[News Terms] US Initiates 'Super 301' on Chinese Steel

WTO Rules Violated but World's Largest Consumer Market 'US Power' Cannot Be Ignored
China Considers 25% Tariffs on Steel and Aluminum, Also Investigates Shipbuilding, Maritime, and Logistics Sectors

'Super 301' is a nickname for Section 301 of the Omnibus Trade and Competitiveness Act of 1988, which allows discriminatory retaliation against trading partner countries.

The United States enacted the Omnibus Trade Act in 1988 by adding discriminatory retaliation provisions against trading partner countries to Section 301 of the Trade Act of 1974. Sections 301 to 309 of the Trade Act of 1974 are referred to as 'Regular 301,' while Section 301 of the Omnibus Trade Act of 1988 is called 'Super 301' because it strengthened the retaliation provisions.

U.S. President Joe Biden is delivering a speech at the U.S. Capitol in Washington, DC, on the 7th of last month (local time).
[Photo by Washington EPA/Yonhap News]

At this time, Section 182, which stipulates procedures for designating countries with poor protection of intellectual property rights and market access, was also added. This provision is commonly called 'Special 301.'

Unlike the existing Regular 301, it grants the United States Trade Representative (USTR) the authority to investigate and take retaliatory measures against unfair trade practices, and the President’s discretion is also recognized if deemed necessary when deciding on retaliation measures.

Under Super 301, the U.S. administration designated countries judged to have severe unfair practices as priority negotiation countries twice in 1989 and 1990, and sought to correct unfair practices through negotiations lasting 12 to 18 months with the parties involved. For countries where negotiations broke down, the U.S. imposed retaliatory measures such as 100% retaliatory tariffs on specific products and the abolition of trade agreements.

However, this law has been criticized for being unilateral retaliation without going through international dispute resolution procedures, violating World Trade Organization (WTO) rules. Regardless, the U.S. has ignored international trade organizations like the WTO and has repeatedly stated that withdrawal from the WTO is possible at any time.

Because of this, one might think, "If you dislike the U.S., why not export to countries other than the U.S.?" But honestly, the U.S. is the world's largest consumer market, even bigger than China. Moreover, it is a powerful country that can push for 'secondary boycotts,' imposing sanctions on companies and governments of third countries that trade with sanctioned countries. The international community cannot ignore the influence of the U.S. because of this reality.

The Omnibus Trade Act containing Super 301 was a two-year temporary special law when enacted in 1988, so it was repealed in 1990 during President George H. W. Bush’s administration. It was revived in 1994 by an executive order from President Bill Clinton, then suspended again in 2001 by President George W. Bush. In 2018, President Donald Trump revived it again, and it remains in effect today.

Chinese President Xi Jinping is drinking tea while attending the 2nd plenary session of the National People's Congress (NPC) held at the Great Hall of the People in Beijing on the 8th of last month.
[Photo by AP Beijing/Yonhap News]

South Korea was subject to sanctions under Super 301 in 1989 for agricultural products, foreign investment regulations, intellectual property rights, and telecommunications sectors, in 1996 for telecommunications, and in 1997 for the automobile sector.

On the 17th (local time), the White House stated, "American workers continue to face unfair competition due to imports of Chinese steel and aluminum," and announced that President Joe Biden has instructed the U.S. Trade Representative (USTR) to consider tripling tariffs on Chinese steel and aluminum from the current 7.5% to 25%.

The White House criticized, "China’s protectionist policies and subsidies for its domestic steel and aluminum industries mean that high-quality American products are sold at lower prices by artificially lowered-priced Chinese substitutes that emit more exhaust."

Bloomberg News reported that the USTR, a presidential agency, is conducting an investigation related to Section 301 of the Trade Act, and after the investigation is completed, USTR Representative Katherine Tai will decide whether to raise tariffs. The White House also stated that the USTR is investigating China’s unfair trade practices in the shipbuilding, maritime, and logistics sectors.