“Review of Necessity”

Written by SK Ashby

The Biden administration has resolved the Trump regime's trade war with most of the world by adopting politically-acceptable quota systems that remove blanket tariffs while setting limits on imports, but Trump's more contentious tariffs on Chinese goods are still in place.

Now, as much as they would like to, the White House has not found a feasible way to end Trump's trade war with China that labor unions will support and that leaves the administration with the unenviable task of maintaining the legal framework for keeping tariffs in place.

A so-called "review of necessity" is required by law to continue the trade war and the Biden administration has now initiated that review of tariffs on over $300 billion in goods.

From Bloomberg:

The evaluation, officially known as a “review of necessity,” so far has attracted little attention. It relates to Section 301 of the Trade Act of 1974, the law that President Donald Trump used to hit China with the tariffs starting in July 2018.

The law states that the tariffs expire four years after they were imposed, unless the U.S. Trade Representative’s office analyzes their effectiveness and consequences. The review needs to happen within 60 days of their potential end, which is July 6 for the first group of $34 billion in Chinese goods, with the majority set to expire in the following months.

While it does not seem likely that Trump's legacy trade war with China is going to end anytime soon, it is possible that this "review of necessity" will facilitate tariff exemptions for a significant number of goods.

Any honest review is going to find that very few of the tariffs are actually necessary or that any of them have provided a material benefit to Americans. Moreover, the office of the United States Trade Representative (USTR) recently solicited public comments on exemptions for over 500 imported goods that are subject to tariffs. The trade office has not acted on any of those exemptions, but action could be paired with the "review of necessity."

With no real demonstrable necessity for continuing the war, the Biden administration's rhetoric will likely center around China's failure to comply with the terms of Trump's "phase one" deal that never has and never will receive a second phase.

It's true enough that China hasn't complied and isn't going to, but that's all they've got. I don't envy the White House aides responsible for writing that rhetoric because there's nothing about this that isn't stupid. We're going to continue a trade war that isn't actually helping anyone just because it's not politically acceptable to end it. Everyone knows it's stupid except the trade unions still mired in protectionist rhetoric that's almost as old as I am.