaknesses in WTO dispute settlement procedures and the
inadequacy or nonexistence of WTO rules to address certain Chinese trade practices.114 The inadequacy or nonexistence of WTO rules to address certain Chinese trade practices.114 The
Trump Administration also added issues unrelated to the Section 301 investigation to the Trump Administration also added issues unrelated to the Section 301 investigation to the
subsequent bilateral consultations and trade negotiations with China. These included demands subsequent bilateral consultations and trade negotiations with China. These included demands
that China take steps to reduce the bilateral trade imbalance (including by making significant that China take steps to reduce the bilateral trade imbalance (including by making significant
purchases of U.S. products), make economic structural changes that provide the United States purchases of U.S. products), make economic structural changes that provide the United States
greater reciprocity in access to China’s market, and address currency issues.115 The broadening in greater reciprocity in access to China’s market, and address currency issues.115 The broadening in
the scope of the negotiations to include additional demands may be viewed by some to have the scope of the negotiations to include additional demands may be viewed by some to have
complicated the resolution of the issues identified by the Section 301 investigation and the complicated the resolution of the issues identified by the Section 301 investigation and the
subsequent trade dispute. subsequent trade dispute.
Following the Section 301 findings, the Following the Section 301 findings, the
USTR, at the direction of President Trump, USTR, at the direction of President Trump,
Figure 5. U.S.-China Trade in 2017
took five major tariff actions in 2018 and took five major tariff actions in 2018 and
2019 2019 (Table 3). Approximately three-fourths Approximately three-fourths
of U.S. imports from China became subject to of U.S. imports from China became subject to
increased Section 301 tariffs, ranging from increased Section 301 tariffs, ranging from
15% to 25% 15% to 25% (Figure 5).116 The United States 116 The United States
and China engaged in several rounds of and China engaged in several rounds of
negotiations to resolve U.S. concerns raised negotiations to resolve U.S. concerns raised

during the investigation, as well as other during the investigation, as well as other
Source: Congressional Research Service with data Congressional Research Service with data
unrelated issues.117 These negotiations unrelated issues.117 These negotiations
from the U.S. Department of Commerce’s Bureau of from the U.S. Department of Commerce’s Bureau of
ultimately resulted in a “phase one” deal of ultimately resulted in a “phase one” deal of
Economic Analysis. Economic Analysis.
narrow scope (so-called “U.S.-China Phase narrow scope (so-called “U.S.-China Phase
Notes: Calculations based on pre-tariff import data. Calculations based on pre-tariff import data.
One Trade Agreement”), signed in January One Trade Agreement”), signed in January
2020 and described by the Administration as the first step toward a more comprehensive trade 2020 and described by the Administration as the first step toward a more comprehensive trade
agreement.118 As part of the deal, the USTR announced reductions in certain tariff rate hikes, agreement.118 As part of the deal, the USTR announced reductions in certain tariff rate hikes,

114 See, for example, Office of the USTR, “United States—Tariff Measures On Certain Goods from China (DS543): 114 See, for example, Office of the USTR, “United States—Tariff Measures On Certain Goods from China (DS543):
First Written Submission of the United States of America,” August 27, 2019. In this submission, the USTR stated that First Written Submission of the United States of America,” August 27, 2019. In this submission, the USTR stated that
“China has chosen to adopt a range of policies and practices to obtain an unfair competitive edge over other Members “China has chosen to adopt a range of policies and practices to obtain an unfair competitive edge over other Members
by stealing or otherwise unfairly acquiring their technology and intellectual property. Where those policies or practices by stealing or otherwise unfairly acquiring their technology and intellectual property. Where those policies or practices
can be addressed through WTO rules, the United States is pursuing WTO dispute settlement. Most of China’s practices, can be addressed through WTO rules, the United States is pursuing WTO dispute settlement. Most of China’s practices,
however, are not covered by existing WTO disciplines.” however, are not covered by existing WTO disciplines.”
115 See, for example, Gabriel Wildau and Shawn Donnan, “US Demands China Cut Trade Deficit by $200bn: 115 See, for example, Gabriel Wildau and Shawn Donnan, “US Demands China Cut Trade Deficit by $200bn:
Washington Increases Brinkmanship with Call for Beijing to Open Economy More,” Washington Increases Brinkmanship with Call for Beijing to Open Economy More,” Financial Times, May 4, 2018. , May 4, 2018.
116 Approximately 73.1% of U.S. imports from China became subject to Section 301 tariffs ($370 billion out of $506 116 Approximately 73.1% of U.S. imports from China became subject to Section 301 tariffs ($370 billion out of $506
billion). Based on CRS calculations using 2017 (pre-tariff) data from the U.S. Department of Commerce’s Bureau of billion). Based on CRS calculations using 2017 (pre-tariff) data from the U.S. Department of Commerce’s Bureau of
Economic Analysis. Economic Analysis.
117 For a comprehensive timeline, see, for example, China Briefing, “The US-China Trade War: A Timeline,” Dezan 117 For a comprehensive timeline, see, for example, China Briefing, “The US-China Trade War: A Timeline,” Dezan
Shira & Associates. Official statements from The White House, include, among others: “Trump Administration Shira & Associates. Official statements from The White House, include, among others: “Trump Administration
Officials to Host Trade Delegation from China,” May 16, 2018; “Statement from the Press Secretary Regarding the Officials to Host Trade Delegation from China,” May 16, 2018; “Statement from the Press Secretary Regarding the
President’s Working Dinner with China,” December 1, 2018; “Statement of the United States Regarding China Talks,” President’s Working Dinner with China,” December 1, 2018; “Statement of the United States Regarding China Talks,”
January 31, 2019; “Statement by the Press Secretary Regarding China Talks,” February 15, 2019; “Statement of the January 31, 2019; “Statement by the Press Secretary Regarding China Talks,” February 15, 2019; “Statement of the
United States Regarding China Talks,” March 29, 2019; “Statement from the Press Secretary Regarding the United States Regarding China Talks,” March 29, 2019; “Statement from the Press Secretary Regarding the
Administration’s Trade Talks with China,” April 5, 2019; “Statement from the Press Secretary Regarding the Administration’s Trade Talks with China,” April 5, 2019; “Statement from the Press Secretary Regarding the
Administration’s Trade Talks with China,” April 23, 2019; “Remarks by President Trump and Vice Premier Liu He of Administration’s Trade Talks with China,” April 23, 2019; “Remarks by President Trump and Vice Premier Liu He of
the People’s Republic of China in a Meeting,” October 11, 2019. the People’s Republic of China in a Meeting,” October 11, 2019.
118 Office of the USTR, “Economic and Trade Agreement between the Government of the United States of America 118 Office of the USTR, “Economic and Trade Agreement between the Government of the United States of America
and the Government of the People’s Republic of China,” January 15, 2020. and the Government of the People’s Republic of China,” January 15, 2020.
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effective February 2020.119 President Trump has indicated that all existing Section 301 tariffs on effective February 2020.119 President Trump has indicated that all existing Section 301 tariffs on
U.S. imports from China will remain in place until a “phase two” deal is concluded.120 U.S. imports from China will remain in place until a “phase two” deal is concluded.120
Table 3. Major Section 301 Tariff Actions on U.S. Imports from China
Stated Value of
Effective
Additional Tariff
U.S. Imports
Federal Register
Date
List
Rate (ad valorem)
Affected
Notice
07/06/2018 07/06/2018
1 1
25% 25%
$34 bil ion $34 bil ion
83 FR 28710 83 FR 28710
08/23/2018 08/23/2018
2 2
25% 25%
$16 bil ion $16 bil ion
83 FR 40823 83 FR 40823
83 FR 47974 83 FR 47974
09/24/2018 09/24/2018
3 3
10% 10%
$200 bil ion $200 bil ion
83 FR 49153 83 FR 49153
25% 25%
06/15/2019 06/15/2019
3 3
$200 bil ion $200 bil ion
84 FR 20459 84 FR 20459
(increased from 10%) (increased from 10%)
84 FR 43304 84 FR 43304
09/01/2019 09/01/2019
4A 4A
15% 15%
$120 bil ion* $120 bil ion*
84 FR 45821 84 FR 45821
Source: Congressional Research Service and USTR’s Congressional Research Service and USTR’s Federal Register notices. notices.
Notes: *Office of the USTR, “United States and China Reach Phase One Trade Agreement,” Press Release, *Office of the USTR, “United States and China Reach Phase One Trade Agreement,” Press Release,
December 13, 2019. The USTR had not previously made public an official estimate of value of U.S. imports December 13, 2019. The USTR had not previously made public an official estimate of value of U.S. imports
affected by List 4A, a subset of List 4 (“$300 Bil ion Trade Action”). affected by List 4A, a subset of List 4 (“$300 Bil ion Trade Action”).
The United States pursued part of the Section 301 investigation at the WTO, and in November The United States pursued part of the Section 301 investigation at the WTO, and in November
2018, a dispute panel was composed to review China’s technology licensing requirements.121 2018, a dispute panel was composed to review China’s technology licensing requirements.121
However, the proceedings have been suspended at the request of the United States since June However, the proceedings have been suspended at the request of the United States since June
2019.122 Since April 2018, China has filed three WTO cases challenging Section 301 tariffs.123 In 2019.122 Since April 2018, China has filed three WTO cases challenging Section 301 tariffs.123 In
September 2020, a WTO dispute settlement panel ruled in the first case and determined that September 2020, a WTO dispute settlement panel ruled in the first case and determined that
Section 301 tariffs on U.S. imports from China were not consistent with U.S. WTO Section 301 tariffs on U.S. imports from China were not consistent with U.S. WTO
commitments.124 In response, U.S. Trade Representative Robert Lighthizer criticized the decision commitments.124 In response, U.S. Trade Representative Robert Lighthizer criticized the decision
and stated that the “WTO is completely inadequate to stop China’s harmful technology and stated that the “WTO is completely inadequate to stop China’s harmful technology
practices.”125 He noted that even though the panel in the case “did not dispute the extensive practices.”125 He noted that even though the panel in the case “did not dispute the extensive
evidence submitted by the United States of intellectual property theft by China, its decision shows evidence submitted by the United States of intellectual property theft by China, its decision shows
that the WTO provides no remedy for such misconduct.”126 In October 2020, the United States that the WTO provides no remedy for such misconduct.”126 In October 2020, the United States

119 Office of the USTR, “Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to 119 Office of the USTR, “Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to
Technology Transfer, Intellectual Property, and Innovation,” 85Technology Transfer, Intellectual Property, and Innovation,” 85 Federal Register 3741, January 22, 2020. 3741, January 22, 2020.
120 See, for example, “Trump: U.S. Will Lift Tariffs on China after Phase 2 Deal Finished,” 120 See, for example, “Trump: U.S. Will Lift Tariffs on China after Phase 2 Deal Finished,” Reuters, January 15, 2020. , January 15, 2020.
121 Office of the USTR, “Following President Trump’s Section 301 Decisions, USTR Launches New WTO Challenge 121 Office of the USTR, “Following President Trump’s Section 301 Decisions, USTR Launches New WTO Challenge
Against China,” Press Release, March 23, 2018, and WTO, “DS542: China—Certain Measures Concerning the Against China,” Press Release, March 23, 2018, and WTO, “DS542: China—Certain Measures Concerning the
Protection of Intellectual Property Rights.” Protection of Intellectual Property Rights.”
122 For more detail, see WTO Case “DS542: China—Certain Measures Concerning the Protection of Intellectual 122 For more detail, see WTO Case “DS542: China—Certain Measures Concerning the Protection of Intellectual
Property Rights.” Property Rights.”
123 The WTO cases are: (1) “DS543: United States—Tariff Measures on Certain Goods from China” (April 4, 2018), 123 The WTO cases are: (1) “DS543: United States—Tariff Measures on Certain Goods from China” (April 4, 2018),
(2) “DS565: United States—Tariff Measures on Certain Goods from China II” (August 23, 2018), and (3) “DS587: (2) “DS565: United States—Tariff Measures on Certain Goods from China II” (August 23, 2018), and (3) “DS587:
United States—Tariff Measures on Certain Goods from China III” (September 2, 2019). United States—Tariff Measures on Certain Goods from China III” (September 2, 2019).
124 For more detail, see WTO Case “DS543: United States—Tariff Measures on Certain Goods from China” and 124 For more detail, see WTO Case “DS543: United States—Tariff Measures on Certain Goods from China” and
“WT/DS543/R: United States—Tariff Measures on Certain Goods from China,” September 15, 2020. “WT/DS543/R: United States—Tariff Measures on Certain Goods from China,” September 15, 2020.
125 Office of the USTR, “WTO Report on US Action against China Shows Necessity for Reform,” Press Release, 125 Office of the USTR, “WTO Report on US Action against China Shows Necessity for Reform,” Press Release,
September 15, 2020. September 15, 2020.
126 Ibid. 126 Ibid.
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notified the WTO Dispute Settlement Body of its decision to appeal the panel report in this notified the WTO Dispute Settlement Body of its decision to appeal the panel report in this
case.127 case.127
The Trump Administration has used the Section 301 investigation and the resulting threat and The Trump Administration has used the Section 301 investigation and the resulting threat and
imposition of tariffs as the primary tool to spur trade negotiations with China over U.S. concerns. imposition of tariffs as the primary tool to spur trade negotiations with China over U.S. concerns.
However, many analysts have raised concerns over the economic impact that a protracted trade However, many analysts have raised concerns over the economic impact that a protracted trade
dispute between the United States and China could have on the U.S. and global economy, dispute between the United States and China could have on the U.S. and global economy,
bilateral commercial ties, and global supply chains that involve producers in many countries.128 bilateral commercial ties, and global supply chains that involve producers in many countries.128
The tariffs have reportedly had the impact of raising some prices for U.S. consumers and firms The tariffs have reportedly had the impact of raising some prices for U.S. consumers and firms
that use Chinese parts and components in production and exports.129 Chinese retaliation may that use Chinese parts and components in production and exports.129 Chinese retaliation may
continue to curtail U.S. exports to the world’s second largest economy.130 continue to curtail U.S. exports to the world’s second largest economy.130
European Union: Enforcement of U.S. WTO Rights in Large Civil Aircraft
Dispute
In April 2019, the USTR initiated a Section 301 investigation in order to enforce U.S. WTO rights In April 2019, the USTR initiated a Section 301 investigation in order to enforce U.S. WTO rights
in connection with the in connection with the Large Civil Aircraft dispute with the EU and the United Kingdom (UK) dispute with the EU and the United Kingdom (UK)
(together referred to as the EU in this subsection).131 Based on the WTO panel, appellate, (together referred to as the EU in this subsection).131 Based on the WTO panel, appellate,
compliance, and arbitrator reports, and information obtained during the investigation, the USTR compliance, and arbitrator reports, and information obtained during the investigation, the USTR
determined that the EU had denied U.S. rights under WTO agreements.132 Specifically, the USTR determined that the EU had denied U.S. rights under WTO agreements.132 Specifically, the USTR
concluded that the EU and certain member states had not complied with a WTO DSB ruling concluded that the EU and certain member states had not complied with a WTO DSB ruling
recommending the withdrawal of WTO-inconsistent subsidies on the manufacture of large civil recommending the withdrawal of WTO-inconsistent subsidies on the manufacture of large civil
aircraft. In 2011, the DSB confirmed that these subsidies had breached the EU’s WTO obligations aircraft. In 2011, the DSB confirmed that these subsidies had breached the EU’s WTO obligations
under GATT 1994 and the Agreement on Subsidies and Countervailing Measures (SCM under GATT 1994 and the Agreement on Subsidies and Countervailing Measures (SCM

127 World Trade Organization, “United States Appeals Panel Report Regarding US Tariffs on Chinese Goods,” October 127 World Trade Organization, “United States Appeals Panel Report Regarding US Tariffs on Chinese Goods,” October
26, 2020. The WTO noted that “[g]iven the ongoing lack of agreement among WTO Members regarding the filling of 26, 2020. The WTO noted that “[g]iven the ongoing lack of agreement among WTO Members regarding the filling of
Appellate Body vacancies, there is no Appellate Body Division available at the current time to deal with the appeal.” Appellate Body vacancies, there is no Appellate Body Division available at the current time to deal with the appeal.”
~~Fore~~For more detail, see CRS Legal Sidebar LSB10553, more detail, see CRS Legal Sidebar LSB10553, Section 301 Tariffs on Goods from China: International and
Domestic Legal Challenges, by Nina M. Hart and Brandon J. Murrill. , by Nina M. Hart and Brandon J. Murrill.
128 See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage 128 See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage
Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying
Spree Unlikely to Cover Trade War’s Costs,” Spree Unlikely to Cover Trade War’s Costs,” Bloomberg, December 18, 2019; and Mary Amiti, Sang Hoon Kong, and , December 18, 2019; and Mary Amiti, Sang Hoon Kong, and
David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve
Bank of New York, May 28, 2020. Bank of New York, May 28, 2020.
129 See, for example, Mary Amiti, Stephen J. Redding, and David E. Weinstein, “Who 129 See, for example, Mary Amiti, Stephen J. Redding, and David E. Weinstein, “Who'’s Paying for the US Tariffs? A s Paying for the US Tariffs? A
Longer-Term Perspective,” Longer-Term Perspective,” NBER Working Paper No. 26610, January 2020; Andrea Shalal, “Trump’s Tariffs Cost , January 2020; Andrea Shalal, “Trump’s Tariffs Cost
U.S. Companies $46 Billion to Date, Data Shows,” U.S. Companies $46 Billion to Date, Data Shows,” Reuters, January 9, 2020; Sylvan Lane and Alex Gangitano, , January 9, 2020; Sylvan Lane and Alex Gangitano,
“Businesses, farmers brace for new phase in Trump trade war,” “Businesses, farmers brace for new phase in Trump trade war,” The Hill, August 8, 2019; and Reuters Staff, “Who , August 8, 2019; and Reuters Staff, “Who
Pays TrumpPays Trump'’s Tariffs, China or U.S. Customers and Companies?” s Tariffs, China or U.S. Customers and Companies?” Reuters, May 21, 2019. , May 21, 2019.
130 See, for example, Liyan Qi, Grace Zhu and Lin Zhu, “China’s U.S. Exports Tumble as Tariffs Bite,” 130 See, for example, Liyan Qi, Grace Zhu and Lin Zhu, “China’s U.S. Exports Tumble as Tariffs Bite,” The Wall Street
Journal, October 14, 2019; Riley Walters, “Decreasing U.S.-China Trade Is Worrisome,” Commentary, The Heritage , October 14, 2019; Riley Walters, “Decreasing U.S.-China Trade Is Worrisome,” Commentary, The Heritage
Foundation, April 3, 2020; and Kenneth Rapoza, “U.S. Exports To China Down For The Second Consecutive Year,” Foundation, April 3, 2020; and Kenneth Rapoza, “U.S. Exports To China Down For The Second Consecutive Year,”
Forbes, April 17, 2020. , April 17, 2020.
131 Office of the USTR, “Initiation of Investigation; Notice of Hearing and Request for Public Comments: Enforcement 131 Office of the USTR, “Initiation of Investigation; Notice of Hearing and Request for Public Comments: Enforcement
of U.S. WTO Rights in Large Civil Aircraft Dispute,” 84of U.S. WTO Rights in Large Civil Aircraft Dispute,” 84 Federal Register 15028, April 12, 2019. For more detail, see 15028, April 12, 2019. For more detail, see
CRS In Focus IF11364, CRS In Focus IF11364, Boeing-Airbus Subsidy Dispute: Recent Developments, by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
132 Office of the USTR, “Notice of Determination and Action Pursuant to Section 301: Enforcement of U.S. WTO 132 Office of the USTR, “Notice of Determination and Action Pursuant to Section 301: Enforcement of U.S. WTO
Rights in Large Civil Aircraft Dispute,” 84Rights in Large Civil Aircraft Dispute,” 84 Federal Register 54245, October 9, 2020. 54245, October 9, 2020.
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Agreement).133 As a result, in October 2019, with WTO authorization, the United States imposed Agreement).133 As a result, in October 2019, with WTO authorization, the United States imposed
additional tariffs on $7.5 billion worth of U.S. imports from the EU.134 additional tariffs on $7.5 billion worth of U.S. imports from the EU.134
The WTO’s authorization for the United States to take countermeasures against the EU—the The WTO’s authorization for the United States to take countermeasures against the EU—the
largest amount in the WTO’s history—came after nearly 15 years of litigation at the WTO.135 The largest amount in the WTO’s history—came after nearly 15 years of litigation at the WTO.135 The
litigation involves the world’s two largest aerospace manufacturers, U.S.-based Boeing and EU-litigation involves the world’s two largest aerospace manufacturers, U.S.-based Boeing and EU-
based Airbus, which have competed for years for dominance in the commercial airline supply based Airbus, which have competed for years for dominance in the commercial airline supply
market. The United States successfully argued that Airbus had received billions of dollars in market. The United States successfully argued that Airbus had received billions of dollars in
illegal subsidies, which resulted in a loss to Boeing of significant market share throughout the illegal subsidies, which resulted in a loss to Boeing of significant market share throughout the
world. The U.S. action to impose tariffs, consistent with the WTO arbitrator’s finding on the world. The U.S. action to impose tariffs, consistent with the WTO arbitrator’s finding on the
appropriate level of countermeasures, aimed to pressure the EU into either ending the subsidies or appropriate level of countermeasures, aimed to pressure the EU into either ending the subsidies or
negotiating an agreement with the United States. negotiating an agreement with the United States.
In a parallel dispute case against the United States, in October 2020, the WTO authorized the EU In a parallel dispute case against the United States, in October 2020, the WTO authorized the EU
to seek remedies in the form of tariffs on $4 billion worth of EU imports from the United States. to seek remedies in the form of tariffs on $4 billion worth of EU imports from the United States.
The WTO had previously determined that some of the subsidies provided by the United States for The WTO had previously determined that some of the subsidies provided by the United States for
the manufacture of Boeing’s large civil aircraft violated the WTO commitments of the United the manufacture of Boeing’s large civil aircraft violated the WTO commitments of the United
States and had caused harm to the interests of the EU.136 The EU exercised its legal rights under States and had caused harm to the interests of the EU.136 The EU exercised its legal rights under
the WTO’s decision to impose retaliatory tariffs on products from the United States, effective the WTO’s decision to impose retaliatory tariffs on products from the United States, effective
November 9, 2020.137 However, the tariff increases are limited to 15% on large civil aircraft and November 9, 2020.137 However, the tariff increases are limited to 15% on large civil aircraft and
25% on agricultural and other products. The USTR has noted that with the elimination of a 25% on agricultural and other products. The USTR has noted that with the elimination of a
Washington State preferential tax rate in early 2020, the United States has fully implemented the Washington State preferential tax rate in early 2020, the United States has fully implemented the
WTO’s recommendations in this case, and therefore “there is no valid basis for the EU to retaliate WTO’s recommendations in this case, and therefore “there is no valid basis for the EU to retaliate
against any U.S. goods.”138 against any U.S. goods.”138
Due to the magnitude of U.S.-EU trade (of which civilian aircraft, engines, and parts are a major Due to the magnitude of U.S.-EU trade (of which civilian aircraft, engines, and parts are a major
component) and ongoing trade frictions, some Members of Congress are closely monitoring component) and ongoing trade frictions, some Members of Congress are closely monitoring
developments in the WTO litigation and in U.S.-EU negotiations.139 developments in the WTO litigation and in U.S.-EU negotiations.139

133 WTO Case “DS316: European Communities and Certain member States—Measures Affecting Trade in Large Civil 133 WTO Case “DS316: European Communities and Certain member States—Measures Affecting Trade in Large Civil
Aircraft.” Aircraft.”
134 Ibid. WTO, “Arbitrator Issues Decision in Airbus Subsidy Dispute,” October 2, 2020. 134 Ibid. WTO, “Arbitrator Issues Decision in Airbus Subsidy Dispute,” October 2, 2020.
135 For an overview of the WTO DSU procedures in the case since 2004, see WTO Case “DS316: European 135 For an overview of the WTO DSU procedures in the case since 2004, see WTO Case “DS316: European
Communities and Certain member States—Measures Affecting Trade in Large Civil Aircraft.” Communities and Certain member States—Measures Affecting Trade in Large Civil Aircraft.”
136 WTO, “WTO Arbitrator Issues Decision in Boeing Subsidy Dispute,” October 13, 2020. For more detail on the 136 WTO, “WTO Arbitrator Issues Decision in Boeing Subsidy Dispute,” October 13, 2020. For more detail on the
EU’s case against the United States, see WTO Case “DS353: United States—Measures Affecting Trade in Large Civil EU’s case against the United States, see WTO Case “DS353: United States—Measures Affecting Trade in Large Civil
Aircraft—Second Complaint.” Aircraft—Second Complaint.”
137 European Commission, “Boeing WTO Case: The EU Puts in Place Countermeasures Against U.S. Exports,” Press 137 European Commission, “Boeing WTO Case: The EU Puts in Place Countermeasures Against U.S. Exports,” Press
Release, November 9, 2020. Release, November 9, 2020.
138 Office of the USTR, “U.S. Notifies Full Compliance in WTO Aircraft Dispute,” Press Release, May 6, 2020, and 138 Office of the USTR, “U.S. Notifies Full Compliance in WTO Aircraft Dispute,” Press Release, May 6, 2020, and
“EU Has No Legal Basis to Impose Aircraft Tariffs; WTO Award Relates Only to Now-Repealed Tax Break, Rejects “EU Has No Legal Basis to Impose Aircraft Tariffs; WTO Award Relates Only to Now-Repealed Tax Break, Rejects
EU Request on Other Measures,” Press Release, October 13, 2020. EU Request on Other Measures,” Press Release, October 13, 2020.
139 More recently, Senate Finance Committee Chairman Chuck Grassley called for the Trump Administration to 139 More recently, Senate Finance Committee Chairman Chuck Grassley called for the Trump Administration to
negotiate with the EU to resolve the negotiate with the EU to resolve the ~~longstanding~~long-standing dispute. (“Grassley: Administration Should Strike Boeing-Airbus dispute. (“Grassley: Administration Should Strike Boeing-Airbus
Deal with EU,” Deal with EU,” Inside U.S. Trade, October 13, 2020.) , October 13, 2020.)
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Following the USTR’s Section 301 Following the USTR’s Section 301
investigation and its determination to enforce investigation and its determination to enforce
U.S. WTO rights, the USTR published in U.S. WTO rights, the USTR published in
Figure 6. U.S.-EU Trade in 2018
October 2019 a list of 158 eight-digit October 2019 a list of 158 eight-digit
Harmonized Tariff Schedule of the United Harmonized Tariff Schedule of the United
States (HTSUS) product lines subject to States (HTSUS) product lines subject to
additional duties.140 The list targeted mainly additional duties.140 The list targeted mainly
U.S. imports from the EU member states U.S. imports from the EU member states
responsible for the illegal subsidies—France, responsible for the illegal subsidies—France,
Germany, Spain, and the UK, but is not Germany, Spain, and the UK, but is not

limited to the aircraft industry. The tariffs limited to the aircraft industry. The tariffs
Source: Congressional Research Service with data Congressional Research Service with data
affected approximately $7.5 billion worth of affected approximately $7.5 billion worth of
from the U.S. Department of Commerce’s Bureau of from the U.S. Department of Commerce’s Bureau of
imports, or about 1.5% of all U.S. goods imports, or about 1.5% of all U.S. goods
Economic Analysis. Economic Analysis.
imports from the EU in 201 imports from the EU in 2018 (Figure 6). The . The
Notes: Calculations based on pre-tariff import data. Calculations based on pre-tariff import data.
WTO authorized the United States to impose WTO authorized the United States to impose
additional additional ad valorem duties—that is, based on the value of the import—of up to 100%; however, duties—that is, based on the value of the import—of up to 100%; however,
at the time, the USTR indicated that the tariff increases would be limited to 10% on large civil at the time, the USTR indicated that the tariff increases would be limited to 10% on large civil
aircraft and 25% on agricultural and other products.141 aircraft and 25% on agricultural and other products.141
By broad product category, aircraft (mainly from France and Germany) accounted for roughly By broad product category, aircraft (mainly from France and Germany) accounted for roughly
40% of the $7.5 billion of trade affected, while whiskies, liqueurs, and wine (mainly from the UK 40% of the $7.5 billion of trade affected, while whiskies, liqueurs, and wine (mainly from the UK
and France) accounted for another 40%, and food and agricultural products (mainly from Spain and France) accounted for another 40%, and food and agricultural products (mainly from Spain
and France) accounted for the remaining 20%.142 and France) accounted for the remaining 20%.142
February 2020 Revision
In December 2019, the USTR announced a review of the initial Section 301 action taken in In December 2019, the USTR announced a review of the initial Section 301 action taken in
October 2019.143 The agency specifically requested public comments on whether (1) products October 2019.143 The agency specifically requested public comments on whether (1) products
covered by the action should remain on or be removed from the tariff list, (2) the current rate of covered by the action should remain on or be removed from the tariff list, (2) the current rate of
additional duty should be increased to as high as 100% for products that remain on the list, and additional duty should be increased to as high as 100% for products that remain on the list, and
(3) additional EU products should be added to the list. Based on this review, in February the (3) additional EU products should be added to the list. Based on this review, in February the
USTR increased the rate of additional duties on large civil aircraft to 15%, effective March 18, USTR increased the rate of additional duties on large civil aircraft to 15%, effective March 18,
2020, and modified the list of other products subject to additional 25% duties (by removing prune 2020, and modified the list of other products subject to additional 25% duties (by removing prune
juice and adding knives to the list), effective March 5, 2020.144 The number of product lines and juice and adding knives to the list), effective March 5, 2020.144 The number of product lines and
total trade affected remained unchanged. total trade affected remained unchanged.
August 2020 Revision
In June 2020, the USTR initiated a second review of the Section 301 action and requested public In June 2020, the USTR initiated a second review of the Section 301 action and requested public
comments.145 Although in July 2020 the EU announced amendments to certain French and comments.145 Although in July 2020 the EU announced amendments to certain French and

140 Office of the USTR, “Notice of Determination and Action Pursuant to Section 301: Enforcement of U.S. WTO 140 Office of the USTR, “Notice of Determination and Action Pursuant to Section 301: Enforcement of U.S. WTO
Rights in Large Civil Aircraft Dispute,” 84Rights in Large Civil Aircraft Dispute,” 84 Federal Register 54245, October 9, 2020. 54245, October 9, 2020.
141 Office of the USTR, “U.S. Wins $7.5 Billion Award in Airbus Subsidies Case,” Press Release, October 2, 2020. 141 Office of the USTR, “U.S. Wins $7.5 Billion Award in Airbus Subsidies Case,” Press Release, October 2, 2020.
142 CRS calculations based on 84142 CRS calculations based on 84 Federal Register 54245 and data from the U.S. Department of Commerce’s Bureau of 54245 and data from the U.S. Department of Commerce’s Bureau of
Economic Analysis. Economic Analysis.
143 Office of the USTR, “Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute,” 84 143 Office of the USTR, “Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute,” 84
Federal Register 67992, December 12, 2019. 67992, December 12, 2019.
144 Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement of U.S. WTO Rights in Large 144 Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement of U.S. WTO Rights in Large
Civil Aircraft Dispute,” 85Civil Aircraft Dispute,” 85 Federal Register 10204, February 21, 2020. 10204, February 21, 2020.
145 Office of the USTR, “Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute,” 85145 Office of the USTR, “Review of Action: Enforcement of U.S. WTO Rights in Large Civil Aircraft Dispute,” 85
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Spanish Airbus launch aid contracts, the USTR determined that these changes were insufficient Spanish Airbus launch aid contracts, the USTR determined that these changes were insufficient
and did not fully implement the DSB’s recommendations.146 As a result, in August 2020, the and did not fully implement the DSB’s recommendations.146 As a result, in August 2020, the
USTR altered the composition of the list of USTR altered the composition of the list of ~~non-aircraft~~nonaircraft products subject to additional duties (two products subject to additional duties (two
product lines removed and nine added of an equivalent amount of trade), effective September 1, product lines removed and nine added of an equivalent amount of trade), effective September 1,
2020.147 The amount of trade affected and level of additional duties remained unchanged. 2020.147 The amount of trade affected and level of additional duties remained unchanged.
As required by Section 306 of the Trade Act of 1974, the USTR plans to continue to reevaluate As required by Section 306 of the Trade Act of 1974, the USTR plans to continue to reevaluate
the tariff actions periodically based on the progress of its negotiations with the EU (see the tariff actions periodically based on the progress of its negotiations with the EU (see
“Carousel” Retaliation).148.148 ~~Any EU retaliation that imposes tariffs on U.S. exports, in response to~~
~~either new U.S. actions or the WTO decision in the parallel EU dispute case against the United~~
~~States, could affect negotiations.~~
France: Digital Services Tax
France enacted a digital services tax (DST) formally on July 24, 2019, after which the USTR France enacted a digital services tax (DST) formally on July 24, 2019, after which the USTR
responded by initiating a Section 301 investigation.149 The DST applies a 3% levy on gross responded by initiating a Section 301 investigation.149 The DST applies a 3% levy on gross
revenues derived from two digital activities of which French “users” are deemed to play a major revenues derived from two digital activities of which French “users” are deemed to play a major
role in value creation: (1) intermediary services,150 and (2) advertising services based on users’ role in value creation: (1) intermediary services,150 and (2) advertising services based on users’
data.151 It is retroactive to digital services revenue as of January 1, 2019.152 The law excludes data.151 It is retroactive to digital services revenue as of January 1, 2019.152 The law excludes
certain services, including digital interfaces for the delivery of “digital content.” The DST applies certain services, including digital interfaces for the delivery of “digital content.” The DST applies
only to companies with annual revenues from the covered services of at least €750 milliononly to companies with annual revenues from the covered services of at least €750 million (approximately $847 million) globally and €25 million (approximately $28 million) in France.153

Federal Register 38488, June 26, 2020. 38488, June 26, 2020.
146 European Commission, “EU and Airbus Member States Take Action to Ensure Full Compliance in the WTO 146 European Commission, “EU and Airbus Member States Take Action to Ensure Full Compliance in the WTO
Aircraft Dispute,” July 24, 2020; and Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement Aircraft Dispute,” July 24, 2020; and Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement
of U.S. World Trade Organization (WTO) Rights in Large Civil Aircraft Dispute,” 85of U.S. World Trade Organization (WTO) Rights in Large Civil Aircraft Dispute,” 85 Federal Register 50866, August 50866, August
18, 2020. 18, 2020.
147 Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement of U.S. World Trade 147 Office of the USTR, “Notice of Modification of Section 301 Action: Enforcement of U.S. World Trade
Organization (WTO) Rights in Large Civil Aircraft Dispute,” 85Organization (WTO) Rights in Large Civil Aircraft Dispute,” 85 Federal Register 50866, August 18, 2020. 50866, August 18, 2020.
148 Office of the USTR, “U.S. Wins $7.5 Billion Award in Airbus Subsidies Case,” Press Release, October 2, 2019, and 148 Office of the USTR, “U.S. Wins $7.5 Billion Award in Airbus Subsidies Case,” Press Release, October 2, 2019, and
“USTR Modifies $7.5 Billion WTO Award Implementation Relating to Illegal Airbus Subsidies,” Press Release, “USTR Modifies $7.5 Billion WTO Award Implementation Relating to Illegal Airbus Subsidies,” Press Release,
August 12, 2020. August 12, 2020.
149 KPMG, “France: Digital Services Tax (3%) Is Enacted,” July 25, 2019. See also, Office of the USTR, “USTR 149 KPMG, “France: Digital Services Tax (3%) Is Enacted,” July 25, 2019. See also, Office of the USTR, “USTR
Announces Initiation of Section 301 Investigation into France’s Digital Services Tax,” Press Release, July 10, 2019, Announces Initiation of Section 301 Investigation into France’s Digital Services Tax,” Press Release, July 10, 2019,
and “Initiation of a Section 301 Investigation of France’s Digital Services Tax,” 84and “Initiation of a Section 301 Investigation of France’s Digital Services Tax,” 84 Federal Register 34042, July 16, 34042, July 16,
2019. For more detail on the investigation, see CRS In Focus IF11564, 2019. For more detail on the investigation, see CRS In Focus IF11564, Section 301 Investigations: Foreign Digital
Services Taxes (DSTs), by Andres B. Schwarzenberg. , by Andres B. Schwarzenberg.
150 According to the USTR, “intermediate” services or “‘digital interface’ services are the provision of an electronic 150 According to the USTR, “intermediate” services or “‘digital interface’ services are the provision of an electronic
interface that users use to connect with other users, especially to buy and sell goods or services between themselves. interface that users use to connect with other users, especially to buy and sell goods or services between themselves.
Notably, this definition excludes where a ‘digital interface’ provider (i.e., a company operating a website) sells to a user Notably, this definition excludes where a ‘digital interface’ provider (i.e., a company operating a website) sells to a user
goods or services that it owns. Additionally, the law excludes from its scope certain types of digital interfaces, namely goods or services that it owns. Additionally, the law excludes from its scope certain types of digital interfaces, namely
those used ‘primarily’ to provide ‘digital content,’ ‘communications,’ ‘payment services,’ various banking and those used ‘primarily’ to provide ‘digital content,’ ‘communications,’ ‘payment services,’ various banking and
financial services, or the placement of targeted ads. The law gives little guidance on the scope of these carve-outs. financial services, or the placement of targeted ads. The law gives little guidance on the scope of these carve-outs.
However, it is generally thought that the ‘digital content’ carve-out excludes interfaces primarily for the delivery of However, it is generally thought that the ‘digital content’ carve-out excludes interfaces primarily for the delivery of
music or movies, that the ‘communications’ carve-out excludes telecommunications providers, and that other carve-music or movies, that the ‘communications’ carve-out excludes telecommunications providers, and that other carve-
outs exclude essentially all financial service, including payment interfaces.” (Office of the USTR, outs exclude essentially all financial service, including payment interfaces.” (Office of the USTR, Section 301
Investigation: Report on France’s Digital Services Tax, December 2, 2019.) , December 2, 2019.)
151 For example, the placement of an ad targeted based on data concerning the individual who views the ad, the 151 For example, the placement of an ad targeted based on data concerning the individual who views the ad, the
monitoring of an ad placed based on data concerning the individual who views the ad, and the sale of user data in monitoring of an ad placed based on data concerning the individual who views the ad, and the sale of user data in
connection with connection with ~~Internet~~internet advertising. (Office of the USTR, advertising. (Office of the USTR, Section 301 Investigation: Report on France’s Digital
Services Tax, December 2, 2019.) , December 2, 2019.)
152 LOI n° 2019-759 du 24 juillet 2019 portant création d’une taxe sur les services numériques et modification de la 152 LOI n° 2019-759 du 24 juillet 2019 portant création d’une taxe sur les services numériques et modification de la
trajectoire de baisse de l’impôt sur les sociétés [LAW no. 2019-759 dated 24 July 2019 concerning creation of a tax on trajectoire de baisse de l’impôt sur les sociétés [LAW no. 2019-759 dated 24 July 2019 concerning creation of a tax on
digital services and modification of the downward correction of the corporation tax]digital services and modification of the downward correction of the corporation tax]. 153 Amounts stated in U.S. dollars are approximate due to exchange rate fluctuations. .
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~~(approximately $847 million) globally and €25 million (approximately $28 million) in France.153~~
Covered companies are required to calculate revenues attributable to France (and, therefore, Covered companies are required to calculate revenues attributable to France (and, therefore,
covered by the DST) using formulas specified in the law. covered by the DST) using formulas specified in the law.
In its investigation, initiated on July 10 and completed on December 2, 2019, the USTR In its investigation, initiated on July 10 and completed on December 2, 2019, the USTR
ultimately concluded that France’s DST discriminates against major U.S. digital companies and is ultimately concluded that France’s DST discriminates against major U.S. digital companies and is
inconsistent with prevailing international tax policy principles.154 France suspended its DST for inconsistent with prevailing international tax policy principles.154 France suspended its DST for
the remainder of 2020 and agreed to continue working with the United States at the Organization the remainder of 2020 and agreed to continue working with the United States at the Organization
for Economic Cooperation and Development (OECD) to reach a compromise on international for Economic Cooperation and Development (OECD) to reach a compromise on international
digital taxation.155 The USTR faced a July 10, 2020 statutory deadline to make a determination on digital taxation.155 The USTR faced a July 10, 2020 statutory deadline to make a determination on
what action to take; it ultimately determined to take retaliatory action in the form of additional what action to take; it ultimately determined to take retaliatory action in the form of additional
duties. On July 10, 2020, the agency announced that it would impose additional tariffs of 25% on duties. On July 10, 2020, the agency announced that it would impose additional tariffs of 25% on
approximately $1.3 billion worth of imports, or about 2.2% of all U.S. goods imports from France approximately $1.3 billion worth of imports, or about 2.2% of all U.S. goods imports from France
in 2019in 2019 (Figure 7).156 However, it delayed the implementation for up to 180 days (that is, up to 156 However, it delayed the implementation for up to 180 days (that is, up to
January 6, 2021) to allow more time for bilateral and multilateral discussions that could lead to a January 6, 2021) to allow more time for bilateral and multilateral discussions that could lead to a
satisfactory resolution of this matter.157 satisfactory resolution of this matter.157
The list of imports on which USTR has The list of imports on which USTR has
determined to impose tariffs is narrower than determined to impose tariffs is narrower than
Figure 7. U.S.-France Trade in 2019
that originally proposed in December 2019, that originally proposed in December 2019,
which had an annual import value of which had an annual import value of
approximately $2.4 billion and covered dairy approximately $2.4 billion and covered dairy
products, soaps, cosmetics, sparkling wine, products, soaps, cosmetics, sparkling wine,
handbags, and porcelain.158 The final list, is handbags, and porcelain.158 The final list, is
limited to certain cosmetics, soaps, and limited to certain cosmetics, soaps, and
leather goods. Moreover, whereas preliminary leather goods. Moreover, whereas preliminary

notice also contemplated possible fees or notice also contemplated possible fees or
Source: Congressional Research Service with data Congressional Research Service with data
restrictions on services imported from France restrictions on services imported from France
from the U.S. Department of Commerce’s Bureau of from the U.S. Department of Commerce’s Bureau of
or provided in the United States by French or provided in the United States by French
Economic Analysis. Economic Analysis.
businesses, USTR’s latest determination businesses, USTR’s latest determination
Notes: Calculations based on pre-tariff import data. Calculations based on pre-tariff import data.
imposes no such restrictions. According to the imposes no such restrictions. According to the
USTR, in determining the level of trade affected by the action, the agency considered the value of USTR, in determining the level of trade affected by the action, the agency considered the value of

~~153 Amounts stated in U.S. dollars are approximate due to exchange rate fluctuations.~~
digital transactions covered by France’s DST and the amount of taxes assessed by France on U.S. 154 Office of the USTR, “Initiation of a Section 301 Investigation of France’s Digital Services Tax,” 84154 Office of the USTR, “Initiation of a Section 301 Investigation of France’s Digital Services Tax,” 84 Federal
Register 34042, July 16, 2019; “Conclusion of USTR’s Investigation Under Section 301 into France’s Digital Services 34042, July 16, 2019; “Conclusion of USTR’s Investigation Under Section 301 into France’s Digital Services
Tax,” Press Release, December 2, 2019; Tax,” Press Release, December 2, 2019; Section 301 Investigation: Report on France’s Digital Services Tax, December , December
2, 2019; and “Notice of Determination and Request for Comments Concerning Action Pursuant to Section 301: 2, 2019; and “Notice of Determination and Request for Comments Concerning Action Pursuant to Section 301:
France’s Digital Services Tax,” 84France’s Digital Services Tax,” 84 Federal Register 66956, December 6, 2019. 66956, December 6, 2019.
155 James Politi, Mehreen Khan, Victor Mallet, and Martin Arnold, “France signals breakthrough in US digital tax 155 James Politi, Mehreen Khan, Victor Mallet, and Martin Arnold, “France signals breakthrough in US digital tax
talks,” talks,” Financial Times, January 20, 2020, and Liz Alderman, Jim Tankersley, and Ana Swanson, “France and U.S. , January 20, 2020, and Liz Alderman, Jim Tankersley, and Ana Swanson, “France and U.S.
Move Toward Temporary Truce in Trade War,” Move Toward Temporary Truce in Trade War,” The New York Times, January 21, 2020. For more detail, see , January 21, 2020. For more detail, see
Organization for Economic Cooperation and Development, “Action 1 Tax Challenges Arising from Digitalisation,” Organization for Economic Cooperation and Development, “Action 1 Tax Challenges Arising from Digitalisation,”
Inclusive Framework on Base Erosion and Profit Shifting (BEPS); CRS Report R45532, Inclusive Framework on Base Erosion and Profit Shifting (BEPS); CRS Report R45532, Digital Services Taxes
(DSTs): Policy and Economic Analysis, by Sean Lowry; and CRS Report R44900, , by Sean Lowry; and CRS Report R44900, Base Erosion and Profit Shifting
(BEPS): OECD Tax Proposals, by Jane G. Gravelle. , by Jane G. Gravelle.
156 Office of the USTR, “Notice of Action in the Section 301 Investigation of France’s Digital Services Tax,” 85 156 Office of the USTR, “Notice of Action in the Section 301 Investigation of France’s Digital Services Tax,” 85
Federal Register 43292, July 16, 2020. While the overall amount of trade affected by the action may be relatively 43292, July 16, 2020. While the overall amount of trade affected by the action may be relatively
small, the impact on particular U.S. stakeholders or sectors of the U.S. economy could be large. small, the impact on particular U.S. stakeholders or sectors of the U.S. economy could be large.
157 Ibid. 157 Ibid.
158 Office of the USTR, “Notice of Determination and Request for Comments Concerning Action Pursuant to Section 158 Office of the USTR, “Notice of Determination and Request for Comments Concerning Action Pursuant to Section
301: France’s Digital Services Tax,” 84301: France’s Digital Services Tax,” 84 Federal Register 66956, December 6, 2019. 66956, December 6, 2019.
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~~digital transactions covered by France’s DST and the amount of taxes assessed by France on U.S.~~
companies.159 Finally, the USTR’s notice contemplates the possibility that the action could be companies.159 Finally, the USTR’s notice contemplates the possibility that the action could be
modified or the 180-day suspension shortened, depending on the progress of discussions with modified or the 180-day suspension shortened, depending on the progress of discussions with
France or in the OECD.160 Because progress at the OECD has been relatively slow, and the France or in the OECD.160 Because progress at the OECD has been relatively slow, and the
deadline to reach an agreement was recently pushed back to mid-2021, French finance minister deadline to reach an agreement was recently pushed back to mid-2021, French finance minister
Bruno LeMaire stated in October 2020 that France would begin collecting its DST in December Bruno LeMaire stated in October 2020 that France would begin collecting its DST in December
2020.161 It remains to be seen if the USTR will move ahead with its tariff hike as planned or 2020.161 It remains to be seen if the USTR will move ahead with its tariff hike as planned or
modify the 180-day suspension. modify the 180-day suspension.
Foreign Digital Services Taxes
On June 2, 2020, the USTR launched a new Section 301 investigation into the DSTs adopted or On June 2, 2020, the USTR launched a new Section 301 investigation into the DSTs adopted or
under consideration by Austria, Brazil, the Czech Republic, the European Union, India, under consideration by Austria, Brazil, the Czech Republic, the European Union, India,
Indonesia, Italy, Spain, Turkey, and the United Kingdom (see Indonesia, Italy, Spain, Turkey, and the United Kingdom (see textbox).162 The USTR also ).162 The USTR also
requested consultations with the governments of these jurisdictions. The investigation is ongoing. requested consultations with the governments of these jurisdictions. The investigation is ongoing.
DSTs Under Investigation
Adopted
 
Austria. Adopted a 5% tax on revenues from online advertising services. It applies to companies with at least Adopted a 5% tax on revenues from online advertising services. It applies to companies with at least
€750 mil ion ($847 mil ion) in annual global revenues for all services and €25 mil ion ($28 mil ion) in in-country €750 mil ion ($847 mil ion) in annual global revenues for all services and €25 mil ion ($28 mil ion) in in-country
revenues for covered services. revenues for covered services.
 
India. Adopted a 2% tax that applies to nonresident companies, and covers online sales of goods and services Adopted a 2% tax that applies to nonresident companies, and covers online sales of goods and services
to, or aimed at, persons in India. The tax applies to companies with annual revenues in excess of approximately to, or aimed at, persons in India. The tax applies to companies with annual revenues in excess of approximately
INR 20 mil ion ($265,000). INR 20 mil ion ($265,000).
 
Indonesia. Adopted a 10% value-added tax on digital products and services provided by Adopted a 10% value-added tax on digital products and services provided by ~~non-resident~~nonresident
companies with a “significant economic presence” in the Indonesian market, including music and video companies with a “significant economic presence” in the Indonesian market, including music and video
streaming services, applications, and digital games. It wil be effective July 1, 2020. streaming services, applications, and digital games. It wil be effective July 1, 2020.
 
Italy. Adopted a 3% tax on revenues from targeted advertising and digital interface services. The tax applies Adopted a 3% tax on revenues from targeted advertising and digital interface services. The tax applies
to companies generating at least €750 mil ion ($847 mil ion) in global revenues for all services and €5.5 mil ion to companies generating at least €750 mil ion ($847 mil ion) in global revenues for all services and €5.5 mil ion
($6 mil ion) in in-country revenues for covered services. ($6 mil ion) in in-country revenues for covered services.
 
~~Turkey~~Spain. Adopted a Adopted a ~~7.5~~3% tax on revenues from targeted advertising% tax on revenues from targeted advertising~~, social media,~~ and digital interface services and digital interface services.
~~The tax applies~~ that would apply to companies generating to companies generating at least €750 mil ion ($847 mil ion) in global revenues €750 mil ion ($847 mil ion) in global revenues ~~from covered digital~~
for all services and services and ~~TRY 20~~€3 mil ion ($3 mil ion) in in-country revenues mil ion ($3 mil ion) in in-country revenues ~~from~~for covered covered ~~digital services. The Turkish~~
~~President has authority to increase the tax rate up to 15%.~~

~~United Kingdom.~~ ~~Adopted a 2% tax on revenues above £25 mil ion from internet search engines~~services. The DST wil go into effect in January 2021.  Turkey. Adopted a 7.5% tax on revenues from targeted advertising, social , social
media, and media, and ~~online marketplaces.~~ digital interface services. The tax applies to companies generating The tax applies to companies generating ~~at least £500~~€750 mil ion ($ mil ion ($~~640~~847 mil ion) in mil ion) in
global revenues from covered digital services and global revenues from covered digital services and ~~£25~~TRY 20 mil ion ($ mil ion ($323 mil ion) in in-country revenues from covered mil ion) in in-country revenues from covered
~~services.~~
~~Under Consideration~~

Brazil. Considering a 1% to 5% tax (to be levied progressively) on revenues from targeted advertising and
~~digital interface services. It would apply to companies generating at least BRL 3 bil ion ($534 mil ion) in annual~~
~~global revenues and at least BRL 100 mil ion ($18 mil ion) in in-country revenues for covered digital services.~~
digital services. The Turkish President has authority to increase the tax rate up to 15%.  United Kingdom. Adopted a 2% tax on revenues above £25 mil ion from internet search engines, social media, and online marketplaces. The tax applies to companies generating at least £500 mil ion ($640 mil ion) in global revenues from covered digital services and £25 mil ion ($32 mil ion) in in-country revenues from covered services. Under Consideration
159 Office of the USTR, “Notice of Action in the Section 301 Investigation of France’s Digital Services Tax,” 85159 Office of the USTR, “Notice of Action in the Section 301 Investigation of France’s Digital Services Tax,” 85
Federal Register 43292, July 16, 2020. 43292, July 16, 2020.
160 Ibid. 160 Ibid.
161 Bjarke Smith-Meyer and Elisa Braun, “France Reinstates Digital Tax, Courting Trade War: Bruno Le Maire Said 161 Bjarke Smith-Meyer and Elisa Braun, “France Reinstates Digital Tax, Courting Trade War: Bruno Le Maire Said
Digital Giants Musts Begin Paying Levy in December,” Digital Giants Musts Begin Paying Levy in December,” Politico, October 14, 2020. , October 14, 2020.
162 Office of the USTR, “USTR Initiates Section 301 Investigations of Digital Services Taxes,” Press Release, June 2, 162 Office of the USTR, “USTR Initiates Section 301 Investigations of Digital Services Taxes,” Press Release, June 2,
2020, and “Initiation of Section 301 Investigations of Digital Services Taxes,” 852020, and “Initiation of Section 301 Investigations of Digital Services Taxes,” 85 Federal Register 34709, June 5, 34709, June 5,
2020. For more detail, see CRS In Focus IF11564, 2020. For more detail, see CRS In Focus IF11564, Section 301 Investigations: Foreign Digital Services Taxes (DSTs), ,
by Andres B. Schwarzenberg. by Andres B. Schwarzenberg.
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  Brazil. Considering a 1% to 5% tax (to be levied progressively) on revenues from targeted advertising and digital interface services. It would apply to companies generating at least BRL 3 bil ion ($534 mil ion) in annual global revenues and at least BRL 100 mil ion ($18 mil ion) in in-country revenues for covered digital services. 
Czech Republic. Considering a 7% tax on revenues from targeted advertising and digital interface services. It Considering a 7% tax on revenues from targeted advertising and digital interface services. It
would apply to companies generating €750 mil ion ($847 mil ion) in annual global revenues for all services and would apply to companies generating €750 mil ion ($847 mil ion) in annual global revenues for all services and
CZK 50 mil ion ($2 mil ion) in in-country revenues for covered services. CZK 50 mil ion ($2 mil ion) in in-country revenues for covered services.
 
European Union. Considering a DST as part of the financing package for its proposed Coronavirus Disease Considering a DST as part of the financing package for its proposed Coronavirus Disease
2019 (COVID-19) recovery plan. It is based on a 2018 DST proposal that would: (1) include a 3% tax on 2019 (COVID-19) recovery plan. It is based on a 2018 DST proposal that would: (1) include a 3% tax on
revenues from targeted advertising and digital interface services, and (2) apply only to companies generating at revenues from targeted advertising and digital interface services, and (2) apply only to companies generating at
least €750 mil ion ($847 mil ion) in global revenues from covered digital services and at least €50 mil ion ($56 least €750 mil ion ($847 mil ion) in global revenues from covered digital services and at least €50 mil ion ($56
mil ion) in EU-wide revenuesmil ion) in EU-wide revenues ~~for covered services.~~

Spain. Considering a 3% tax on revenues from targeted advertising and digital interface services that would
~~apply to companies generating at least €750 mil ion (847 mil ion) in global revenues for all services and €3~~
~~mil ion ($3 mil ion) in in-country revenues~~ for covered services. for covered services.
Source: Adapted from Office of the USTR, 85 Adapted from Office of the USTR, 85 Federal Register 34709 (June 6, 2020). 34709 (June 6, 2020).
Note: Amounts stated in U.S. dol ars are approximate due to exchange rate fluctuations. Amounts stated in U.S. dol ars are approximate due to exchange rate fluctuations.
As part of the investigation, the agency may seek to address several issues, including As part of the investigation, the agency may seek to address several issues, including:
 Are the taxes discriminatory and do they burden or restrict U.S. commerce? Are  Are the taxes discriminatory and do they burden or restrict U.S. commerce? Are
these jurisdictions unfairly aiming to tax certain U.S. firms? these jurisdictions unfairly aiming to tax certain U.S. firms?
 What are the implications of applying the taxes retroactively? Some taxes are (or  What are the implications of applying the taxes retroactively? Some taxes are (or
will be) applied retroactively, raising administrative and legal questions as to how will be) applied retroactively, raising administrative and legal questions as to how
firms will be able to calculate their potential liabilities. firms will be able to calculate their potential liabilities.
 Is the tax policy “unreasonable”? The USTR has indicated that these DSTs  Is the tax policy “unreasonable”? The USTR has indicated that these DSTs
appear to diverge from norms reflected in U.S. and international tax systems, appear to diverge from norms reflected in U.S. and international tax systems,
particularly because of their extraterritorial scope and their taxing of revenue particularly because of their extraterritorial scope and their taxing of revenue
instead of income. instead of income.
 Are the DSTs inconsistent with international commitments and obligations under  Are the DSTs inconsistent with international commitments and obligations under
the WTO or other agreements? the WTO or other agreements?
 Does the WTO General Agreement on Trade in Services (GATS) cover digital  Does the WTO General Agreement on Trade in Services (GATS) cover digital
trade? If so, the USTR may invoke the dispute settlement procedures of the WTO trade? If so, the USTR may invoke the dispute settlement procedures of the WTO
DSU. DSU.
The United States and more than 130 countries, comprising both members and nonmembers of The United States and more than 130 countries, comprising both members and nonmembers of
the OECD, are negotiating policy recommendations in an attempt to update the global tax system the OECD, are negotiating policy recommendations in an attempt to update the global tax system
and develop an international digital tax framework.163 The OECD Secretariat originally and develop an international digital tax framework.163 The OECD Secretariat originally
announced its intent to conclude these negotiations by the end of 2020. However, due to the announced its intent to conclude these negotiations by the end of 2020. However, due to the
COVID-19 pandemic and critical policy differences among countries, the organization as of COVID-19 pandemic and critical policy differences among countries, the organization as of
October 2020 was aiming to reach a deal by mid-2021.164 The European Commission has stated October 2020 was aiming to reach a deal by mid-2021.164 The European Commission has stated
that if work at the OECD level fails, the EU would go ahead with a common taxation framework that if work at the OECD level fails, the EU would go ahead with a common taxation framework
for digital services across the EU during the first half of 2021.165 EU officials are reportedly for digital services across the EU during the first half of 2021.165 EU officials are reportedly

163 Organization for Economic Cooperation and Development, “Action 1 Tax Challenges Arising from Digitalisation,” 163 Organization for Economic Cooperation and Development, “Action 1 Tax Challenges Arising from Digitalisation,”
Inclusive Framework on Base Erosion and Profit Shifting (BEPS). Inclusive Framework on Base Erosion and Profit Shifting (BEPS).
164 Organization for Economic Cooperation and Development, 164 Organization for Economic Cooperation and Development, Tax Challenges Arising from Digitalization—Report on
the Pillar Two Blueprint: Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, , OECD/G20 Base Erosion and Profit Shifting Project,
October 9, 2020. October 9, 2020.
165 European Commission, “Remarks by Executive Vice-President Dombrovskis at the Informal ECOFIN Press 165 European Commission, “Remarks by Executive Vice-President Dombrovskis at the Informal ECOFIN Press
Conference,” Speech, September 12, 2020. Conference,” Speech, September 12, 2020.
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hoping that an EU-wide DST would prevent the proliferation of unilateral measures by individual hoping that an EU-wide DST would prevent the proliferation of unilateral measures by individual
EU member states that could fragment the single market.166 EU member states that could fragment the single market.166
If an international tax agreement is not reached at the OECD in the near term, and the USTR If an international tax agreement is not reached at the OECD in the near term, and the USTR
determines that the DST of any country under investigation is unreasonable or discriminatory and determines that the DST of any country under investigation is unreasonable or discriminatory and
burdens or restricts U.S. commerce, the USTR could seek to negotiate and enter into a binding burdens or restricts U.S. commerce, the USTR could seek to negotiate and enter into a binding
agreement that commits a trading partner to eliminate the tax policy or that provides agreement that commits a trading partner to eliminate the tax policy or that provides
compensation to the United States. Absent mutual resolution, a likely scenario would be the compensation to the United States. Absent mutual resolution, a likely scenario would be the
imposition of tariffs and the escalation of tensions in U.S. economic relations with these trading imposition of tariffs and the escalation of tensions in U.S. economic relations with these trading
partners. Should the United States impose retaliatory trade measures, the affected parties could partners. Should the United States impose retaliatory trade measures, the affected parties could
pursue WTO dispute settlement or retaliate by targeting U.S. exports. pursue WTO dispute settlement or retaliate by targeting U.S. exports.
Vietnam: Timber Trade and Currency Practices
On October 2, 2020, the USTR announced that it had initiated two separate Section 301 On October 2, 2020, the USTR announced that it had initiated two separate Section 301
investigations with respect to Vietnam’s trade with the United States.167 The investigations pertain investigations with respect to Vietnam’s trade with the United States.167 The investigations pertain
to Vietnam’s acts, policies, and practices related to timber trade and currency valuation. The to Vietnam’s acts, policies, and practices related to timber trade and currency valuation. The
USTR will review Vietnam’s importation of timber that may have been illegally harvested or USTR will review Vietnam’s importation of timber that may have been illegally harvested or
traded, used as input for its timber product-manufacturing sector, and subsequently exported to traded, used as input for its timber product-manufacturing sector, and subsequently exported to
the United States.168 In a separate investigation, the USTR will also review, in consultation with the United States.168 In a separate investigation, the USTR will also review, in consultation with
the Department of the Treasury, any practices that may have contributed to the undervaluation of the Department of the Treasury, any practices that may have contributed to the undervaluation of
Vietnam’s currency and impaired the competitiveness of U.S. exports.169 The USTR has Vietnam’s currency and impaired the competitiveness of U.S. exports.169 The USTR has
requested consultations with the government of Vietnamrequested consultations with the government of Vietnam ~~and is seeking public comments—~~
~~through November 12, 2020—~~, sought public comments on any issue covered by the investigationson any issue covered by the investigations., and will held public hearings on December 28 and 29, 2020.170
The Trump Administration and some Members of Congress have expressed concern over the The Trump Administration and some Members of Congress have expressed concern over the
rapidly growing U.S. merchandise trade deficit with Vietnam, which reached an all-time high of rapidly growing U.S. merchandise trade deficit with Vietnam, which reached an all-time high of
$55.8 billion in 2019 (a 74% increase from the level registered in 2016).$55.8 billion in 2019 (a 74% increase from the level registered in 2016).~~170~~171 They have attributed They have attributed
this trend primarily to Vietnam’s trade practices and unfair export competitiveness, which they this trend primarily to Vietnam’s trade practices and unfair export competitiveness, which they
claim is afforded by manipulative currency undervaluation.claim is afforded by manipulative currency undervaluation.~~171~~172 Others contend that recent changes Others contend that recent changes
~~in the sources of U.S. imports are due mainly to other factors. For example, manufacturing~~
~~companies are reportedly relocating production from other countries in Asia to Vietnam to take~~

166 See, for example, Deloitte, “European Union Alert: European Commission Proposes Tax on Digital Services, 166 See, for example, Deloitte, “European Union Alert: European Commission Proposes Tax on Digital Services,
Structural Changes to PE Rules,” March 23, 2018, and European Commission, “Commission Gathers Views on How to Structural Changes to PE Rules,” March 23, 2018, and European Commission, “Commission Gathers Views on How to
Tax the Digital Economy Fairly and Effectively,” Press Release, October 26, 2017. Tax the Digital Economy Fairly and Effectively,” Press Release, October 26, 2017.
167 Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020. For more 167 Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020. For more
detail, see CRS In Focus IF11683, detail, see CRS In Focus IF11683, Section 301 Investigations: Vietnam’s Timber Trade and Currency Practices, by , by
Andres B. Schwarzenberg and Rebecca M. Nelson. Andres B. Schwarzenberg and Rebecca M. Nelson.
168 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the 168 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the
Import and Use of Illegal Timber,” 85Import and Use of Illegal Timber,” 85 Federal Register 63639, October 8, 2020. 63639, October 8, 2020.
169 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to 169 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to
Currency Valuation,” 85Currency Valuation,” 85 Federal Register 63637, October 8, 2020. 63637, October 8, 2020.
170 170 For more detail, see Office of the USTR, “Notice of Public Hearing in Section 301 Investigation of Vietnam’s Acts, Policies, and Practices Related to the Import and Use of Illegal Timber,” 85 Federal Register 75398, November 25, 2020, and “Notice of Public Hearing in Section 301 Investigation of Vietnam’s Acts, Policies, and Practices Related to Currency Valuation,” 85 Federal Register 75397, November 25, 2020. 171 CRS calculations with data sourced from the U.S. Department of Commerce’s Census Bureau. CRS calculations with data sourced from the U.S. Department of Commerce’s Census Bureau.
~~171~~172 See, for example, David Lawder, “U.S. Treasury says Vietnam currency was undervalued in 2019 in tire probe See, for example, David Lawder, “U.S. Treasury says Vietnam currency was undervalued in 2019 in tire probe
assessment,” assessment,” Reuters, August 25, 2020; James Politi, “US Proposes Punishment For Countries That Manipulate , August 25, 2020; James Politi, “US Proposes Punishment For Countries That Manipulate
Currencies: President Trump Seeks To Inject Measures Preventing Devaluations Into Trade Deals,” Currencies: President Trump Seeks To Inject Measures Preventing Devaluations Into Trade Deals,” Financial Times, ,
May 24, 2019; Dat Nguyen, “US Adds Vietnam to Currency Manipulation Watchlist,” May 24, 2019; Dat Nguyen, “US Adds Vietnam to Currency Manipulation Watchlist,” VN Express International, May , May
29, 2019; Steve Goldstein, “Trump Threatens Vietnam, Which Has Been Benefiting From U.S. Tariffs on China,” 29, 2019; Steve Goldstein, “Trump Threatens Vietnam, Which Has Been Benefiting From U.S. Tariffs on China,”
Market Watch, June 26, 2019; Reuters Staff, “After Trump Threat, Vietnam Says It Wants Free and Fair Trade with , June 26, 2019; Reuters Staff, “After Trump Threat, Vietnam Says It Wants Free and Fair Trade with
U.S.,” U.S.,” Reuters, June 28, 2019; and John Boudreau and Michelle Jamrisko, “Lighthizer Says Vietnam Must Cut Its, June 28, 2019; and John Boudreau and Michelle Jamrisko, “Lighthizer Says Vietnam Must Cut Its
Trade Surplus with U.S.,” Bloomberg~~, July 29, 2019.~~
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in the sources of U.S. imports are due mainly to other factors. For example, manufacturing companies are reportedly relocating production from other countries in Asia to Vietnam to take advantage of lower costs and to avoid Section 301 tariffs on U.S. imports from China.advantage of lower costs and to avoid Section 301 tariffs on U.S. imports from China.~~172~~173 In In
August 2020, the Department of the Treasury found that Vietnam—through its central bank, the August 2020, the Department of the Treasury found that Vietnam—through its central bank, the
State Bank of Vietnam (SBV)—deliberately undervalued its currency against the U.S. dollar in State Bank of Vietnam (SBV)—deliberately undervalued its currency against the U.S. dollar in
2019.2019.~~173~~174 The assessment is part of a countervailing duty (CVD) investigation by the Department The assessment is part of a countervailing duty (CVD) investigation by the Department
of Commerce, which, as of this year, is allowed to consider currency undervaluation in its subsidy of Commerce, which, as of this year, is allowed to consider currency undervaluation in its subsidy
investigations. investigations.
Import and Use of Illegal Timber
During the past decade, Vietnam has become one of the world’s largest exporting countries of During the past decade, Vietnam has become one of the world’s largest exporting countries of
timber and timber products, with exports valued at approximately $9.5 billion in 2019.timber and timber products, with exports valued at approximately $9.5 billion in 2019.~~174~~175 As a As a
processing hub, Vietnam is heavily reliant on imports of timber harvested in other countries, processing hub, Vietnam is heavily reliant on imports of timber harvested in other countries,
particularly for the manufacturing and export of high-end products such as furniture. According to particularly for the manufacturing and export of high-end products such as furniture. According to
the USTR, a significant portion of the timber inputs used in these products may have been the USTR, a significant portion of the timber inputs used in these products may have been
illegally harvested or traded.illegally harvested or traded.~~175~~176 The agency further asserts that some of that timber may be from The agency further asserts that some of that timber may be from
species listed under the Convention on International Trade in Endangered Species of Wild Fauna species listed under the Convention on International Trade in Endangered Species of Wild Fauna
and Flora (CITES).and Flora (CITES).~~176~~177 As parties to the Convention, both the United States and Vietnam are bound As parties to the Convention, both the United States and Vietnam are bound
by CITES provisions designed to curb illegal timber trade.by CITES provisions designed to curb illegal timber trade.~~177~~178
The main destination market for Vietnam’s exports was the United States (48%). The main destination market for Vietnam’s exports was the United States (48%).~~178~~179 In announcing In announcing
the investigation, the USTR noted that “[u]sing illegal timber in wood products exported to the the investigation, the USTR noted that “[u]sing illegal timber in wood products exported to the
U.S. market harms the environment and is unfair to U.S. workers and businesses who follow the U.S. market harms the environment and is unfair to U.S. workers and businesses who follow the
rules by using legally harvested timber.”rules by using legally harvested timber.”~~179~~180 In 2019, Vietnam was the third largest supplier of U.S. In 2019, Vietnam was the third largest supplier of U.S.
timber and timber-based product imports, after Canada and China. U.S. imports from Vietnam of timber and timber-based product imports, after Canada and China. U.S. imports from Vietnam of
these products totaled $5.8 billion—of which $3.7 billion accounted for wooden furniturthese products totaled $5.8 billion—of which $3.7 billion accounted for wooden furniture (Figure
8).~~180~~181 In nominal terms, this is up 34% from 2018, and it represents a 77% increase from 2016. In nominal terms, this is up 34% from 2018, and it represents a 77% increase from 2016.

~~172~~Trade Surplus with U.S.,” Bloomberg, July 29, 2019. 173 See, for example, Brad W. Setser, “Vietnam Looks To Be Winning Trump See, for example, Brad W. Setser, “Vietnam Looks To Be Winning Trump'’s Trade War,” Council on Foreign s Trade War,” Council on Foreign
Relations, May 27, 2019, and Paul Wiseman, Anne D'innocenzio, and Joe Relations, May 27, 2019, and Paul Wiseman, Anne D'innocenzio, and Joe ~~Mcdonald~~McDonald, “Facing Trump’s Tariffs, Some , “Facing Trump’s Tariffs, Some
Companies Move, Change or Wait,” AP News, July 18, 2019. See, also, Chuin-Wei Yap, “American Tariffs on China Companies Move, Change or Wait,” AP News, July 18, 2019. See, also, Chuin-Wei Yap, “American Tariffs on China
Are Being Blunted by Trade Cheats,” The Wall Street Journal, June 26, 2019, and Eamon Barrett, “Vietnam Is Are Being Blunted by Trade Cheats,” The Wall Street Journal, June 26, 2019, and Eamon Barrett, “Vietnam Is
Receiving Diverted U.S. Orders from China. That Doesn’t Mean It’s Winning the Trade War,” Fortune, July 18, 2019. Receiving Diverted U.S. Orders from China. That Doesn’t Mean It’s Winning the Trade War,” Fortune, July 18, 2019.
~~173~~174 For more detail on how countries can allegedly use policies to manipulate the value of their currency to gain an For more detail on how countries can allegedly use policies to manipulate the value of their currency to gain an
unfair trade advantage against other countries, see CRS In Focus IF10049, unfair trade advantage against other countries, see CRS In Focus IF10049, Debates over Currency Manipulation, by , by
Rebecca M. Nelson. Rebecca M. Nelson.
~~174~~175 CRS calculations using data sourced from UN Comtrade Database. CRS calculations using data sourced from UN Comtrade Database.
~~175~~176 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the
Import and Use of Illegal Timber,” 85Import and Use of Illegal Timber,” 85 Federal Register 63639, October 8, 2020. 63639, October 8, 2020.
~~176~~ 177 Ibid. Ibid.
~~177~~178 See, for example, Convention on International Trade in Endangered Species of Wild Fauna and Flora, “CITES See, for example, Convention on International Trade in Endangered Species of Wild Fauna and Flora, “CITES
Conference to Strengthen Wildlife Trade Rules for Fisheries, Timber, Exotic Pets, Elephants and More,” Press Release, Conference to Strengthen Wildlife Trade Rules for Fisheries, Timber, Exotic Pets, Elephants and More,” Press Release,
August 7, 2019. August 7, 2019.
~~178~~179 CRS calculations using data sourced from UN Comtrade Database. CRS calculations using data sourced from UN Comtrade Database.
~~179~~180 Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020. Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020.
~~180~~181 CRS calculations using data sourced from the U.S. International Trade Commission’s DataWeb. CRS calculations using data sourced from the U.S. International Trade Commission’s DataWeb.
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Figure 8. U.S. Imports from Vietnam: Timber and Timber-Based Products

Source: Congressional Research Service with data from USITC’s DataWeb. Congressional Research Service with data from USITC’s DataWeb.
Notes: Not adjusted for inflation. *Calculations do not include wood pulp, paper and paperboard, and printed Not adjusted for inflation. *Calculations do not include wood pulp, paper and paperboard, and printed
books and newspapers. books and newspapers.
In light of these concerns, the USTR is to address several issues in its ongoing investigation, In light of these concerns, the USTR is to address several issues in its ongoing investigation,
includingincluding:
 Is Vietnam importing illegal timber to supply the inputs needed for its timber-  Is Vietnam importing illegal timber to supply the inputs needed for its timber-
manufacturing sector? manufacturing sector?~~181~~182 Are these imports inconsistent with Vietnam’s domestic laws Are these imports inconsistent with Vietnam’s domestic laws
(e.g., those concerning the import, processing, and re-export of timber), the laws of (e.g., those concerning the import, processing, and re-export of timber), the laws of
exporting countries, or international agreements and commitments? The agency is to exporting countries, or international agreements and commitments? The agency is to
examine whether timber imported by Vietnam has been harvested against the laws of examine whether timber imported by Vietnam has been harvested against the laws of
source countries, particularly those of Cambodia, and traded illegally—for example, in source countries, particularly those of Cambodia, and traded illegally—for example, in
violation of log export bans, CITES, or U.S. wildlife trade laws and regulations. violation of log export bans, CITES, or U.S. wildlife trade laws and regulations.
 Do Vietnamese officials improperly record the origin of timber crossing the  Do Vietnamese officials improperly record the origin of timber crossing the ~~Cambodia-~~
Cambodia-Vietnam border, facilitate illegal timber imports, or allow the importation of CITES-listed Vietnam border, facilitate illegal timber imports, or allow the importation of CITES-listed
species based on invalid permits?species based on invalid permits?~~182~~183 The USTR is to investigate if certain aspects of the The USTR is to investigate if certain aspects of the
importation and processing of this timber may violate Vietnam’s domestic laws and be importation and processing of this timber may violate Vietnam’s domestic laws and be
inconsistent with CITES. The agency alleges that timber processors in Vietnam may be inconsistent with CITES. The agency alleges that timber processors in Vietnam may be
failing to ensure the lawful origins of the timber they use and that Vietnamese authorities failing to ensure the lawful origins of the timber they use and that Vietnamese authorities
may not be enforcing import or re-export permits or certification requirements. may not be enforcing import or re-export permits or certification requirements.
 To what extent are products made in Vietnam from illegal timber, including  To what extent are products made in Vietnam from illegal timber, including ~~wooden~~
wooden furniture, imported into the United States?furniture, imported into the United States?~~183~~184 The agency seeks to determine if Vietnam’s The agency seeks to determine if Vietnam’s
practices related to the import and use of illegal timber burden or restrict U.S. commerce practices related to the import and use of illegal timber burden or restrict U.S. commerce
and what actions the United States should take to address them. and what actions the United States should take to address them.

~~181~~182 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to the
Import and Use of Illegal Timber,” 85Import and Use of Illegal Timber,” 85 Federal Register 63639, October 8, 2020. 63639, October 8, 2020.
~~182~~183 Ibid. Ibid.
~~183~~184 Ibid. Ibid.
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Currency Valuation
The government of Vietnam, through the SBV, tightly manages the value of its currency—the The government of Vietnam, through the SBV, tightly manages the value of its currency—the
Vietnamese dong. (SBV’s management of the dong is tied closely to the U.S. dollar.) The USTR Vietnamese dong. (SBV’s management of the dong is tied closely to the U.S. dollar.) The USTR
reviewed evidence that indicates that the dong has been undervalued in recent years, which may reviewed evidence that indicates that the dong has been undervalued in recent years, which may
be due, in part, to SBV’s active intervention in the foreign exchange market.be due, in part, to SBV’s active intervention in the foreign exchange market.~~184~~185 In announcing the In announcing the
investigation, U.S. Trade Representative Robert Lighthizer stated that “unfair currency practices investigation, U.S. Trade Representative Robert Lighthizer stated that “unfair currency practices
can harm U.S. workers and businesses that compete with Vietnamese products that may be can harm U.S. workers and businesses that compete with Vietnamese products that may be
artificially lower-priced because of currency undervaluation.”artificially lower-priced because of currency undervaluation.” ~~185~~186
The USTR seeks to determine whether Vietnam’s currency practices are unreasonable or The USTR seeks to determine whether Vietnam’s currency practices are unreasonable or
discriminatory, and whether they burden or restrict U.S. commerce. Specifically, the investigation discriminatory, and whether they burden or restrict U.S. commerce. Specifically, the investigation
will focus on (1) whether SBV’s interventions in exchange markets contribute to the will focus on (1) whether SBV’s interventions in exchange markets contribute to the
undervaluation of the dong; (2) the specific acts, policies, or practices that may contribute such undervaluation of the dong; (2) the specific acts, policies, or practices that may contribute such
undervaluation; (3) the nature and level of burden or restriction on U.S. commerce caused by undervaluation; (3) the nature and level of burden or restriction on U.S. commerce caused by
these practices, particularly the undervaluation of the dong; and (4) the actions the United States these practices, particularly the undervaluation of the dong; and (4) the actions the United States
should take to address them.should take to address them.~~186~~187 In conducting its investigation, the USTR stated that it would In conducting its investigation, the USTR stated that it would
work with the Department of the Treasury on matters related to currency valuation and exchange work with the Department of the Treasury on matters related to currency valuation and exchange
rate policies. The investigation is ongoing. rate policies. The investigation is ongoing.
Tariff Exclusions on U.S. Imports from China
As noted above, in 2018 the USTR determined, pursuant to an investigation under Section 301, As noted above, in 2018 the USTR determined, pursuant to an investigation under Section 301,
that China’s acts, policies, and practices related to technology transfer, IP, and innovation are that China’s acts, policies, and practices related to technology transfer, IP, and innovation are
unreasonable or discriminatory, and burden or restrict U.S. commerce. To counter them and unreasonable or discriminatory, and burden or restrict U.S. commerce. To counter them and
obtain their elimination, the Trump Administration imposed, under Section 301, four rounds of obtain their elimination, the Trump Administration imposed, under Section 301, four rounds of
additional tariffs of up to 25% on approximately two-thirds of U.S. imports from China (under additional tariffs of up to 25% on approximately two-thirds of U.S. imports from China (under
four separate actions, per Lists 1, 2, 3, and 4). four separate actions, per Lists 1, 2, 3, and 4).
During the Section 301 notice, hearing, and comment period on proposed tariff increases, the During the Section 301 notice, hearing, and comment period on proposed tariff increases, the
USTR heard from numerous U.S. stakeholders who expressed concerns about how additional USTR heard from numerous U.S. stakeholders who expressed concerns about how additional
tariffs could affect their businesses, as well as the possible impact on U.S. consumers. In tariffs could affect their businesses, as well as the possible impact on U.S. consumers. In
response, for each Section 301 action regarding a new list of covered products, the USTR response, for each Section 301 action regarding a new list of covered products, the USTR
instituted “tariff exclusions” for certain U.S. imports from China that would otherwise be subject instituted “tariff exclusions” for certain U.S. imports from China that would otherwise be subject
to tariffs whereby interested parties could request that a particular product be excluded from the to tariffs whereby interested parties could request that a particular product be excluded from the
tariffs, subject to certain criteria. This was the first and only time that the agency has established tariffs, subject to certain criteria. This was the first and only time that the agency has established
an exclusion request process, and several Members of Congress raised concerns about its an exclusion request process, and several Members of Congress raised concerns about its
implementation.implementation.~~187~~188 (The USTR has not established an exclusion process for U.S. imports from the (The USTR has not established an exclusion process for U.S. imports from the

~~184~~185 In January 2020, the U.S. Department of the Treasury found that Vietnam and nine other major trading partners In January 2020, the U.S. Department of the Treasury found that Vietnam and nine other major trading partners
warranted placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their warranted placement on Treasury’s “Monitoring List” of major trading partners that merit close attention to their
currency practices. (U.S. Department of the Treasury, “Treasury Releases Report on Macroeconomic and Foreign currency practices. (U.S. Department of the Treasury, “Treasury Releases Report on Macroeconomic and Foreign
Exchange Policies of Major Trading Partners of the United States,” Press Release, January 13, 2020.). For more recent Exchange Policies of Major Trading Partners of the United States,” Press Release, January 13, 2020.). For more recent
developments, see, for example, David Lawder, “U.S. Treasury says Vietnam currency was undervalued in 2019 in tire developments, see, for example, David Lawder, “U.S. Treasury says Vietnam currency was undervalued in 2019 in tire
probe assessment,” probe assessment,” Reuters, August 25, 2020; Michelle Jamrisko, “U.S. Treasury Says Vietnam Deliberately , August 25, 2020; Michelle Jamrisko, “U.S. Treasury Says Vietnam Deliberately
Weakened Currency,” Weakened Currency,” Bloomberg, August 25, 2020. , August 25, 2020.
~~185~~186 Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020. Office of the USTR, “USTR Initiates Vietnam Section 301 Investigation,” Press Release, October 2, 2020.
~~186~~187 Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to Office of the USTR, “Initiation of Section 301 Investigation: Vietnam’s Acts, Policies, and Practices Related to
Currency Valuation,” 85Currency Valuation,” 85 Federal Register 63637, October 8, 2020. 63637, October 8, 2020.
~~187~~188 See, for example, Representative Ron Kind, “Rep. Ron Kind Introduces Bipartisan Bill to Establish a Section 301 See, for example, Representative Ron Kind, “Rep. Ron Kind Introduces Bipartisan Bill to Establish a Section 301
Exclusion Process for Tariffs,” Press Release, February 28, 2019, and Representative Jackie Walorski, “Walorski, Kind Exclusion Process for Tariffs,” Press Release, February 28, 2019, and Representative Jackie Walorski, “Walorski, Kind
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EU subject to Section 301 tariffs.) Title III of the Trade Act of 1974 does not outline a formal EU subject to Section 301 tariffs.) Title III of the Trade Act of 1974 does not outline a formal
process for exclusions or require the USTR to establish one. The determination to do so appears process for exclusions or require the USTR to establish one. The determination to do so appears
to be solely at the USTR’s discretion. to be solely at the USTR’s discretion.
In particular, some Members and stakeholders have questioned USTR’s ability to “pick winners In particular, some Members and stakeholders have questioned USTR’s ability to “pick winners
and losers” through granting or denying requests, or have pushed for broad tariff relief amid and losers” through granting or denying requests, or have pushed for broad tariff relief amid
concerns about the negative impact of tariffs on the U.S. economy.concerns about the negative impact of tariffs on the U.S. economy.~~188~~189 Others, however, not Others, however, not
wanting to undermine the use of Section 301 to address China’s unfair trade practices, have wanting to undermine the use of Section 301 to address China’s unfair trade practices, have
discouraged the USTR from granting tariff exclusions at all.discouraged the USTR from granting tariff exclusions at all.~~189~~190 To date, the agency has To date, the agency has
established an exclusion process for each of the four stages of tariff increases under Section established an exclusion process for each of the four stages of tariff increases under Section
301—all of which have now closed.301—all of which have now closed.~~190~~191
The USTR’s latest action in response to the COVID-19 pandemic seems to suggest that new The USTR’s latest action in response to the COVID-19 pandemic seems to suggest that new
exclusions might be limited in scope to apply to trade in medical supplies related to COVID-19, exclusions might be limited in scope to apply to trade in medical supplies related to COVID-19,
and not be aimed at providing broader tariff relief.and not be aimed at providing broader tariff relief.~~191~~192 The agency has The agency has ~~recently~~ prioritized the prioritized the
review of exclusion requests concerning medical products, resulting in new exclusions for some review of exclusion requests concerning medical products, resulting in new exclusions for some
personal protective equipment (PPE) in short supply. Separately, the USTR requested public personal protective equipment (PPE) in short supply. Separately, the USTR requested public
comments on whether to remove additional products covered by any tariff list that are relevant to comments on whether to remove additional products covered by any tariff list that are relevant to
the U.S. response to COVID-19.the U.S. response to COVID-19.~~192~~193
Tariff Exclusion Process
The tariff exclusion process enabled interested parties—including law firms, trade associations, The tariff exclusion process enabled interested parties—including law firms, trade associations,
and customs brokers, among others—to petition for an exemption from the Section 301 tariff and customs brokers, among others—to petition for an exemption from the Section 301 tariff
increases for specific imports classified within a 10-digit Harmonized Tariff Schedule of the increases for specific imports classified within a 10-digit Harmonized Tariff Schedule of the
United States (HTSUS) subheading. The time window to submit new exclusion requests closed in United States (HTSUS) subheading. The time window to submit new exclusion requests closed in
January 2020, but the USTR is considering extensions of exclusions granted from Lists 1, 2, 3, January 2020, but the USTR is considering extensions of exclusions granted from Lists 1, 2, 3,
and 4. While the USTR approved, on average, 35% of requests under the first two actions, the and 4. While the USTR approved, on average, 35% of requests under the first two actions, the
approval rates under the third and four actions were 5% and 7%, respectively.approval rates under the third and four actions were 5% and 7%, respectively.~~193~~194
According to the USTR, all requests are evaluated on a case-by-case basis. According to the USTR, all requests are evaluated on a case-by-case basis.~~194~~195 The agency has The agency has
indicated that, in determining which requests to grant, it considers the following: indicated that, in determining which requests to grant, it considers the following:

Introduce Bicameral, Bipartisan Bill to Establish a Section 301 Exclusion Process,” February 28, 2019. For a list of Introduce Bicameral, Bipartisan Bill to Establish a Section 301 Exclusion Process,” February 28, 2019. For a list of
legislation introduced in the 116th Congress to alter the President’s trade authorities under Section 301, seelegislation introduced in the 116th Congress to alter the President’s trade authorities under Section 301, see Table B-1.
~~188~~189 See, for example, Ed Crooks and Fan Fei, “Trade War Winners and Losers Grapple with Trump Tariff Chaos,” See, for example, Ed Crooks and Fan Fei, “Trade War Winners and Losers Grapple with Trump Tariff Chaos,”
Financial Times, July 23, 2018. , July 23, 2018.
~~189~~190 Since first announcing the procedures and criteria related to requests for product exclusions, the USTR has indicated Since first announcing the procedures and criteria related to requests for product exclusions, the USTR has indicated
that it evaluates each request “on a case-by-case basis, taking into account whether the exclusion would undermine the that it evaluates each request “on a case-by-case basis, taking into account whether the exclusion would undermine the
objective of the Section 301 investigation.” See, for example, Office of the USTR, “Procedures to Consider Requests objective of the Section 301 investigation.” See, for example, Office of the USTR, “Procedures to Consider Requests
for Exclusion of Particular Products from the Determination of Action Pursuant to Section 301: China’s Acts, Policies, for Exclusion of Particular Products from the Determination of Action Pursuant to Section 301: China’s Acts, Policies,
and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 83and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 83 Federal Register 32181, July 32181, July
11, 2018. 11, 2018.
~~190~~191 For more detail on the exclusion process for each of the four stages, see Office of the USTR, “China Section 301— For more detail on the exclusion process for each of the four stages, see Office of the USTR, “China Section 301—
Tariff Actions and Exclusion Process.” Tariff Actions and Exclusion Process.”
~~191~~192 Office of the USTR, “Request for Comments on Additional Modifications to the 301 Action to Address COVID-19: Office of the USTR, “Request for Comments on Additional Modifications to the 301 Action to Address COVID-19:
ChinaChina'’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 85s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 85
Federal Register 16987, March 25, 2020. 16987, March 25, 2020.
~~192~~193 Office of the USTR, “USTR: Response to Coronavirus Crisis,” Press Release, March 20, 2020. Office of the USTR, “USTR: Response to Coronavirus Crisis,” Press Release, March 20, 2020.
~~193~~194 CRS calculations based on information sourced from the Office of the USTR, “China Section 301—Tariff Actions CRS calculations based on information sourced from the Office of the USTR, “China Section 301—Tariff Actions
and Exclusion Process.” and Exclusion Process.”
~~194~~195 See, for example, Office of the USTR, “Procedures to Consider Requests for Exclusion of Particular Products from See, for example, Office of the USTR, “Procedures to Consider Requests for Exclusion of Particular Products from
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1. availability of the product in question from non-Chinese sources, 1. availability of the product in question from non-Chinese sources,
2. attempts by the importer to source the product from the United States or third 2. attempts by the importer to source the product from the United States or third
countries, countries,
3. the extent to which the imposition of Section 301 tariffs on the particular product 3. the extent to which the imposition of Section 301 tariffs on the particular product
will cause severe economic harm to the importer or other U.S. interests, and will cause severe economic harm to the importer or other U.S. interests, and
4. the strategic importance of the product to “Made in China 2025” or other Chinese 4. the strategic importance of the product to “Made in China 2025” or other Chinese
industrial programs. industrial programs.~~195~~196
Past exclusions also have been granted for reasons that are thought to include, among others, U.S. Past exclusions also have been granted for reasons that are thought to include, among others, U.S.
national security interests and demonstrable economic hardship from the tariffs for small national security interests and demonstrable economic hardship from the tariffs for small
businesses. businesses.
There is no timetable for providing responses to filed requests, but the agency periodically There is no timetable for providing responses to filed requests, but the agency periodically
announces decisions on pending requests through announces decisions on pending requests through Federal Register notices. The “index” on the notices. The “index” on the
USTR Exclusion Portal also indicates the status of each request in the review process: (1) Public USTR Exclusion Portal also indicates the status of each request in the review process: (1) Public
Comment Period; (2) Initial Substantive Review; (3) Administrability Review; (4) Publication in Comment Period; (2) Initial Substantive Review; (3) Administrability Review; (4) Publication in
Progress; (5) Granted; and (6) Denied.Progress; (5) Granted; and (6) Denied.~~196~~197 When the USTR issues an exclusion, it is generally When the USTR issues an exclusion, it is generally
valid for one year after the exclusion notice is published in the valid for one year after the exclusion notice is published in the Federal Register and retroactive to and retroactive to
the imposition of the tariffs (with the starting date varying by applicable list). Exclusions are not the imposition of the tariffs (with the starting date varying by applicable list). Exclusions are not
specific to the requestor, so any party importing a product covered by an exclusion may take specific to the requestor, so any party importing a product covered by an exclusion may take
advantage of the exclusion and request retroactive tariff refunds from U.S. Customs and Border advantage of the exclusion and request retroactive tariff refunds from U.S. Customs and Border
Protection (CBP).Protection (CBP).~~197~~198
Through January 31, 2020, the USTR received a total of 52,746 exclusion requests, pertinent to Through January 31, 2020, the USTR received a total of 52,746 exclusion requests, pertinent to
all four actions all four actions (Figure 9)..~~198~~199 Of these, 6,804 (13%) have been granted and 45,942 (87%) have Of these, 6,804 (13%) have been granted and 45,942 (87%) have
been denied (as of been denied (as of ~~October 25~~December 8, 2020). Specifically, the exclusions are reflected in approximately , 2020). Specifically, the exclusions are reflected in approximately
90 10-digit HTSUS tariff subheadings and 2,120 specially prepared product descriptions—all of 90 10-digit HTSUS tariff subheadings and 2,120 specially prepared product descriptions—all of
which cover 6,804 separate requests. Because most exclusions apply to specific products within a which cover 6,804 separate requests. Because most exclusions apply to specific products within a
relevant subheading, and not to entire subheadings, CRS cannot determine the exact amount of relevant subheading, and not to entire subheadings, CRS cannot determine the exact amount of
trade covered by the exclusions. The USTR has also issued extensions to certain exclusions that trade covered by the exclusions. The USTR has also issued extensions to certain exclusions that
have expired or are set to expire soon. These apply to 42 (of the 89) HTSUS subheadings and 507 have expired or are set to expire soon. These apply to 42 (of the 89) HTSUS subheadings and 507
(of the 2,120) specially prepared product descriptions. (of the 2,120) specially prepared product descriptions.

the Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology the Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology
Transfer, Intellectual Property, and Innovation,” 83Transfer, Intellectual Property, and Innovation,” 83 Federal Register 32181, July 11, 2018. 32181, July 11, 2018.
~~195~~196 Ibid. For more detail on “Made in China 2025,” see CRS In Focus IF10964, Ibid. For more detail on “Made in China 2025,” see CRS In Focus IF10964, “Made in China 2025” Industrial
Policies: Issues for Congress, by Karen M. Sutter. , by Karen M. Sutter.
~~196~~197 Office of the USTR, “USTR Comments Portal: Public Dockets.” Office of the USTR, “USTR Comments Portal: Public Dockets.”
~~197~~198 See, for example, U.S. Customs and Border Protection, “Guidance: Section 301 Product Exclusions from Tranche See, for example, U.S. Customs and Border Protection, “Guidance: Section 301 Product Exclusions from Tranche
4A—$300B Round from China,” CSMS #41955151, March 9, 2020. According to CBP, “[t]o request a refund of 4A—$300B Round from China,” CSMS #41955151, March 9, 2020. According to CBP, “[t]o request a refund of
Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a
Post Summary Correction (PSC) if within the PSC filing timeframe.” Post Summary Correction (PSC) if within the PSC filing timeframe.”
~~198~~199 CRS calculations based on information sourced from the Office of the USTR, “China Section 301—Tariff Actions CRS calculations based on information sourced from the Office of the USTR, “China Section 301—Tariff Actions
and Exclusion Process.” and Exclusion Process.”
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Figure 9. Section 301 Exclusions and Extensions Related to U.S. Imports from China

Source: Congressional Research Service with information from the Office of the USTR. Congressional Research Service with information from the Office of the USTR.
Notes: Figures may not reflect amendments to product specific exclusions and do not include requests Figures may not reflect amendments to product specific exclusions and do not include requests
submitted on or after 03/25/2020 in response to 85submitted on or after 03/25/2020 in response to 85 Federal Register 16987. However, those earlier requests may 16987. However, those earlier requests may
have informed exclusions granted to date and noted here. have informed exclusions granted to date and noted here.
COVID-19 and Medical-Care Products
The USTR announced on March 20, 2020, that even prior to the COVID-19 outbreak, it had been The USTR announced on March 20, 2020, that even prior to the COVID-19 outbreak, it had been
working with the U.S. Department of Health and Human Services (HHS) “to ensure that critical working with the U.S. Department of Health and Human Services (HHS) “to ensure that critical
medicines and other essential medical products were not subject to additional Section 301 medicines and other essential medical products were not subject to additional Section 301
tariffs.”tariffs.”~~199~~200 Consequently, the United States has not imposed tariffs on certain critical medical Consequently, the United States has not imposed tariffs on certain critical medical
products, such as ventilators, oxygen masks, and nebulizers. Moreover, the USTR indicated that, products, such as ventilators, oxygen masks, and nebulizers. Moreover, the USTR indicated that,
in recent months, it had prioritized the review of requests for exclusions on medical care in recent months, it had prioritized the review of requests for exclusions on medical care
products, resulting in exclusions granted on basic medical supplies, including gloves, soaps, products, resulting in exclusions granted on basic medical supplies, including gloves, soaps,
medical-quality facemasks, surgical drapes, and hospital gowns. medical-quality facemasks, surgical drapes, and hospital gowns.
Since March 2020, the USTR has exempted certain medical products from Section 301 tariffs in Since March 2020, the USTR has exempted certain medical products from Section 301 tariffs in
several rounds of exclusions.several rounds of exclusions.~~200~~201 CRS could not determine exactly how many of these products CRS could not determine exactly how many of these products
have been exempted on the basis of COVID-19 concerns, as the USTR does not specify the have been exempted on the basis of COVID-19 concerns, as the USTR does not specify the
rationale for granting exclusions in its announcements. While some products can be easily rationale for granting exclusions in its announcements. While some products can be easily
identified, there are others with known or potential medical uses—or inputs for the manufacture identified, there are others with known or potential medical uses—or inputs for the manufacture
thereof—that have received exclusions but whose ultimate purpose cannot always be ascertained thereof—that have received exclusions but whose ultimate purpose cannot always be ascertained
from HTSUS subheadings or the product descriptions provided (e.g., organic chemicals or from HTSUS subheadings or the product descriptions provided (e.g., organic chemicals or
textiles for the manufacture of pharmaceuticals or PPE). textiles for the manufacture of pharmaceuticals or PPE).
New Exclusion Process?
In March 25, 2020, the USTR published a In March 25, 2020, the USTR published a Federal Register notice seeking comments over a notice seeking comments over a
three-month period to determine if further modifications to the Section 301 tariffs on U.S. imports three-month period to determine if further modifications to the Section 301 tariffs on U.S. imports

~~199~~200 Office of the USTR, “USTR: Response to Coronavirus Crisis,” Press Release, March 20, 2020. Office of the USTR, “USTR: Response to Coronavirus Crisis,” Press Release, March 20, 2020.
~~200~~201 For more detail on all exclusions granted, see Office of the USTR, “China Section 301—Tariff Actions and For more detail on all exclusions granted, see Office of the USTR, “China Section 301—Tariff Actions and
Exclusion Process.” Exclusion Process.”
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from China are necessary to respond to the COVID-19 pandemic in the United States. from China are necessary to respond to the COVID-19 pandemic in the United States.~~201~~202
Specifically, the agency requested comments on whether to remove Section 301 duties on Specifically, the agency requested comments on whether to remove Section 301 duties on
“medical-care products” related to the COVID-19 response.“medical-care products” related to the COVID-19 response.~~202~~203 Comments could be submitted Comments could be submitted
regarding any medical product subject to Section 301 tariffs, whether or not it was subject to a regarding any medical product subject to Section 301 tariffs, whether or not it was subject to a
pending or denied exclusion request. pending or denied exclusion request.
The notice provided no further guidance on the types of products that the USTR considers to be The notice provided no further guidance on the types of products that the USTR considers to be
“medical-care products.” Petitioners were required to “identify [specifically] the particular “medical-care products.” Petitioners were required to “identify [specifically] the particular
product of concern and explain precisely how the product relates to the response to the COVID-product of concern and explain precisely how the product relates to the response to the COVID-
19 outbreak.”19 outbreak.”~~203~~204 For example, comments could “address whether a product is directly used to For example, comments could “address whether a product is directly used to
treat COVID-19 or to limit the outbreak, and/or whether the product is used in the production of treat COVID-19 or to limit the outbreak, and/or whether the product is used in the production of
needed medical-care products.”needed medical-care products.”~~204~~205 In addition, commenters were asked to include, to the extent In addition, commenters were asked to include, to the extent
possible, the 10-digit “subheading of the HTSUS applicable to the product, and the identity of the possible, the 10-digit “subheading of the HTSUS applicable to the product, and the identity of the
particular product in terms of its functionality and physical characteristics (e.g., dimensions, particular product in terms of its functionality and physical characteristics (e.g., dimensions,
material composition, or other characteristics).”material composition, or other characteristics).”~~205~~206
The review of comments runs parallel to, and is not to affect, any ongoing product exclusion The review of comments runs parallel to, and is not to affect, any ongoing product exclusion
requests still under review.requests still under review.~~206~~207 The USTR has not indicated what form the response will take or The USTR has not indicated what form the response will take or
when it will respond to comments—only that it will review them on a rolling basis. These when it will respond to comments—only that it will review them on a rolling basis. These
comments may already be informing product exclusion decisions, or may lead to the comments may already be informing product exclusion decisions, or may lead to the
establishment of a new formal exclusion process, akin to that used for Lists 3 and 4A, but strictly establishment of a new formal exclusion process, akin to that used for Lists 3 and 4A, but strictly
for medical products. In August 2020, some Members introduced a bill to suspend all duties, for medical products. In August 2020, some Members introduced a bill to suspend all duties,
including Section 301 tariffs, on imports of articles needed to combat the COVID-19 including Section 301 tariffs, on imports of articles needed to combat the COVID-19
pandemic.pandemic.~~207~~
~~Court Challenge to Section 301~~
~~On September 10, 2020, importers of vinyl tile—HMTX Industries LLC, Halstead New England~~
~~Corporation, and Metroflor Corporation—filed a complaint at the U.S. Court of International~~
~~Trade (USCIT) challenging both the substantive and procedural processes followed by the USTR~~
~~when instituting Section 301 tariffs under List 3, and subsequently List 4A (~~~~HMTX Industries~~

~~201~~208 Tariff Exclusions and Congressional Action In recent years, some Members have raised the issue with the USTR of establishing or streamlining an exclusion process during hearings and in letters to the USTR. For instance, for the third and largest action (List 3), a bipartisan group of more than 160 Representatives urged the Trump Administration to consider granting exclusions. Subsequently, the joint explanatory 202 The comment period remained opened until June 25, 2020. Office of the USTR, “USTR: Response to Coronavirus The comment period remained opened until June 25, 2020. Office of the USTR, “USTR: Response to Coronavirus
Crisis,” Press Release, March 20, 2020, and “Request for Comments on Additional Modifications to the 301 Action to Crisis,” Press Release, March 20, 2020, and “Request for Comments on Additional Modifications to the 301 Action to
Address COVID-19: ChinaAddress COVID-19: China'’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
Innovation,” 85Innovation,” 85 Federal Register 16987, March 25, 2020. 16987, March 25, 2020.
~~202~~203 Office of the USTR, “FAQs for Request for Comments on Additional Modifications to the 301 Action to Address Office of the USTR, “FAQs for Request for Comments on Additional Modifications to the 301 Action to Address
COVID-19: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and COVID-19: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
Innovation,” June 26, 2020. Innovation,” June 26, 2020.
~~203~~204 Office of the USTR, “Request for Comments on Additional Modifications to the 301 Action to Address COVID-19: Office of the USTR, “Request for Comments on Additional Modifications to the 301 Action to Address COVID-19:
ChinaChina'’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 85s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 85
Federal Register 16987, March 25, 2020. 16987, March 25, 2020.
~~204~~205 Ibid. Ibid.
~~205~~206 Ibid. Ibid.
~~206~~207 Office of the USTR, “FAQs for Request for Comments on Additional Modifications to the 301 Action to Address Office of the USTR, “FAQs for Request for Comments on Additional Modifications to the 301 Action to Address
COVID-19: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and COVID-19: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and
Innovation,” June 26, 2020. Innovation,” June 26, 2020.
~~207~~208 On August 8, 2020, Senators Pat Toomey and Margaret Wood Hassan introduced S. 4497, “Stop PPE Taxes Act of On August 8, 2020, Senators Pat Toomey and Margaret Wood Hassan introduced S. 4497, “Stop PPE Taxes Act of
2020.” The bill would suspend—through December 31, 2022—any duty imposed on specified articles and articles 2020.” The bill would suspend—through December 31, 2022—any duty imposed on specified articles and articles
identified by the U.S. International Trade Commission (USITC) as related to the response to COVID-19, including any identified by the U.S. International Trade Commission (USITC) as related to the response to COVID-19, including any
duty imposed pursuant to (1) Section 301 of the Trade Act of 1974, (2) Section 232 of the Trade Expansion Act of duty imposed pursuant to (1) Section 301 of the Trade Act of 1974, (2) Section 232 of the Trade Expansion Act of
1962, or (3) the International Emergency Economic Powers Act. 1962, or (3) the International Emergency Economic Powers Act.
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statement to the FY2019 appropriations law (P.L. 116-6) directed the USTR to establish a product exclusion process for that third stage of tariffs within 30 days of the law’s enactment. During the first session of the 116th Congress, some Members introduced legislation to limit USTR’s discretion on whether and how to grant or deny exclusion requests. These proposals included the American Business Tariff Relief Act of 2019 (S. 2362) and the Import Tax Relief Act of 2019 (S. 577/H.R. 1452). Court Challenge to Section 301 On September 10, 2020, importers of vinyl tile—HMTX Industries LLC, Halstead New England Corporation, and Metroflor Corporation—filed a complaint at the U.S. Court of International Trade (USCIT) challenging both the substantive and procedural processes followed by the USTR when instituting Section 301 tariffs under List 3, and subsequently List 4A (HMTX Industries LLC et al. v. United States).209~~LLC et al. v. United States).208~~ The complaint alleges that USTR’s imposition of these tariffs The complaint alleges that USTR’s imposition of these tariffs
violated the Trade Act of 1974 because: (1) the action was taken more than a year after USTR violated the Trade Act of 1974 because: (1) the action was taken more than a year after USTR
initiated the underlying Section 301 investigation; (2) the rationale and justification to take the initiated the underlying Section 301 investigation; (2) the rationale and justification to take the
action were unrelated to the acts, policies, or practices that USTR investigated pursuant to the action were unrelated to the acts, policies, or practices that USTR investigated pursuant to the
underlying Section 301 investigation; and (3) the statute does not authorize the USTR “to underlying Section 301 investigation; and (3) the statute does not authorize the USTR “to
increase tariff actions that are no longer ‘appropriate,’ but rather only to delay, taper, or terminate increase tariff actions that are no longer ‘appropriate,’ but rather only to delay, taper, or terminate
such actions.”such actions.”~~209~~210
In addition, the plaintiffs allege that the manner in which in the tariff action was implemented In addition, the plaintiffs allege that the manner in which in the tariff action was implemented
violated the Administrative Procedure violated the Administrative Procedure ~~Act210~~Act211 because the USTR: (1) exceeded its authority under because the USTR: (1) exceeded its authority under
the 1974 Act; (2) did not “offer any evidence for any asserted ‘increased burden’ from China’s the 1974 Act; (2) did not “offer any evidence for any asserted ‘increased burden’ from China’s
intellectual property policies and practices that were the subject of USTR’s Section 301 intellectual property policies and practices that were the subject of USTR’s Section 301
investigation,” and (3) “did not provide a sufficient opportunity for comment, failed to investigation,” and (3) “did not provide a sufficient opportunity for comment, failed to
meaningfully consider relevant factors when making their decisions, and failed to adequately meaningfully consider relevant factors when making their decisions, and failed to adequately
explain their rationale.”explain their rationale.”~~211~~212 As of September 20, 2020, more than 3,000 companies had joined As of September 20, 2020, more than 3,000 companies had joined
HMTX Industries LLC et al. in filing lawsuits at the USCIT against the Trump Administration’s HMTX Industries LLC et al. in filing lawsuits at the USCIT against the Trump Administration’s
use of Section 301 tariffs.use of Section 301 tariffs.~~212~~213
Role of Congress
Congress exerts oversight by reviewing, monitoring, and supervising USTR’s activities, exercise Congress exerts oversight by reviewing, monitoring, and supervising USTR’s activities, exercise
of authorities, and implementation of actions taken under Title III of the Trade Act of 1974. In of authorities, and implementation of actions taken under Title III of the Trade Act of 1974. In
addition, the USTR is required to report to Congress regularly on a number of matters. These addition, the USTR is required to report to Congress regularly on a number of matters. These
includeinclude:
Update on Section 301 Investigations. The USTR is required to submit, on a biannual basis, a
~~report to the House of Representatives and Senate describing petitions filed or investigations~~
~~initiated under Section 301, the determinations made, and actions taken. The report must also~~
~~provide updates on the development and status of ongoing investigations and on the~~
~~implementation of agreements entered into as part of past investigations.213~~
Modification or Termination of Section 301 Investigations. The USTR may modify or
~~terminate any Section 301 action, subject to the specific direction, if any, of the President and~~
~~criteria set forth in legislation.214 The USTR is required to publish notice of the modification or~~

~~208~~ 209 U.S. Court of International Trade, HMTX Industries LLC, Halstead New England Corporation, and Metroflor U.S. Court of International Trade, HMTX Industries LLC, Halstead New England Corporation, and Metroflor
Corporation vs. United States of America; Office of the United States Trade Representative; Robert E. Lighthizer, U.S. Corporation vs. United States of America; Office of the United States Trade Representative; Robert E. Lighthizer, U.S.
Trade Representative; U.S. Customs & Border Protection; Mark A. Morgan, U.S. Customs & Border Protection Acting Trade Representative; U.S. Customs & Border Protection; Mark A. Morgan, U.S. Customs & Border Protection Acting
Commissioner, Court No. 20-00177, September 10, 2020. For more detail, see CRS Legal Sidebar LSB10553, Commissioner, Court No. 20-00177, September 10, 2020. For more detail, see CRS Legal Sidebar LSB10553, Section
301 Tariffs on Goods from China: International and Domestic Legal Challenges, by Nina M. Hart and Brandon J. , by Nina M. Hart and Brandon J.
Murrill. Murrill.
~~209~~210 Ibid. Ibid.
~~210~~211 5 U.S.C. Chapter 5: Administrative Procedure. 5 U.S.C. Chapter 5: Administrative Procedure.
~~211~~212 Ibid. Ibid.
~~212~~213 John Brew, “HTMX et al. v. United States – An (ongoing?) Opportunity for Importers to Recover Section 301 John Brew, “HTMX et al. v. United States – An (ongoing?) Opportunity for Importers to Recover Section 301
Tariffs Paid on Section 301 List 3 (and List 4a) Products,” LexBlog, September 23, 2020. Tariffs Paid on Section 301 List 3 (and List 4a) Products,” LexBlog, September 23, 2020.
~~213 19 U.S.C. § 2419(3).~~
~~214 Specifically, 19 U.S.C. § 2417(a)(1).~~
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Update on Section 301 Investigations. The USTR is required to submit, on a biannual basis, a report to the House of Representatives and Senate describing petitions filed or investigations initiated under Section 301, the determinations made, and actions taken. The report must also provide updates on the development and status of ongoing investigations and on the implementation of agreements entered into as part of past investigations.214 Modification or Termination of Section 301 Investigations. The USTR may modify or terminate any Section 301 action, subject to the specific direction, if any, of the President and criteria set forth in legislation.215 The USTR is required to publish notice of the modification or termination in the termination in the Federal Register and submit a written report to Congress on the reasons for and submit a written report to Congress on the reasons for
doing so.doing so.~~215~~216
Delaying Request for Consultation with Foreign Governments. During a Section 301 During a Section 301
investigation, the USTR may, after consulting with the petitioner (if any), delay for up to 90 days investigation, the USTR may, after consulting with the petitioner (if any), delay for up to 90 days
any request for consultations with the foreign government concerned for the purpose of verifying any request for consultations with the foreign government concerned for the purpose of verifying
or improving the petition to ensure an adequate basis for consultation. If consultations are or improving the petition to ensure an adequate basis for consultation. If consultations are
delayed, the USTR is required to publish notice of the delay in the delayed, the USTR is required to publish notice of the delay in the Federal Register and report to and report to
Congress on the reasons for delaying consultations in its semiannual report to the House of Congress on the reasons for delaying consultations in its semiannual report to the House of
Representatives and the Senate.Representatives and the Senate.~~216~~217
Notice of Inability to Resolve Issues through Formal Dispute Settlement. In Section 301 cases In Section 301 cases
involving a trade agreement, if a dispute is not resolved before the close of the minimum dispute involving a trade agreement, if a dispute is not resolved before the close of the minimum dispute
settlement period provided for in the agreement, the USTR is required to submit a report to settlement period provided for in the agreement, the USTR is required to submit a report to
Congress, within 15 days after the close of such period, setting forth the reasons why the dispute Congress, within 15 days after the close of such period, setting forth the reasons why the dispute
was not resolved, the status of the case, and the prospects for resolution.was not resolved, the status of the case, and the prospects for resolution.~~217~~218
Export Targeting Assessment.~~218~~219 If the USTR makes an affirmative determination in a Section If the USTR makes an affirmative determination in a Section
301 investigation involving export targeting by a foreign country and determines to take no 301 investigation involving export targeting by a foreign country and determines to take no
action, the USTR shall establish an advisory panel to recommend measures that will promote the action, the USTR shall establish an advisory panel to recommend measures that will promote the
competitiveness of the domestic industry affected by the export targeting. By no later than six competitiveness of the domestic industry affected by the export targeting. By no later than six
months after it is established, the advisory panel shall submit to the USTR and to Congress a months after it is established, the advisory panel shall submit to the USTR and to Congress a
report on measures that it recommends be taken by the United States to promote the report on measures that it recommends be taken by the United States to promote the
competitiveness of the affected industry.competitiveness of the affected industry.~~219~~220
Based on the recommendations of the report, and subject to the specific direction, if any, of the Based on the recommendations of the report, and subject to the specific direction, if any, of the
President, the USTR may take any administrative actions authorized under any other provision of President, the USTR may take any administrative actions authorized under any other provision of
law, and, if necessary, propose legislation to implement any other actions, that would restore or law, and, if necessary, propose legislation to implement any other actions, that would restore or
improve the industry’s international competitiveness. By no later than 30 days after the improve the industry’s international competitiveness. By no later than 30 days after the
~~submission of the panel report, the USTR is to submit a report to the Congress on actions taken~~
~~and proposals made.220~~
~~Trade Enforcement Priorities under Section 310~~
~~ The USTR is required to consult, by no later than May 31 of each calendar year, with the~~
~~Senate Committee on Finance and the House Committee on Ways and Means on acts,~~
~~policies, or practices of foreign governments that raise concerns with respect to~~
~~obligations under the WTO Agreements or any other U.S. trade agreement, or that~~
~~otherwise create or maintain barriers to U.S. goods, services, or investment.221~~
~~ The USTR is required to report, by no later than July 31 of each calendar year, to the~~
~~Senate Committee on Finance and the House Committee on Ways and Means on acts,~~

~~215 19 U.S.C. § 2417(b).~~
~~216~~ 214 19 U.S.C. § 2419(3). 215 Specifically, 19 U.S.C. § 2417(a)(1). 216 19 U.S.C. § 2417(b). 217 19 U.S.C. § 2413(b)(2)(B), as required under 19 U.S.C. § 2419(a)(3). 19 U.S.C. § 2413(b)(2)(B), as required under 19 U.S.C. § 2419(a)(3).
~~217~~218 19 U.S.C. § 2414(a)(4). 19 U.S.C. § 2414(a)(4).
~~218~~219 The term “export targeting” refers to any foreign government plan or scheme consisting of a combination of The term “export targeting” refers to any foreign government plan or scheme consisting of a combination of
coordinated actions (whether carried out severally or jointly) that are bestowed on a specific enterprise, industry, or coordinated actions (whether carried out severally or jointly) that are bestowed on a specific enterprise, industry, or
group thereof, the effect of which is to assist the enterprise, industry, or group to become more competitive in the group thereof, the effect of which is to assist the enterprise, industry, or group to become more competitive in the
export of a class or kind of merchandise (19 U.S.C. § 2411(d)(3)(E)). export of a class or kind of merchandise (19 U.S.C. § 2411(d)(3)(E)).
~~219~~220 19 U.S.C. § 2415(b)(2)(B). Congressional Research Service 47 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use submission of the panel report, the USTR is to submit a report to Congress on actions taken and proposals made.221 Trade Enforcement Priorities under Section 310  The USTR is required to consult, by no later than May 31 of each calendar year, with the Senate Committee on Finance and the House Committee on Ways and Means on acts, policies, or practices of foreign governments that raise concerns with respect to obligations under the WTO Agreements or any other U.S. trade agreement, or that otherwise create or maintain barriers to U.S. goods, services, or investment.222  The USTR is required to report, by no later than July 31 of each calendar year, to the Senate Committee on Finance and the House Committee on Ways and Means on acts, ~~19 U.S.C. § 2415(b)(2)(B).~~
~~220 19 U.S.C. § 2415(b)(1)(C).~~
~~221 19 U.S.C. § 2420(a)(1).~~
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policies, or practices of foreign governments identified as trade enforcement priorities policies, or practices of foreign governments identified as trade enforcement priorities
(based on consultations and criteria set forth in statute).(based on consultations and criteria set forth in statute).~~222~~ 223 When reporting to the When reporting to the
~~Committees~~committees, the USTR is also required to include, as relevant, a description of actions , the USTR is also required to include, as relevant, a description of actions
taken to address trade enforcement priorities identified in preceding calendar years.taken to address trade enforcement priorities identified in preceding calendar years.~~223~~224
 The USTR is required to consult, at the same time as the reporting  The USTR is required to consult, at the same time as the reporting ~~above224~~above225 and ~~and~~ no later no later
than January 31 of each calendar year, with the Senate Committee on Finance and the than January 31 of each calendar year, with the Senate Committee on Finance and the
House Committee on Ways and Means on acts, policies, or practices of foreign House Committee on Ways and Means on acts, policies, or practices of foreign
governments of concern with respect to obligations under the WTO Agreements or any governments of concern with respect to obligations under the WTO Agreements or any
other U.S. trade agreement, or that otherwise create or maintain trade barriers to U.S. other U.S. trade agreement, or that otherwise create or maintain trade barriers to U.S.
goods, services, or investment.goods, services, or investment.~~225~~226 In consultations, the USTR is required to address (1) In consultations, the USTR is required to address (1)
those acts, policies, and practices that the agency is actively investigating,those acts, policies, and practices that the agency is actively investigating,~~226~~227 (2) all (2) all
ongoing enforcement actions taken by or against the United States,ongoing enforcement actions taken by or against the United States,~~227~~228 and (3) the and (3) the
availability of resources and constraints on monitoring and enforcement activities.availability of resources and constraints on monitoring and enforcement activities.~~228~~229
 The USTR is required to notify and consult with the Senate Committee on  The USTR is required to notify and consult with the Senate Committee on Finance and Finance and
the House Committee on Ways and Means in advance of the initiation of any formal trade the House Committee on Ways and Means in advance of the initiation of any formal trade
dispute by or against the United States taken in regard to an obligation under the WTO dispute by or against the United States taken in regard to an obligation under the WTO
Agreements or any other U.S. trade agreement.Agreements or any other U.S. trade agreement.~~229~~230 The USTR is also required to notify The USTR is also required to notify
and consult with the and consult with the ~~Committees~~committees in advance of the announced or anticipated circulation in advance of the announced or anticipated circulation
~~of any report~~ of any report 221 19 U.S.C. § 2415(b)(1)(C). 222 19 U.S.C. § 2420(a)(1). 223 19 U.S.C. § 2420(a)(3)(A). Specifically, based on consultations under 19 U.S.C. § 2420(a)(1) and criteria set forth in 19 U.S.C. § 2420(a)(2). 224 19 U.S.C. § 2420(a)(3)(B). 225 Specifically, under 19 U.S.C. § 2420(a)(3). 226 19 U.S.C. § 2420(b)(1). 227 19 U.S.C. § 2420(b)(3). 228 19 U.S.C. § 2420(b)(4). 229 19 U.S.C. § 2420(b)(5). 230 19 U.S.C. § 2420(d)(1). Congressional Research Service 48 link to page 22 link to page 22 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use of a WTO dispute settlement panel or the Appellate Body or of a dispute of a WTO dispute settlement panel or the Appellate Body or of a dispute
settlement panel under any other U.S. trade agreement.settlement panel under any other U.S. trade agreement.~~230~~231
Priority Foreign Countries. The USTR is not required to initiate a Section 301 investigation The USTR is not required to initiate a Section 301 investigation
with respect to any act, policy, or practice of a “Priority Foreign Country” if doing so would be with respect to any act, policy, or practice of a “Priority Foreign Country” if doing so would be
detrimental to U.S. economic interests.detrimental to U.S. economic interests.~~231~~232 (For more detail, see (For more detail, see “Intellectual Property
Enforcement and Section 301.”) If the agency makes such a determination, then the USTR is If the agency makes such a determination, then the USTR is
required to submit to Congress a written report setting forth the reasons for the determination and required to submit to Congress a written report setting forth the reasons for the determination and
the U.S. economic interests that would be adversely affected by the investigation.the U.S. economic interests that would be adversely affected by the investigation.~~232~~233
Outlook and Issues for Congress
Congress plays a major role in shaping U.S. trade policy through its legislative and oversight Congress plays a major role in shaping U.S. trade policy through its legislative and oversight
authority. Article I, Section 8 of the U.S. Constitution grants Congress the power to “regulate authority. Article I, Section 8 of the U.S. Constitution grants Congress the power to “regulate
Commerce with foreign Nations” and to “lay and collect Taxes, Duties, Imposts and Excises.” Commerce with foreign Nations” and to “lay and collect Taxes, Duties, Imposts and Excises.”
Congress exercises this authority in numerous ways, including the enactment of laws authorizing Congress exercises this authority in numerous ways, including the enactment of laws authorizing
trade programs and measures to address unfair and other trade practices. Congress also conducts trade programs and measures to address unfair and other trade practices. Congress also conducts
oversight of trade policies, programs, and agreements. These include such areas as U.S. trade oversight of trade policies, programs, and agreements. These include such areas as U.S. trade

~~222 19 U.S.C. § 2420(a)(3)(A). Specifically, based on consultations under 19 U.S.C. § 2420(a)(1) and criteria set forth in~~
~~19 U.S.C. § 2420(a)(2).~~
~~223 19 U.S.C. § 2420(a)(3)(B).~~
~~224 Specifically, under 19 U.S.C. § 2420(a)(3).~~
~~225 19 U.S.C. § 2420(b)(1).~~
~~226 19 U.S.C. § 2420(b)(3).~~
~~227 19 U.S.C § 2420(b)(4).~~
~~228 19 U.S.C. § 2420(b)(5).~~
~~229 19 U.S.C. § 2420(d)(1).~~
~~230 19 U.S.C. § 2420(d)(2).~~
~~231 Specifically, a foreign country identified under 19 U.S.C. § 2242(a)(2).~~
~~232 19 U.S.C. § 2412(b)(2)(C).~~
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agreement negotiations, tariffs and nontariff barriers, trade remedy laws, import and export agreement negotiations, tariffs and nontariff barriers, trade remedy laws, import and export
policies, economic sanctions, and the trade policy functions of the federal government. In many policies, economic sanctions, and the trade policy functions of the federal government. In many
of these areas, particularly in the negotiation of trade agreements and U.S. efforts to eliminate of these areas, particularly in the negotiation of trade agreements and U.S. efforts to eliminate
unfair foreign trade barriers against U.S. exports and investment abroad, Congress has delegated unfair foreign trade barriers against U.S. exports and investment abroad, Congress has delegated
certain authorities to the President. Section 301 is one of these congressionally delegated trade certain authorities to the President. Section 301 is one of these congressionally delegated trade
authorities. authorities.
Since the establishment of the WTO, the United States has generally pursued bilateral and Since the establishment of the WTO, the United States has generally pursued bilateral and
multilateral negotiations with many of its trading partners to resolve disagreements or diffuse multilateral negotiations with many of its trading partners to resolve disagreements or diffuse
tensions over discrete issues and achieve expanded market access for U.S. firms. The United tensions over discrete issues and achieve expanded market access for U.S. firms. The United
States has also resorted to the multilateral forum provided by the WTO to settle trade disputes, States has also resorted to the multilateral forum provided by the WTO to settle trade disputes,
and it has used Section 301 authorities primarily to build cases and pursue dispute settlement and it has used Section 301 authorities primarily to build cases and pursue dispute settlement
there. The Trump Administration has been more willing to act unilaterally, and its use of there. The Trump Administration has been more willing to act unilaterally, and its use of
delegated authorities to impose Section 301 tariffs as punitive measures has been the subject of delegated authorities to impose Section 301 tariffs as punitive measures has been the subject of
congressional and broader international debate. While some Members of Congress have congressional and broader international debate. While some Members of Congress have
applauded the Section 301 actions by the Trump Administration or called for more active use of applauded the Section 301 actions by the Trump Administration or called for more active use of
trade authorities, others have decried unilateral trade sanctions under Section 301 as an trade authorities, others have decried unilateral trade sanctions under Section 301 as an
undesirable shift in U.S. trade policy that could undermine the multilateral trading system.undesirable shift in U.S. trade policy that could undermine the multilateral trading system.~~233~~
234 Whether a more unilateral approach to trade disputes will become a prominent feature of U.S. Whether a more unilateral approach to trade disputes will become a prominent feature of U.S.
trade negotiations remains to be seen. trade negotiations remains to be seen.
Current Debate over the Use of Section 301
In light of the Trump Administration’s more active use of trade authorities, many Members of In light of the Trump Administration’s more active use of trade authorities, many Members of
Congress, U.S. businesses, interest groups, and trade partners have raised questions about the Congress, U.S. businesses, interest groups, and trade partners have raised questions about the
~~economic and broader policy implications of imposing unilateral trade restrictions under Section~~
~~301.234 The Trump Administration and some U.S. stakeholders, including some domestic~~
~~producers, argue that Section 301 tariffs and other import restrictions are necessary to level the~~
~~playing field for U.S. firms and workers.235 In their view, Section 301 tariffs are meant, in part, to~~
~~obtain the elimination of foreign protectionist policies and practices that impair the~~
~~competitiveness of U.S. exporters and investors abroad.236 The Administration and some~~
~~Members also contend that while past trade negotiations and agreements have lowered or~~
~~eliminated U.S. trade restrictions, they have failed to enhance reciprocal market access for U.S.~~
~~firms and workers.237 Section 301 tariffs can potentially incentivize U.S. trading partners to enter~~

~~233 See, for example, Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,”~~
Politico, January 23, 2019, and Clark Packard and Philip Wallach, “Restraining the President: Congress and Trade
~~Policy,” R Street Policy Study No. 158, November 2018.~~
~~234 See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage~~
~~Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying~~
~~Spree Unlikely to Cover Trade War’s Costs,” Bloomberg, December 18, 2019; and Mary Amiti, Sang Hoon Kong, and~~
~~David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve~~
~~Bank of New York, May 28, 2020.~~
~~235 See, for example, Office of the USTR,~~ ~~Findings of the Investigation into China’s Acts, Policies, and Practices~~
~~Related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974~~,
~~March 22, 2018.~~
~~236 See, for example, Office of the USTR, “Statement by U.S. Trade Representative Robert Lighthizer on Section 301~~
~~Action,” Press Release, July 10, 2018.~~
~~237 See, for example, Office of the USTR,~~ ~~2019 Trade Policy Agenda and 2018Annual Report of the President of the~~
~~United States on the Trade Agreements Program, March 2019.~~
~~Congressional Research Service~~
49

~~Section 301 of the Trade Act of 1974: Origin, Evolution, and Use~~

231 19 U.S.C. § 2420(d)(2). 232 Specifically, a foreign country identified under 19 U.S.C. § 2242(a)(2). 233 19 U.S.C. § 2412(b)(2)(C). 234 See, for example, Adam Behsudi, “Duffy Finds 18 Co-sponsors for Bill to Increase Trump’s Tariff Powers,” Politico, January 23, 2019, and Clark Packard and Philip Wallach, “Restraining the President: Congress and Trade Policy,” R Street Policy Study No. 158, November 2018. Congressional Research Service 49 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use economic and broader policy implications of imposing unilateral trade restrictions under Section 301.235 The Trump Administration and some U.S. stakeholders, including some domestic producers, argue that Section 301 tariffs and other import restrictions are necessary to level the playing field for U.S. firms and workers.236 In their view, Section 301 tariffs are meant, in part, to obtain the elimination of foreign protectionist policies and practices that impair the competitiveness of U.S. exporters and investors abroad.237 The Administration and some Members also contend that while past trade negotiations and agreements have lowered or eliminated U.S. trade restrictions, they have failed to enhance reciprocal market access for U.S. firms and workers.238 Section 301 tariffs can potentially incentivize U.S. trading partners to enter into negotiations to achieve broader trade barrier reductions and develop new trade rules on issues into negotiations to achieve broader trade barrier reductions and develop new trade rules on issues
not adequately covered by existing WTO agreements. not adequately covered by existing WTO agreements.
Some analysts and trading partners, on the other hand, are concerned that Section 301 tariffs—or Some analysts and trading partners, on the other hand, are concerned that Section 301 tariffs—or
threat thereof—threaten the U.S. and global economies and the rules-based multilateral trading threat thereof—threaten the U.S. and global economies and the rules-based multilateral trading
system that the United States helped to establish following World War II.system that the United States helped to establish following World War II.~~238~~239 They emphasize that They emphasize that
the economic repercussions of U.S. actions are felt not only by U.S. consumers and producers the economic repercussions of U.S. actions are felt not only by U.S. consumers and producers
who rely on imports subject to Section 301 tariffs, but also by U.S. exporters targeted for who rely on imports subject to Section 301 tariffs, but also by U.S. exporters targeted for
retaliation.retaliation.~~239~~240 Some companies also report that the uncertainty resulting from the unpredictable Some companies also report that the uncertainty resulting from the unpredictable
nature of the U.S. and retaliatory actions has made long-term planning difficult.nature of the U.S. and retaliatory actions has made long-term planning difficult.~~240~~241 This may be This may be
affecting U.S. and global economic activity, and it could result in disrupted global supply chains affecting U.S. and global economic activity, and it could result in disrupted global supply chains
(as firms find ways to avoid tariffs), job losses, deferred investments, lost profits, and lost export (as firms find ways to avoid tariffs), job losses, deferred investments, lost profits, and lost export
markets. markets.
In addition, some Members and U.S. trading partners contend that the Trump Administration’s In addition, some Members and U.S. trading partners contend that the Trump Administration’s
Section 301 tariffs undermine—and potentially violate—WTO rules and could lead to a tit-for-tat Section 301 tariffs undermine—and potentially violate—WTO rules and could lead to a tit-for-tat
escalation of trade-restrictive measures around the world.escalation of trade-restrictive measures around the world.~~241~~242 They see the imposition of U.S. trade 235 See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying Spree Unlikely to Cover Trade War’s Costs,” Bloomberg, December 18, 2019; and Mary Amiti, Sang Hoon Kong, and David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve Bank of New York, May 28, 2020. 236 See, for example, Office of the USTR, Findings of the Investigation into China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974, March 22, 2018. 237 See, for example, Office of the USTR, “Statement by U.S. Trade Representative Robert Lighthizer on Section 301 Action,” Press Release, July 10, 2018. 238 See, for example, Office of the USTR, 2019 Trade Policy Agenda and 2018 Annual Report of the President of the United States on the Trade Agreements Program, March 2019. 239 ~~They see the imposition of U.S. trade~~
~~restrictions as an undesirable shift in U.S. trade policy, and they argue that the United States~~
~~should make use of WTO dispute settlement procedures to address U.S. trade concerns rather~~
~~than resorting to unilateral action. In contrast, the Trump Administration has argued that Section~~
~~301 tariffs are justified as a response to violations of existing commitments under the WTO by~~
~~other trading partners, particularly China.242 In response to the President’s actions, China and~~
~~some U.S.-based importers have challenged Section 301 tariffs in international and domestic legal~~
~~fora, and the outcome of these cases could have implications for the United States and the future~~
~~of the multilateral trading system.243~~

~~238~~ See, for example, “EU Backs China’s WTO Challenge of U.S. Section 301 Tariffs,” See, for example, “EU Backs China’s WTO Challenge of U.S. Section 301 Tariffs,” Inside U.S. Trade, September , September
27, 2020, Vol. 37, No. 38; and Colin Patch, “A Unilateral President vs. A Multilateral Trade Organization: Ethical 27, 2020, Vol. 37, No. 38; and Colin Patch, “A Unilateral President vs. A Multilateral Trade Organization: Ethical
Implications In The Ongoing Trade War,” Implications In The Ongoing Trade War,” The Georgetown Journal of Legal Ethics, 2019, Vol. 32, pp. 883-902. , 2019, Vol. 32, pp. 883-902.
~~239~~240 See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage See, for example, Mark Zandi, Jesse Rogers, and Maria Cosma, “Trade War Chicken: The Tariffs and the Damage
Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying Done,” Analysis, Moody’s Analytics, September 2019; Shawn Donnan and Reade Pickert, “Trump’s China Buying
Spree Unlikely to Cover Trade War’s Costs,” Spree Unlikely to Cover Trade War’s Costs,” Bloomberg, December 18, 2019; and Mary Amiti, Sang Hoon Kong, and , December 18, 2019; and Mary Amiti, Sang Hoon Kong, and
David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve David E. Weinstein, “The Investment Cost of the U.S.-China Trade War,” Liberty Street Economics, Federal Reserve
Bank of New York, May 28, 2020. Bank of New York, May 28, 2020.
~~240~~241 For a discussion on the effects of uncertainty, see, for example, Eddy Bekkers and Sofia Schroeter, “An Economic For a discussion on the effects of uncertainty, see, for example, Eddy Bekkers and Sofia Schroeter, “An Economic
Analysis of the US-China Trade Conflict,” Analysis of the US-China Trade Conflict,” Staff Working Paper ERSD-2020-04, World Trade Organization, Economic , World Trade Organization, Economic
Research and Statistics Division, March 19, 2020; and Aaron Flaaen and Justin Pierce, “Disentangling the Effects of Research and Statistics Division, March 19, 2020; and Aaron Flaaen and Justin Pierce, “Disentangling the Effects of
the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector,” the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector,” Finance and Economics Discussion Series
2019-086, Board of Governors of the Federal Reserve System, December 23, 2019. , Board of Governors of the Federal Reserve System, December 23, 2019.
~~241~~242 See, for example, World Bank, See, for example, World Bank, Global Economic Prospects: The Turning of the Tide?, June 2018; Wang Yong, , June 2018; Wang Yong,
~~“The U.S. and China: Domestic Adjustment and Trade Relations Crisis,” AmCham Shanghai, January 23, 2019; “EU~~
~~Backs China’s WTO Challenge of U.S. Section 301 Tariffs,” Inside U.S. Trade, September 27, 2020, Vol. 37, No. 38;~~
~~and Colin Patch, “A Unilateral President vs. A Multilateral Trade Organization: Ethical Implications In The Ongoing~~
~~Trade War,” The Georgetown Journal of Legal Ethics, 2019, Vol. 32, pp. 883-902.~~
~~242 See, for example, Office of the USTR,~~ ~~2019 Trade Policy Agenda and 2018Annual Report of the President of the~~
~~United States on the Trade Agreements Program, March 2019, and “Statement by U.S. Trade Representative Robert~~
~~Lighthizer on Section 301 Action,” Press Release, July 10, 2018.~~
~~243 Since April 2018, China has filed three WTO cases challenging~~ Congressional Research Service 50 link to page 70 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use restrictions as an undesirable shift in U.S. trade policy, and they argue that the United States should make use of WTO dispute settlement procedures to address U.S. trade concerns rather than resorting to unilateral action. In contrast, the Trump Administration has argued that Section Section 301 tariffs are justified as a response to violations of existing commitments under the WTO by other trading partners, particularly China.243 In response to the President’s actions, China and some U.S.-based importers have challenged Section 301 tariffs in international and domestic legal fora, and the outcome of these cases could have implications for the United States and the future of the multilateral trading system.244 ~~301 tariffs. The WTO cases are: (1)~~
~~“DS543: United States—Tariff Measures on Certain Goods from China” (April 4, 2018), (2) “DS565: United States—~~
~~Tariff Measures on Certain Goods from China II” (August 23, 2018), and (3) “DS587: United States—Tariff Measures~~
~~on Certain Goods from China III” (September 2, 2019). For more detail on the complaint filed at the U.S. Court of~~
~~International Trade (USCIT), see HMTX Industries LLC et al. v. United States.~~
~~Congressional Research Service~~
50

~~link to page 69~~ ~~Section 301 of the Trade Act of 1974: Origin, Evolution, and Use~~

Potential Options and Questions for Congress
The use of Section 301 authorities to impose trade restrictions on U.S. imports does not require The use of Section 301 authorities to impose trade restrictions on U.S. imports does not require
formal approval by Congress or an affirmative finding by an independent agency such as the U.S. formal approval by Congress or an affirmative finding by an independent agency such as the U.S.
International Trade Commission. As a result, the President has broad discretion in determining International Trade Commission. As a result, the President has broad discretion in determining
when and how to act. Should Congress disapprove the President’s exercise of authorities and when and how to act. Should Congress disapprove the President’s exercise of authorities and
implementation of actions taken under Title III of the Trade Act of 1974, Members’ current implementation of actions taken under Title III of the Trade Act of 1974, Members’ current
recourse is largely limited to passing new legislation or using informal tools to pressure the recourse is largely limited to passing new legislation or using informal tools to pressure the
Administration to change course. Some Members and observers have suggested that Congress Administration to change course. Some Members and observers have suggested that Congress
should require additional steps in the Section 301 process in order to promote transparency, should require additional steps in the Section 301 process in order to promote transparency,
consistency, and proper application of authorities and to ensure that the President and the USTR consistency, and proper application of authorities and to ensure that the President and the USTR
carry out Section 301 objectives as prescribed by Congress. carry out Section 301 objectives as prescribed by Congress.
In the 116th Congress, debate over congressional and executive powers to regulate tariffs has In the 116th Congress, debate over congressional and executive powers to regulate tariffs has
generated multiple proposals to revise the President’s trade authorities to take action under generated multiple proposals to revise the President’s trade authorities to take action under
Section 301, along with other reformSection 301, along with other reforms (Table B-1). The majority of these proposals would expand . The majority of these proposals would expand
the role of Congress in determining whether or not to impose tariffs, for example, by requiring the role of Congress in determining whether or not to impose tariffs, for example, by requiring
congressional approval before certain presidential trade actions can go into effect.congressional approval before certain presidential trade actions can go into effect. Two bills Two bills
introduced during the 116th Congress would grant the President additional authorities to increase introduced during the 116th Congress would grant the President additional authorities to increase
tariff rates.tariff rates.~~244~~245
As debates continue, Congress may consider the following: As debates continue, Congress may consider the following:
 Has the use of Section 301 in recent years been in line with congressional intent  Has the use of Section 301 in recent years been in line with congressional intent
in crafting the delegated authorities to the President? in crafting the delegated authorities to the President?
 What is the impact of taking unilateral actions to impose tariffs under Section  What is the impact of taking unilateral actions to impose tariffs under Section
301—and of retaliatory tariffs by trading partners—on U.S. consumers and 301—and of retaliatory tariffs by trading partners—on U.S. consumers and
different sectors of the U.S. economy? different sectors of the U.S. economy?
“The U.S. and China: Domestic Adjustment and Trade Relations Crisis,” AmCham Shanghai, January 23, 2019; “EU Backs China’s WTO Challenge of U.S. Section 301 Tariffs,” Inside U.S. Trade, September 27, 2020, Vol. 37, No. 38; and Colin Patch, “A Unilateral President vs. A Multilateral Trade Organization: Ethical Implications In The Ongoing Trade War,” The Georgetown Journal of Legal Ethics, 2019, Vol. 32, pp. 883-902. 243 See, for example, Office of the USTR, 2019 Trade Policy Agenda and 2018Annual Report of the President of the United States on the Trade Agreements Program, March 2019, and “Statement by U.S. Trade Representative Robert Lighthizer on Section 301 Action,” Press Release, July 10, 2018. 244 Since April 2018, China has filed three WTO cases challenging Section 301 tariffs. The WTO cases are: (1) “DS543: United States—Tariff Measures on Certain Goods from China” (April 4, 2018), (2) “DS565: United States—Tariff Measures on Certain Goods from China II” (August 23, 2018), and (3) “DS587: United States—Tariff Measures on Certain Goods from China III” (September 2, 2019). For more detail on the complaint filed at the U.S. Court of International Trade (USCIT), see HMTX Industries LLC et al. v. United States. 245 H.R. 764, “United States Reciprocal Trade Act,” 116th Congress, January 24, 2019. See also, S. 2409, “United States Reciprocal Trade Act, 116th Congress, July 31, 2019. Congressional Research Service 51 Section 301 of the Trade Act of 1974: Origin, Evolution, and Use  Should Congress consider establishing a formal product exclusion process or set  Should Congress consider establishing a formal product exclusion process or set
specific guidelines for when and how to grant exclusions to trade restrictions specific guidelines for when and how to grant exclusions to trade restrictions
imposed under Section 301? imposed under Section 301?
 Does the current use of Section 301 set a precedent for other countries to bypass  Does the current use of Section 301 set a precedent for other countries to bypass
WTO dispute settlement and act unilaterally? Do these actions undermine the WTO dispute settlement and act unilaterally? Do these actions undermine the
credibility and effectiveness of the multilateral trading system? credibility and effectiveness of the multilateral trading system?
 Should Congress consider amending current delegated authorities under Section  Should Congress consider amending current delegated authorities under Section
301 by clarifying provisions or clearly specifying requirements for carrying out 301 by clarifying provisions or clearly specifying requirements for carrying out
Section 301 investigations? Section 301 investigations?
 Should Congress consider adding provisions that grant the President additional  Should Congress consider adding provisions that grant the President additional
authorities to address new trade issues and barriers that may not be fully covered authorities to address new trade issues and barriers that may not be fully covered
by WTO rules and disciplines (e.g., digital trade,by WTO rules and disciplines (e.g., digital trade, state-owned enterprises, state-owned enterprises,
environment, and corruption)? environment, and corruption)?

~~244 H.R. 764, “United States Reciprocal Trade Act,” 116th Congress, January 24, 2019. See also, S. 2409, “United~~
~~States Reciprocal Trade Act, 116th Congress, July 31, 2019.~~
~~Congressional Research Service~~
51 Congressional Research Service 52

Appendix A. Section 301 Investigations
Table A-1. Section 301 Investigations Since the Establishment of the WTO: 1995-Present
Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes

96
1995 1995
Colombia Colombia
Exportation of Exportation of
Self-Initiated Self-Initiated
60 FR 3283 60 FR 3283
No No
Governments reached a Governments reached a
Bananas to the EU Bananas to the EU
satisfactory resolution. satisfactory resolution.

97
1995 1995
Costa Rica Costa Rica
Exportation of Exportation of
Self-Initiated Self-Initiated
60 FR 3284 60 FR 3284
No No
Governments reached a Governments reached a
Bananas to the EU Bananas to the EU
satisfactory resolution. satisfactory resolution.

98
1995 1995
Canada Canada
Communications Communications
Petition Petition
60 FR 8101 60 FR 8101
No No
Private parties (Country Private parties (Country
Practices (U.S.- Practices (U.S.-
Music Television and the Music Television and the
Owned Owned
New Country Network) New Country Network)
Programming Programming
reached a resolution. reached a resolution.
Services) Services)

99
1995 1995
Japan Japan
Consumer Consumer
Petition Petition
60 FR 35447 60 FR 35447
No No
The United States filed a case The United States filed a case
Photographic Film Photographic Film
before the WTO (DS44). before the WTO (DS44).
and Paper and Paper

100
1995 1995
EU EU
EU Banana Regime Self-Initiated EU Banana Regime Self-Initiated
60 FR 52026 60 FR 52026
No No
The United States filed a case The United States filed a case
before the WTO (DS27). before the WTO (DS27).

101
1995 1995
EU EU
EU Enlargement EU Enlargement
Self-Initiated Self-Initiated
60 FR 55076 60 FR 55076
No No
Governments signed the Governments signed the
(Withdrawing (Withdrawing
“Agreement for the “Agreement for the
Concessions and Concessions and
Conclusion of Negotiations Conclusion of Negotiations
Increasing Tariffs Increasing Tariffs
Between the United States Between the United States
on U.S. Trade) on U.S. Trade)
and the European and the European
Community Under Article Community Under Article
XXIV:6 of the GATT of XXIV:6 of the GATT of
1994” (formally signed on 1994” (formally signed on
07/22/1996 with effect 07/22/1996 with effect
12/30/1995) (61 FR 56082). 12/30/1995) (61 FR 56082).

102
1996 1996
Canada Canada
Discriminatory Discriminatory
Self-Initiated Self-Initiated
61 FR 11067 61 FR 11067
No No
The United States filed a case The United States filed a case
Treatment of Treatment of
before the WTO (DS31). before the WTO (DS31).
CRS- CRS-5253

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes
Imported Imported
Periodicals Periodicals

103
1996 1996
Portugal Portugal
Term of Patent Term of Patent
Self-Initiated Self-Initiated
61 FR 19970 61 FR 19970
No No
The United States filed a case The United States filed a case
Protection Protection
before the WTO (DS37). before the WTO (DS37).

104
1996 1996
Pakistan Pakistan
Patent Protection Patent Protection
Self-Initiated Self-Initiated
61 FR 19971 61 FR 19971
No No
The United States filed a case The United States filed a case
for for
before the WTO (DS36). before the WTO (DS36).
Pharmaceuticals Pharmaceuticals
and Agricultural and Agricultural
Chemicals Chemicals

105
1996 1996
Turkey Turkey
Discriminatory Discriminatory
Self-Initiated Self-Initiated
61 FR 32883 61 FR 32883
No No
The United States filed a case The United States filed a case
Tax on Box Office Tax on Box Office
61 FR 30646 61 FR 30646
before the WTO (DS43). before the WTO (DS43).
Revenues Revenues

106
1996 1996
India India
Patent Protection Patent Protection
Self-Initiated Self-Initiated
61 FR 35857 61 FR 35857
No No
The United States filed a case The United States filed a case
for for
before the WTO (DS50). before the WTO (DS50).
Pharmaceuticals Pharmaceuticals
and Agricultural and Agricultural
Chemicals Chemicals

107
1996 1996
Australia Australia
Subsidies Affecting Petition Subsidies Affecting Petition
61 FR 55063 61 FR 55063
No No
The United States filed a case The United States filed a case
Leather Leather
before the WTO (DS57). before the WTO (DS57).

108
1996 1996
Argentina Argentina
Duties and Non- Duties and Non-
Self-Initiated Self-Initiated
61 FR 53776 61 FR 53776
No No
The United States filed a case The United States filed a case
Tariff Barriers Tariff Barriers
before the WTO (DS56). before the WTO (DS56).
Affecting Apparel, Affecting Apparel,
Textiles, and Textiles, and
Footwear Footwear

109
1996 1996
Indonesia Indonesia
Incentives Related Incentives Related
Self-Initiated Self-Initiated
61 FR 54246 61 FR 54246
No No
The United States filed a case The United States filed a case
to the Promotion to the Promotion
before the WTO (DS59). before the WTO (DS59).
of the Indonesian of the Indonesian
Motor Vehicle Motor Vehicle
Sector Sector

110
1996 1996
Brazil Brazil
Trade and Trade and
Self-Initiated Self-Initiated
61 FR 54485 61 FR 54485
No No
The United States filed a case The United States filed a case
Investment in the Investment in the
before the WTO before the WTO
Auto Sector Auto Sector
(DS52/DS65). (DS52/DS65).
CRS- CRS-5354

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes

111
1997 1997
EU EU
Subsidies Affecting Petition Subsidies Affecting Petition
62 FR 12264 62 FR 12264
No No
The investigation was The investigation was
Access to the Access to the ~~EU's~~
terminated effective terminated effective
EU’s Market for Market for
06/06/1997 (62 FR 32398). 06/06/1997 (62 FR 32398).
Modified Starch Modified Starch

112
1997 1997
Japan Japan
Market Access Market Access
Self-Initiated Self-Initiated
62 FR 53853 62 FR 53853
No No
The United States filed a case The United States filed a case
Barriers to Barriers to
before the WTO (DS76). before the WTO (DS76).
Agricultural Agricultural
Products Products

113
1997 1997
Canada Canada
Export Subsidies Export Subsidies
Petition Petition
62 FR 53851 62 FR 53851
No No
The United States filed a case The United States filed a case
and Market and Market
before the WTO (DS103). before the WTO (DS103).
Access for Dairy Access for Dairy
Products Products

114
1997 1997
EU EU
Circumvention of Circumvention of
Self-Initiated Self-Initiated
62 FR 53852 62 FR 53852
No No
The United States filed a case The United States filed a case
Export Subsidy Export Subsidy
before the WTO (DS104). before the WTO (DS104).
Commitments on Commitments on
Dairy Products Dairy Products

115
1997 1997
Korea Korea
Auto Import Auto Import
Self-Initiated Self-Initiated
62 FR 55843 62 FR 55843
No No
Governments reached a Governments reached a
Barriers Barriers
satisfactory resolution and satisfactory resolution and
signed a memorandum of signed a memorandum of
understanding (MOU). The understanding (MOU). The
investigation was terminated investigation was terminated
on 10/20/1998 (63 FR on 10/20/1998 (63 FR
59836). 59836).
116
1997 1997
Honduras Honduras
Intellectual Intellectual
Self-Initiated Self-Initiated
62 FR 60299 62 FR 60299
Yes Yes
Suspend preferential Suspend preferential
Retaliatory action was Retaliatory action was
Property Property
(Unilateral) (Unilateral)
treatment accorded under terminated. Governments treatment accorded under terminated. Governments
the Generalized System of reached a satisfactory the Generalized System of reached a satisfactory
Preferences (GSP) and Preferences (GSP) and
resolution. The United States resolution. The United States
Caribbean Basin Initiative Caribbean Basin Initiative
restored the tariff-free restored the tariff-free
(CBI) programs to certain (CBI) programs to certain
treatment under the treatment under the
products from Honduras, products from Honduras,
Generalized System of Generalized System of
including certain including certain
Preferences (GSP) and Preferences (GSP) and
cucumbers, watermelons, cucumbers, watermelons,
Caribbean Basin Initiative Caribbean Basin Initiative
and cigars. and cigars.
(CBI) programs accorded to (CBI) programs accorded to
CRS- CRS-5455

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes
products of Honduras in products of Honduras in
response to the Government response to the Government
of Honduras’ measures to of Honduras’ measures to
combat piracy and to protect combat piracy and to protect
U.S. intellectual property U.S. intellectual property
rights. rights.

117
1998 1998
Paraguay Paraguay
Intellectual Intellectual
Self-Initiated Self-Initiated
63 FR 9292 63 FR 9292
No No
Governments reached a Governments reached a
Property Property
satisfactory resolution and satisfactory resolution and
signed a memorandum of signed a memorandum of
understanding (MOU). The understanding (MOU). The
investigation was terminated investigation was terminated
on 11/17/1998 (63 FR on 11/17/1998 (63 FR
64982). New MOU signed on 64982). New MOU signed on
04/20/2008. 04/20/2008.

118
1998 1998
Mexico Mexico
High Fructose High Fructose
Petition Petition
63 FR 28544 63 FR 28544
No No
The United States filed a case The United States filed a case
Corn Syrup Corn Syrup
before the WTO before the WTO
(DS101/DS132). (DS101/DS132).

119
1999 1999
Canada Canada
Tourism and Tourism and
Petition Petition
64 FR 28545 64 FR 28545
No No
Governments reached a Governments reached a
Sport Fishing Sport Fishing
satisfactory resolution. satisfactory resolution.
Ontario revoked the Ontario revoked the
provincial measures affecting provincial measures affecting
certain U.S. providers of certain U.S. providers of
tourism services and the tourism services and the
Government of Canada Government of Canada
agreed that the immigration agreed that the immigration
measure under investigation measure under investigation
would be reviewed by the would be reviewed by the
NAFTA Temporary Entry NAFTA Temporary Entry
Working Group. The Working Group. The
investigation was terminated investigation was terminated
on 02/15/2000 (65 FR 7606). on 02/15/2000 (65 FR 7606).

120
2000 2000
Canada Canada
Canadian Wheat Canadian Wheat
Petition Petition
65 FR 69362 65 FR 69362
No No
The United States filed a case The United States filed a case
Board Board
before the WTO (DS276). before the WTO (DS276).
CRS- CRS-5556

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes
121
2001 2001
Ukraine Ukraine
Intellectual Intellectual
Self-Initiated Self-Initiated
66 FR 18346 66 FR 18346
Yes Yes
Suspended preferential Suspended preferential
Retaliatory action was Retaliatory action was
Property Property
(Unilateral) (Unilateral)
treatment accorded under terminated. Governments treatment accorded under terminated. Governments
the Generalized System of reached a satisfactory the Generalized System of reached a satisfactory
Preferences (GSP) to Preferences (GSP) to
resolution. The United States resolution. The United States
certain products from certain products from
terminated the 100% terminated the 100% ad
Ukraine (Action 1). Ukraine (Action 1).
valorem duties in place on duties in place on
Imposed 100% ad valorem U.S. imports from Ukraine in Imposed 100% ad valorem U.S. imports from Ukraine in
duties on Ukrainian duties on Ukrainian
response to the Government response to the Government
products with an annual products with an annual
of Ukraine’s adoption of of Ukraine’s adoption of
trade value of trade value of
improvements to its improvements to its
approximately $75 mil ion approximately $75 mil ion
legislation protecting legislation protecting
(Action 2) (Action 2)
intellectual property rights intellectual property rights
(Action 1). The United States (Action 1). The United States
subsequently restored the subsequently restored the
tariff-free treatment under tariff-free treatment under
GSP accorded to products of GSP accorded to products of
Ukraine and revoked the Ukraine and revoked the
identification of Ukraine as a identification of Ukraine as a
“Priority Foreign Country” “Priority Foreign Country”
under Section 182 of the under Section 182 of the
Trade Act of 1974 and placed Trade Act of 1974 and placed
it on the “Priority Watch it on the “Priority Watch
List” in response to the List” in response to the
Government of Ukraine's Government of Ukraine's
improving its intellectual improving its intellectual
property right enforcement property right enforcement
efforts (Action 2). efforts (Action 2).
122
2009 2009
Canada Canada
Softwood Lumber Softwood Lumber
Self-Initiated Self-Initiated
74 FR 17276 74 FR 17276
Yes Yes
Imposed 10% Imposed 10% ad valorem
Retaliatory action was Retaliatory action was
Agreement Agreement
74 FR 16436 74 FR 16436
(Unilateral) (Unilateral)
duties on imports of duties on imports of
terminated. Governments terminated. Governments
Compliance Compliance
softwood lumber softwood lumber
reached a satisfactory reached a satisfactory
products from the products from the
resolution. The United States resolution. The United States
provinces of Ontario, provinces of Ontario,
terminated the 10% terminated the 10% ad
Quebec, Manitoba, and Quebec, Manitoba, and
valorem duties on imports of duties on imports of
Saskatchewan due to Saskatchewan due to
softwood lumber products in softwood lumber products in
Canada's failure to comply response to the Government Canada's failure to comply response to the Government
with certain obligations with certain obligations
of Canada's adoption of its of Canada's adoption of its
CRS- CRS-5657

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes
under the 2006 Softwood under the 2006 Softwood
own measures to address its own measures to address its
Lumber Agreement (SLA). breach of the SLA. Lumber Agreement (SLA). breach of the SLA.
The duties were to be The duties were to be
imposed until the United imposed until the United
States had col ected $54.8 States had col ected $54.8
mil ion. mil ion.

123
2010 2010
China China
Trade and Trade and
Petition Petition
75 FR 64776 75 FR 64776
No No
Governments reached a Governments reached a
investment in investment in
satisfactory resolution. China satisfactory resolution. China
Green Green
invalidated WTO- invalidated WTO-
Technologies Technologies
inconsistent measures. inconsistent measures.

124
2013 2013
Ukraine Ukraine
Intellectual Intellectual
Self-Initiated Self-Initiated
78 FR 33886 78 FR 33886
No No
Retaliatory action not taken Retaliatory action not taken
Property Property
due to Ukraine's political due to Ukraine's political
situation. situation.
125
2017 2017
China China
Technology Technology
Self-Initiated Self-Initiated
82 FR 40213 82 FR 40213
Yes Yes
Imposed additional ad Imposed additional ad
Governments reached a Governments reached a
transfer, transfer,
(Unilateral) (Unilateral)
valorem duties of 10%, valorem duties of 10%,
partial agreement (“U.S.- partial agreement (“U.S.-
Intellectual Intellectual
15%, and 25% on over 15%, and 25% on over
China Phase One Trade China Phase One Trade
Property, and Property, and
two-thirds of U.S. imports Agreement”) on 01/15/2020. two-thirds of U.S. imports Agreement”) on 01/15/2020.
Innovation Innovation
from China. from China.
The United States also filed a The United States also filed a
case before the WTO case before the WTO
(DS542) pertaining China’s (DS542) pertaining China’s
discriminatory technology discriminatory technology
licensing requirements. licensing requirements.
However, the case was However, the case was
suspended, most recently, suspended, most recently,
effective 06/08/2020. For effective 06/08/2020. For
details on China’s WTO case details on China’s WTO case
against the United States, see against the United States, see
DS543. DS543.
126
2019 2019
EU EU
Subsidies to the Subsidies to the
Self-Initiated Self-Initiated
84 FR 15028 84 FR 15028
Yes Yes
Imposed additional Imposed additional ad
The United States filed a case The United States filed a case
large civil aircraft large civil aircraft
(WTO- (WTO-
valorem duties of 10% and duties of 10% and
before the WTO (DS316), before the WTO (DS316),
domestic industry domestic industry
Sanctioned) Sanctioned)
25% on a list of products 25% on a list of products
and it used Section 301 and it used Section 301
with an approximate with an approximate
authorities to implement authorities to implement
annual trade value of $7.5 annual trade value of $7.5
WTO-sanctioned tariffs. WTO-sanctioned tariffs.
bil ion. bil ion.
CRS- CRS-5758

Federal
Retaliatory
Type of
Register
Action by
Case
Year
Economy
Issue
Investigation
Notice
USTR
Type of Action
Notes
127
2019 2019
France France
Digital Services Digital Services
Self-Initiated Self-Initiated
84 FR 34042 84 FR 34042
Yes Yes
Imposed additional Imposed additional ad
Application of additional Application of additional
Tax Tax
(Unilateral/ (Unilateral/
valorem duties of 25% on duties of 25% on
duties was immediately duties was immediately
Suspended) Suspended)
$1.3 bil ion worth of $1.3 bil ion worth of
suspended, effective suspended, effective
French imports. French imports.
07/10/2020 until 01/06/2021 07/10/2020 until 01/06/2021
(85 FR 43292). (85 FR 43292).
128
2020 2020
Austria Austria
Digital Services Digital Services
Self-Initiated Self-Initiated
85 FR 34709 85 FR 34709

Investigation is ongoing. Investigation is ongoing.
Brazil Brazil
Taxes Taxes
Czech Czech
Republic Republic
EU EU
India India
Indonesia Indonesia
Italy Italy
Spain Spain
Turkey Turkey
UK UK
129
2020 2020
Vietnam Vietnam
Currency Currency
Self-Initiated Self-Initiated
85 FR 63637 85 FR 63637

Investigation is ongoing. Investigation is ongoing.
Valuation Valuation
130
2020 2020
Vietnam Vietnam
Import and Use of Import and Use of
Self-Initiated Self-Initiated
85 FR 63639 85 FR 63639

Investigation is ongoing. Investigation is ongoing.
Il egal Timber Il egal Timber
Source: Congressional Research Service with information sourced from the Congressional Research Service with information sourced from the Federal Register, the Office of the USTR’s annual “Trade Policy Agendas” and “Annual , the Office of the USTR’s annual “Trade Policy Agendas” and “Annual
Reports of the President of the United States on the Trade Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports. Reports of the President of the United States on the Trade Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports.
CRS- CRS-5859

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Table A-2. Section 301 Investigations: 1975-Present
Case
Economy
Year
Petition/Self-Initiated
1 1
Guatemala Guatemala
1975 1975
Petition Petition
2 2
Canada Canada
1975 1975
Petition Petition
3 3
European Communities European Communities
1975 1975
Petition Petition
4 4
European Communities European Communities
1975 1975
Petition Petition
5 5
European Communities European Communities
1975 1975
Petition Petition
6 6
European Communities European Communities
1975 1975
Petition Petition
7 7
European Communities European Communities
1976 1976
Petition Petition
8 8
European Communities European Communities
1976 1976
Petition Petition
9 9
Taiwan Taiwan
1976 1976
Petition Petition
10 10
European Communities European Communities
1976 1976
Petition Petition

Japan Japan

11 11
European Communities European Communities
1976 1976
Petition Petition
12 12
Brazil Brazil
1977 1977
Petition Petition

Korea Korea

China China

13 13
Japan Japan
1977 1977
Petition Petition
14 14
Union of Soviet Socialist Republics (Soviet Union) Union of Soviet Socialist Republics (Soviet Union)
1977 1977
Petition Petition
15 15
Canada Canada
1978 1978
Petition Petition
16 16
European Communities European Communities
1978 1978
Petition Petition
17 17
Japan Japan
1979 1979
Petition Petition
18 18
Argentina Argentina
1979 1979
Petition Petition
19 19
Japan Japan
1979 1979
Petition Petition
20 20
Korea Korea
1979 1979
Petition Petition
21 21
Switzerland Switzerland
1979 1979
Petition Petition
22 22
European Communities European Communities
1981 1981
Petition Petition
23 23
European Communities European Communities
1981 1981
Petition Petition
24 24
Argentina Argentina
1981 1981
Petition Petition
25 25
European Communities European Communities
1981 1981
Petition Petition
26 26
European Communities European Communities
1981 1981
Petition Petition
27 27
Austria Austria
1982 1982
Petition Petition
28 28
France France
1982 1982
Petition Petition
29 29
Italy Italy
1982 1982
Petition Petition
30 30
Sweden Sweden
1982 1982
Petition Petition
31 31
United Kingdom United Kingdom
1982 1982
Petition Petition
32 32
Canada Canada
1982 1982
Petition Petition
Congressional Research Service Congressional Research Service

160

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Case
Economy
Year
Petition/Self-Initiated
33 33
Belgium Belgium
1982 1982
Petition Petition
34 34
Canada Canada
1982 1982
Petition Petition
35 35
Brazil Brazil
1982 1982
Petition Petition
36 36
Japan Japan
1982 1982
Petition Petition
37 37
Korea Korea
1982 1982
Petition Petition
38 38
Taiwan Taiwan
1982 1982
Petition Petition
39 39
Korea Korea
1983 1983
Petition Petition
40 40
Brazil Brazil
1983 1983
Petition Petition
41 41
Portugal Portugal
1983 1983
Petition Petition
42 42
Spain Spain
1983 1983
Petition Petition
43 43
Taiwan Taiwan
1983 1983
Petition Petition
44 44
Argentina Argentina
1983 1983
Petition Petition
45 45
Taiwan Taiwan
1984 1984
Petition Petition
46 46
European Communities European Communities
1984 1984
Petition Petition
47 47
European Communities European Communities
1984 1984
Petition Petition
48 48
Japan Japan
1985 1985
Petition Petition
49 49
Brazil Brazil
1985 1985
Self-Initiated Self-Initiated
50 50
Japan Japan
1985 1985
Self-Initiated Self-Initiated
51 51
Korea Korea
1985 1985
Self-Initiated Self-Initiated
52 52
Korea Korea
1985 1985
Self-Initiated Self-Initiated
53 53
Argentina Argentina
1986 1986
Petition Petition
54 54
European Communities European Communities
1986 1986
Self-Initiated Self-Initiated
55 55
Canada Canada
1986 1986
Petition Petition
56 56
Taiwan Taiwan
1986 1986
Self-Initiated Self-Initiated
57 57
Taiwan Taiwan
1986 1986
Self-Initiated Self-Initiated
58 58
Canada Canada
1986 1986
Self-Initiated Self-Initiated
59 59
India India
1987 1987
Petition Petition
60 60
European Communities European Communities
1987 1987
Petition Petition
61 61
Brazil Brazil
1987 1987
Petition Petition
62 62
European Communities European Communities
1987 1987
Self-Initiated Self-Initiated
63 63
European Communities European Communities
1988 1988
Petition Petition
64 64
Korea Korea
1988 1988
Petition Petition
65 65
Korea Korea
1988 1988
Petition Petition
66 66
Japan Japan
1988 1988
Petition Petition
67 67
Korea Korea
1988 1988
Petition Petition
68 68
Argentina Argentina
1988 1988
Petition Petition
Congressional Research Service Congressional Research Service

261

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Case
Economy
Year
Petition/Self-Initiated
69 69
Japan Japan
1988 1988
Self-Initiated Self-Initiated
70 70
European Communities European Communities
1988 1988
Petition Petition
71 71
European Communities European Communities
1989 1989
Self-Initiated Self-Initiated
72 72
Thailand Thailand
1989 1989
Petition Petition
73 73
Brazil Brazil
1989 1989
Self-Initiated Self-Initiated
74 74
Japan Japan
1989 1989
Self-Initiated Self-Initiated
75 75
Japan Japan
1989 1989
Self-Initiated Self-Initiated
76 76
Japan Japan
1989 1989
Self-Initiated Self-Initiated
77 77
India India
1989 1989
Self-Initiated Self-Initiated
78 78
India India
1989 1989
Self-Initiated Self-Initiated
79 79
Norway Norway
1989 1989
Petition Petition
80 80
Canada Canada
1990 1990
Petition Petition
81 81
European Communities European Communities
1990 1990
Self-Initiated Self-Initiated
82 82
Thailand Thailand
1990 1990
Petition Petition
83 83
European Communities European Communities
1991 1991
Petition Petition
84 84
Thailand Thailand
1991 1991
Petition Petition
85 85
India India
1991 1991
Self-Initiated Self-Initiated
86 86
China China
1991 1991
Self-Initiated Self-Initiated
87 87
Canada Canada
1991 1991
Self-Initiated Self-Initiated
88 88
China China
1991 1991
Self-Initiated Self-Initiated
89 89
Taiwan Taiwan
1992 1992
Self-Initiated Self-Initiated
90 90
Indonesia Indonesia
1992 1992
Petition Petition
91 91
Brazil Brazil
1993 1993
Self-Initiated Self-Initiated
92 92
China China
1994 1994
Self-Initiated Self-Initiated
93 93
Japan Japan
1994 1994
Self-Initiated Self-Initiated
94 94
European Communities European Communities
1994 1994
Petition Petition
95 95
Korea Korea
1994 1994
Petition Petition
96 96
Colombia Colombia
1995 1995
Self-Initiated Self-Initiated
97 97
Costa Rica Costa Rica
1995 1995
Self-Initiated Self-Initiated
98 98
Canada Canada
1995 1995
Petition Petition
99 99
Japan Japan
1995 1995
Petition Petition
100 100
European Union European Union
1995 1995
Self-Initiated Self-Initiated
101 101
European Union European Union
1995 1995
Self-Initiated Self-Initiated
102 102
Canada Canada
1996 1996
Self-Initiated Self-Initiated
103 103
Portugal Portugal
1996 1996
Self-Initiated Self-Initiated
104 104
Pakistan Pakistan
1996 1996
Self-Initiated Self-Initiated
Congressional Research Service Congressional Research Service

362

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Case
Economy
Year
Petition/Self-Initiated
105 105
Turkey Turkey
1996 1996
Self-Initiated Self-Initiated
106 106
India India
1996 1996
Self-Initiated Self-Initiated
107 107
Australia Australia
1996 1996
Petition Petition
108 108
Argentina Argentina
1996 1996
Self-Initiated Self-Initiated
109 109
Indonesia Indonesia
1996 1996
Self-Initiated Self-Initiated
110 110
Brazil Brazil
1996 1996
Self-Initiated Self-Initiated
111 111
European Union European Union
1997 1997
Petition Petition
112 112
Japan Japan
1997 1997
Self-Initiated Self-Initiated
113 113
Canada Canada
1997 1997
Petition Petition
114 114
European Union European Union
1997 1997
Self-Initiated Self-Initiated
115 115
Korea Korea
1997 1997
Self-Initiated Self-Initiated
116 116
Honduras Honduras
1997 1997
Self-Initiated Self-Initiated
117 117
Paraguay Paraguay
1998 1998
Self-Initiated Self-Initiated
118 118
Mexico Mexico
1998 1998
Petition Petition
119 119
Canada Canada
1999 1999
Petition Petition
120 120
Canada Canada
2000 2000
Petition Petition
121 121
Ukraine Ukraine
2001 2001
Self-Initiated Self-Initiated
122 122
Canada Canada
2009 2009
Self-Initiated Self-Initiated
123 123
China China
2010 2010
Petition Petition
124 124
Ukraine Ukraine
2013 2013
Self-Initiated Self-Initiated
125 125
China China
2017 2017
Self-Initiated Self-Initiated
126 126
European Union European Union
2019 2019
Self-Initiated Self-Initiated
127 127
France France
2019 2019
Self-Initiated Self-Initiated
128 128
Austria Austria
2020 2020
Self-Initiated Self-Initiated
Brazil Brazil
Czech Republic Czech Republic
European Union European Union
India India
Indonesia Indonesia
Italy Italy
Spain Spain
Turkey Turkey
United Kingdom United Kingdom
129 129
Vietnam Vietnam
2020 2020
Self-Initiated Self-Initiated
130 130
Vietnam Vietnam
2020 2020
Self-Initiated Self-Initiated
Source: Congressional Research Service with information sourced from the Congressional Research Service with information sourced from the Federal Register, the Office of the , the Office of the
USTR’s annual “Trade Policy Agendas” and “Annual Reports of the President of the United States on the Trade USTR’s annual “Trade Policy Agendas” and “Annual Reports of the President of the United States on the Trade
Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports. Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports.
Notes: Includes all investigations initiated by the Office of the U.S. Trade Representative, regardless of whether Includes all investigations initiated by the Office of the U.S. Trade Representative, regardless of whether
the case was suspended or combined with others, or whether the USTR ultimately took action under Section the case was suspended or combined with others, or whether the USTR ultimately took action under Section
301. 301.
Congressional Research Service Congressional Research Service

463

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Table A-3. Summary of Section 301 Investigations by Economy: 1975-Present
Economy
Frequency
European Union (EU) or EU Member States European Union (EU) or EU Member States
45 45
EU (including European Communities) EU (including European Communities)
30 30
Austria Austria
2 2
France France
2 2
Italy Italy
2 2
Portugal Portugal
2 2
Spain Spain
2 2
United Kingdom United Kingdom
2 2
Belgium Belgium
1 1
Czech Republic Czech Republic
1 1
Sweden Sweden
1 1
Japan Japan
15 15
Canada Canada
14 14
Korea Korea
11 11
Brazil Brazil
9 9
Taiwan Taiwan
7 7
Argentina Argentina
6 6
China China
6 6
India India
6 6
Indonesia Indonesia
3 3
Thailand Thailand
3 3
Turkey Turkey
2 2
Ukraine Ukraine
2 2
Vietnam Vietnam
2 2
Australia Australia
1 1
Colombia Colombia
1 1
Costa Rica Costa Rica
1 1
Guatemala Guatemala
1 1
Honduras Honduras
1 1
Mexico Mexico
1 1
Norway Norway
1 1
Pakistan Pakistan
1 1
Paraguay Paraguay
1 1
Switzerland Switzerland
1 1
Soviet Union (USSR) Soviet Union (USSR)
1 1
Congressional Research Service Congressional Research Service

564

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Source: Congressional Research Service with information sourced from the Congressional Research Service with information sourced from the Federal Register, the Office of the , the Office of the
USTR’s annual “Trade Policy Agendas” and “Annual Reports of the President of the United States on the Trade USTR’s annual “Trade Policy Agendas” and “Annual Reports of the President of the United States on the Trade
Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports. Agreements Program,” and the U.S. International Trade Commission’s “Year in Trade” reports.
Notes: Includes all investigations initiated by the Office of the U.S. Trade Representative, regardless of whether Includes all investigations initiated by the Office of the U.S. Trade Representative, regardless of whether
the case was suspended or combined with others, or whether the USTR ultimately took action under Section the case was suspended or combined with others, or whether the USTR ultimately took action under Section
301. 301.
Congressional Research Service Congressional Research Service

665

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Appendix B. Legislative Proposals Related to
Section 301
Table B-1. Select Legislative Proposals Related to Section 301 Authorities
116th Congress (2019-Present) 116th Congress (2019-Present)
Date of
Introduction
Legislation
Title
Brief Description
01/03/2019 01/03/2019
H.Con.Res. 2 H.Con.Res. 2
Reclaiming Reclaiming
Establishes (1) a Joint Ad Hoc Committee on Trade Establishes (1) a Joint Ad Hoc Committee on Trade
Congress's Congress's
Responsibilities to develop a plan under which the Responsibilities to develop a plan under which the
Constitutional Constitutional
functions and responsibilities of the Office of the USTR functions and responsibilities of the Office of the USTR
Mandate in Trade Mandate in Trade
shall be moved to the legislative branch, and (2) a shall be moved to the legislative branch, and (2) a
Resolution Resolution
Congressional Advisory Board on Trade Congressional Advisory Board on Trade
Responsibilities to advise the committee in its Responsibilities to advise the committee in its
development of the plan. development of the plan.
01/17/2019 01/17/2019
S. 188 S. 188
Border, Law Border, Law
Makes revenue from certain duties imposed on goods Makes revenue from certain duties imposed on goods
Enforcement, Enforcement,
imported from the China available for border security, imported from the China available for border security,
Operational Operational
and for other purposes. and for other purposes.
Control, and Control, and
Sovereignty Act of Sovereignty Act of
2019 2019
01/23/2019 01/23/2019
H.R. 723 H.R. 723
Global Trade Global Trade
Requires congressional approval of unilateral trade Requires congressional approval of unilateral trade
Accountability Act Accountability Act
actions. Such actions may take effect without actions. Such actions may take effect without
of 2019 of 2019
congressional approval for one 90-day period if the congressional approval for one 90-day period if the
President determines that it is necessary because of a President determines that it is necessary because of a
national emergency, because of an imminent threat to national emergency, because of an imminent threat to
health or safety, for the enforcement of criminal laws, health or safety, for the enforcement of criminal laws,
or for national security; and submits written notice of or for national security; and submits written notice of
the determination to Congress. the determination to Congress.
01/30/2019 01/30/2019
H.R. 902 H.R. 902
Protect American Protect American
Directs the President to impose duties on merchandise Directs the President to impose duties on merchandise
IPR Act IPR Act
from the China to compensate holders of U.S. from the China to compensate holders of U.S.
intellectual property rights for losses resulting from intellectual property rights for losses resulting from
violations of such intellectual property rights in China, violations of such intellectual property rights in China,
and for other purposes. and for other purposes.
02/27/2019 02/27/2019
S. 577 S. 577
Import Tax Relief Import Tax Relief
Requires the President to establish a process by which Requires the President to establish a process by which
Act of 2019 Act of 2019
certain articles imported from China may be excluded certain articles imported from China may be excluded
from duties. from duties.
02/28/2019 02/28/2019
H.R. 1452 H.R. 1452
Import Tax Relief Import Tax Relief
Requires the President to establish a process by which Requires the President to establish a process by which
Act of 2019 Act of 2019
certain articles imported from China may be excluded certain articles imported from China may be excluded
from duties. from duties.
03/27/2019 03/27/2019
S. 899 S. 899
Reclaiming Reclaiming
Limits the authority of the President to modify duty Limits the authority of the President to modify duty
Congressional Congressional
rates for national security reasons and to limit the rates for national security reasons and to limit the
Trade Authority Trade Authority
authority of the USTR to impose certain duties or authority of the USTR to impose certain duties or
Act of 2019 Act of 2019
import restrictions, and for other purposes. import restrictions, and for other purposes.
05/02/2019 05/02/2019
S. 1284 S. 1284
Global Trade Global Trade
Provides for congressional review of the imposition of Provides for congressional review of the imposition of
Accountability Act Accountability Act
duties and other trade measures by the executive duties and other trade measures by the executive
of 2019 of 2019
branch, and for other purposes branch, and for other purposes
06/25/2019 06/25/2019
H.R. 3477 H.R. 3477
Reclaiming Reclaiming
Limits the authority of the President to modify duty Limits the authority of the President to modify duty
Congressional Congressional
rates for national security reasons and to limit the rates for national security reasons and to limit the
Trade Authority Trade Authority
authority of the USTR to impose certain duties or authority of the USTR to impose certain duties or
Act of 2019 Act of 2019
import restrictions, and for other purposes. import restrictions, and for other purposes.
Congressional Research Service Congressional Research Service

766

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Date of
Introduction
Legislation
Title
Brief Description
07/31/2019 07/31/2019
S. 2362 S. 2362
American Business Requires the USTR to establish a process whereby U.S. American Business Requires the USTR to establish a process whereby U.S.
Tariff Relief Act of Tariff Relief Act of
businesses may request that articles newly subject to businesses may request that articles newly subject to
2019 2019
raised import duties be excluded from such duties. For raised import duties be excluded from such duties. For
an exclusion to be granted, the business seeking the an exclusion to be granted, the business seeking the
exclusion must demonstrate the articleexclusion must demonstrate the article'’s unavailability s unavailability
from any other source or that the duty would cause from any other source or that the duty would cause
economic harm to a U.S. interest. economic harm to a U.S. interest.
10/24/2019 10/24/2019
S. 2697 S. 2697
Tariff Tax Credit Tariff Tax Credit
Allows a new refundable tax credit for the return to Allows a new refundable tax credit for the return to
Act of 2019 Act of 2019
taxpayers of revenue raised from duties imposed on taxpayers of revenue raised from duties imposed on
goods imported from China in preceding calendar goods imported from China in preceding calendar
years. years.
07/16/2020 07/16/2020
H.R. 7665 H.R. 7665
To direct the To direct the
Requires the USTR to extend for at least one year the Requires the USTR to extend for at least one year the
United States United States
exclusion of certain Chinese goods from additional exclusion of certain Chinese goods from additional
Trade Trade
duties. Such goods include medical-care products duties. Such goods include medical-care products
Representative to Representative to
needed to address the COVID-19 pandemic. needed to address the COVID-19 pandemic.
extend the extend the
exclusions of exclusions of
goods of China goods of China
from additional from additional
duties imposed duties imposed
under section 301 under section 301
of the Trade Act of the Trade Act
of 1974, and for of 1974, and for
other purposes. other purposes.
08/06/2020 08/06/2020
S. 4493 S. 4493
USTR Inspector USTR Inspector
Requires the President to appoint an Inspector General Requires the President to appoint an Inspector General
General Act of General Act of
of the Office of the USTR, who shall conduct an audit of the Office of the USTR, who shall conduct an audit
2020 2020
of the process for excluding articles from certain duties of the process for excluding articles from certain duties
with respect to articles imported from China. with respect to articles imported from China.
08/06/2020 08/06/2020
S. 4497 S. 4497
Stop PPE Taxes Stop PPE Taxes
Suspends through December 31, 2022, any duty Suspends through December 31, 2022, any duty
Act of 2020 Act of 2020
imposed on specified articles and articles identified by imposed on specified articles and articles identified by
the U.S. International Trade Commission as related to the U.S. International Trade Commission as related to
the response to COVID-19, including any duty imposed the response to COVID-19, including any duty imposed
pursuant to (1) Section 301 of the Trade Act of 1974, pursuant to (1) Section 301 of the Trade Act of 1974,
(2) Section 232 of the Trade Expansion Act of 1962, or (2) Section 232 of the Trade Expansion Act of 1962, or
(3) the International Emergency Economic Powers Act. (3) the International Emergency Economic Powers Act.
08/07/2020 08/07/2020
H.R. 7980 H.R. 7980
USTR Inspector USTR Inspector
Amends the Inspector General Act of 1978 to establish Amends the Inspector General Act of 1978 to establish
General Act of General Act of
an Inspector General of the Office of the United States an Inspector General of the Office of the United States
2020 2020
Trade Representative, and for other purposes. Trade Representative, and for other purposes.
09/17/2020 09/17/2020
S. 4629 S. 4629
America LEADS America LEADS
Addresses issues involving the People Addresses issues involving the People'’s Republic of s Republic of
Act Act
China (including Section 301 actions). China (including Section 301 actions).
Source: Congressional Research Service with information from CONGRESS.GOV. Congressional Research Service with information from CONGRESS.GOV.

Congressional Research Service Congressional Research Service

867

Section 301 of the Trade Act of 1974: Origin, Evolution, and Use

Author Information

Andres B. Schwarzenberg Andres B. Schwarzenberg

Analyst in International Trade and Finance Analyst in International Trade and Finance

Acknowledgments
The author is grateful to the following individuals for their thoughtful and detailed comments and The author is grateful to the following individuals for their thoughtful and detailed comments and
suggestions: Cathleen D. Cimino-Isaacs, Christopher A. Casey, Rachel F. Fefer, Vivian C. Jones, Brandon suggestions: Cathleen D. Cimino-Isaacs, Christopher A. Casey, Rachel F. Fefer, Vivian C. Jones, Brandon
J. Murrill, Dianne E. Rennack, and Mallary A. Stouffer. The author also thanks Amber Hope Wilhelm for J. Murrill, Dianne E. Rennack, and Mallary A. Stouffer. The author also thanks Amber Hope Wilhelm for
developing graphics for this report. developing graphics for this report.

Disclaimer
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Congressional Research Service Congressional Research Service
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