Section 301 of the Trade Act of 1974

On March 15, 2023, the  U.S. International Trade Commission (USITC) released its report on the economic impact of the tariffs on products imported from China starting five years ago.

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An investigative report,  Economic Impact of Section 232 and 301 Tariffs on U.S. Industries (usitc.gov), was mandated by Congress to provide an objective assessment of the tariffs on U.S. industry and consumers. A succinct summary of our comments, which accompanied our longer submission, may be found on page 236 of the report.  There are also references to music products in footnotes on pages 65 and 164.

During USITC’s public comment period for the report, NAMM and members the Musical Instrument Legal Alliance (MILA) submitted a joint letter to the USITC detailing the adverse economic consequences of the tariffs on music businesses and consumers alike. The tariffs, imposed under Section 301 of the Trade Act of 1974, include an extensive array of musical instruments, music accessories and parts, and electronic products widely used across the music industry.  These tariffs range from 7.5 percent to 25 percent, and affect large, mid-sized and small businesses in the U.S, including manufacturers and retailers. 

The USITC report finds that, on average from 2018 to 2021, U.S. importers bore nearly the full cost of these tariffs because import prices increased as the same rate as the tariffs.  In the aggregate, the USITC findings indicate that there was a “pass through” of section 301 tariffs, with the extra costs falling on U.S. manufacturers and other companies importing finished products, accessories and parts used in manufacture of products stateside.  As a result, U.S. businesses, including those in the musical instrument manufacturing industry, have absorbed the costs of the tariffs, leaving fewer resources available for investment or hiring, and/or passed on the costs through higher prices for consumers and downstream buyers.

We will continue to closely monitor this trade issue and keep NAMM members apprised of actions taken by Congress and the Administration in response to the report’s findings.