On the afternoon of February 9, 2025, the “Grandwin Trade & Business Roundtable (Session III): Interpretation of the U.S. Section 301 Report on Maritime, Logistics, and Shipbuilding and the 10% Tariff Increase Policy” was successfully held, moderated by Professor Yang Guohua from Tsinghua University School of Law. The salon brought together a number of distinguished experts, scholars, and practitioners with deep experience in the field of international trade and economics to discuss the Section 301 report on maritime, logistics, and shipbuilding, as well as the latest round of U.S. tariff policies on China, sharing insights on the trends and implications of U.S.-China trade relations.

Professor Yang Guohua, the moderator and a professor at Tsinghua University School of Law, noted that despite the ongoing challenges to international trade rules, legal professionals must continue to uphold their faith in the rule of law and the power of rules. A series of actions taken during the Trump era have not only produced legal impacts but also challenged core values such as international order and social fairness. Against such a turbulent backdrop, this New Year seminar is particularly significant, prompting deeper reflection on the role of the rule of law in safeguarding a just global order.

Sun Lei, Senior Partner at Dentons Beijing, served as the lead speaker and provided an analysis of the U.S. Section 301 investigation on maritime, logistics, and shipbuilding, along with the related tariff measures under the national emergency declaration. He pointed out that prior to 1988, Section 301 rules were discretionary, but later evolved into a duty requiring the U.S. government to respond when its conventional or discretionary interests were impaired. The Office of the U.S. Trade Representative (USTR) holds significant discretion in such matters. In most cases, after the initiation of a Section 301 investigation, the target country and the United States would resolve the issue through consultations. However, in the two investigations targeting China, consultations were not pursued. Sun Lei then analyzed both the procedural and substantive aspects of the investigation into China’s maritime, logistics, and shipbuilding sectors. Procedurally, the Federal Maritime Commission’s initial comments were quickly withdrawn, and it failed to attend the hearings, suggesting the presence of internal coordination or pressure within the U.S. government. Substantively, shipbuilding falls within the scope of Section 301 investigations, and while the U.S. conducted an in-depth review of the state of China’s shipbuilding industry, it was unreasonable to establish a causal link between the rise of China’s shipbuilding sector and the decline of the U.S. shipbuilding industry. Regarding the measures introduced by the Trump administration, Sun Lei commented that current facts indicate Chinese enterprises cannot absorb tariff rates exceeding 25% imposed by the U.S. Moreover, there is no domestic or international legal remedy available to challenge the Section 301 tariffs. For China, countermeasures are necessary, while engaging in communication with the U.S. similar to Canada and Mexico is also worth considering.

Cui Fan, Professor at the University of International Business and Economics (UIBE) School of International Trade and Economics, noted that the U.S. Section 301 investigation on Chinese maritime, logistics, and shipbuilding involves national security considerations, but allegations concerning China’s digital construction of national logistics platforms are unfounded and exaggerate so-called national security threats. Certain measures supporting China’s shipbuilding industry, such as export credits, were first adopted and long used by developed countries and comply with WTO rules on subsidies. Cui Fan noted that the U.S. has clear intentions to use Section 301 investigations and tariff measures as bargaining chips, protective tariffs, and fiscal tools, but the specific measures are still being explored. For instance, the recent flip-flopping on the de minimis exemption policy reflects inadequate preparation. From the perspective of China’s response, Cui Fan emphasized that China needs to further expand openness to increase international engagement, continue deepening reforms to enhance competitiveness, and, when implementing countermeasures, take into account their potential impact on Chinese enterprises.

Professor Gao Shuqiao (Henry Gao) from Singapore Management University pointed out that the revocation of the de minimis exemption would have far-reaching implications for China-U.S. trade. Beyond increasing the complexity of trade procedures, the cancellation would significantly raise actual costs for logistics companies, with these costs likely passed on to consumers. He noted that the EU is undertaking similar reforms and has proposed measures to eliminate de minimis exemptions and impose additional processing fees. These measures are WTO-compatible and may further increase trade costs, exerting greater influence on global trade. Regarding strategies in response to the tariff war, Gao observed that in the short term, U.S. tariffs on China pose disadvantages, but in the long term, this could prompt China’s policymakers to adjust strategies, accelerating the transition toward a domestic-demand-driven economic structure. By increasing the share of household disposable income in GDP, China could boost domestic demand and realize the dual circulation model. If external pressure drives internal reforms, the tariff war could yield positive long-term outcomes. From a macro perspective, Gao argued that the Trump administration’s trade policy toward China is clear and predictable, aiming to improve the U.S. trade deficit through decoupling from China and tariff hikes. In the short term, the 10% tariff is just a “starter,” with stronger measures likely to emerge after April 1, potentially leading to greater disruption and uncertainty.

Liao Shiping, Professor at Beijing Normal University School of Law, observed that communication channels between China and the U.S. have significantly narrowed since the 2019 negotiations, and existing standing mechanisms such as those in Geneva have limited effectiveness, with little substantive progress and uncertain prospects for restarting comprehensive dialogue. The Trump administration’s tariff policies on Canada and Mexico are more about leveraging than final objectives, and the actual goals of U.S. tariff measures remain to be seen. In the Phase One trade agreement, core issues for China and the U.S. were energy and agricultural procurement, while China’s retaliatory tariffs also targeted energy and agriculture. These contradictory objectives may become bargaining chips. Moreover, as major trading powers adopt retaliatory tariff measures, Geneva-based international trade institutions such as the WTO have refrained from clear statements. Such changes may indicate that the multilateral trading system is gradually moving toward a new set of rules that tolerates reciprocal retaliation.

Fu Xin, Senior Partner at Jincheng Tongda & Neal Law Firm, shared his perspectives on U.S. tariff policies targeting China. He noted that the U.S. government’s tariff approach may stem from President Trump’s personal preferences. From the perspective of a trade lawyer, the U.S. has become relatively adept at using tariff tools to pressure China. He argued that tariffs on China are unlikely to rise sharply to 60% or more, as the effectiveness of tariff tools would diminish and such increases could trigger inflationary pressures and severely affect U.S. economic security. He concluded by emphasizing the importance of upholding the rule of law, noting that predictability and security are universally valued principles and at the core of the rule of law. In the current era, legal professionals should contribute to national development, particularly in rulemaking, striving to build the greatest common ground to foster a favorable rules environment for national growth.

Jian GUAN, Co-Director of Beijing Grandwin Law Firm, expressed sincere gratitude to Professor Yang Guohua for moderating the salon and to all the speakers and guests for their support. He then offered a brief assessment of U.S. trade policy toward China. He noted, first, that while the overall trajectory of China-U.S. trade tensions remains unpredictable, China’s response to U.S. trade policy has been systematic and measured. Second, the competition between China and the U.S. will ultimately be shaped by the balance of power, and only by demonstrating strength can China bring the U.S. back to the negotiating table to resolve trade and economic issues.