U.S. Extends Tariff Exemptions on Chinese Goods; Raises Tariffs on Imported Steel and Aluminum as EU Signals Retaliation

On May 31 local time, the Office of the United States Trade Representative announced an extension of certain tariff exemptions related to the Section 301 investigation into China’s practices concerning technology transfer, intellectual property, and innovation. Originally set to expire on May 31, 2025, these exemptions have now been extended through August 31, 2025.

According to the announcement, the decision was based on public feedback received following the December 29, 2023 notice and continuous evaluation during the four-year review. Specifically, the USTR decided to extend 164 exclusions that were prolonged in May 2024 and 14 new exclusions introduced in September 2024, each for an additional three months. This move takes into account public comments, advisory committee recommendations, and input from the interagency Section 301 committee.

A research report by Yuekai Securities noted that during the Trump administration’s initial phase, the U.S. imposed four rounds of Section 301 tariffs on Chinese goods. The first three rounds carried a 25% rate, while the fourth applied a 7.5% rate. According to the Peterson Institute for International Economics (PIIE), the weighted average tariff rate on Chinese goods reached 19.3% in early 2020. Although this figure declined to 10.7% by the end of 2024 due to shifts in China’s export composition, it remains unresolved.

China has repeatedly raised formal objections over the Section 301 tariffs. The World Trade Organization has ruled that these tariffs violate its rules. Chinese authorities have criticized the measures as unilateral and protectionist, arguing that they harm global trade stability and supply chains while failing to address the U.S. trade deficit or industrial competitiveness. The added costs, they say, are ultimately borne by American businesses and consumers.

Meanwhile, the European Union responded strongly to the U.S. decision to raise import tariffs on steel and aluminum. In a statement issued on May 31, the European Commission expressed regret and warned of potential countermeasures. The Commission emphasized that the move increases global economic uncertainty and undermines negotiation-based dispute resolution. Final consultations are underway regarding expanded EU retaliatory measures, which are set to take effect automatically on July 14 if no mutually acceptable agreement is reached—possibly sooner if needed.

Bernd Lange, Chairman of the European Parliament's International Trade Committee, affirmed the EU’s preference for negotiation but stressed its readiness to respond if necessary. Lange recently led a European Parliament delegation to Washington, engaging with U.S. lawmakers and officials.

This follows former President Donald Trump’s May 30 announcement during a Pennsylvania rally, where he pledged to raise steel import tariffs from 25% to 50%. He later confirmed on social media that the increase would take effect on June 4. Trump had previously signed an executive order on February 10 to impose a 25% tariff on all steel and aluminum imports, which officially took effect on March 12.