What Changed
Effective February 14, 2020The US-China Phase One trade deal, signed January 15, 2020 and effective February 14, 2020, reduced the Section 301 List 4A tariff rate from 15% to 7.5% in exchange for Chinese commitments on intellectual property, financial services, and agricultural purchases. List 4A covered approximately $120 billion in Chinese goods including consumer products, apparel, footwear, and electronics accessories. The 7.5% rate for List 4A goods remains the current rate today.
Rate Changes
| Item | Before | After |
|---|---|---|
| S301 List 4A Chinese goods ($120B) | 15% S301 | 7.5% S301 (Phase One deal) |
Who's Affected
US importers of Chinese consumer goods covered under Section 301 List 4A — primarily apparel, footwear, electronics accessories, and household goods. The Phase One reduction provided meaningful tariff relief for businesses in these categories, reducing the rate by 7.5 percentage points from the peak 15% rate imposed in September 2019.
Analysis
Phase One Trade Deal Reduces Section 301 List 4A from 15% to 7.5% (effective 2020-02-14). The US-China Phase One trade deal, signed January 15, 2020 and effective February 14, 2020, reduced the Section 301 List 4A tariff rate from 15% to 7. Section 301 of the Trade Act of 1974 authorizes the USTR to investigate and respond to unfair trade practices by foreign governments, including subsidies and discriminatory policies that harm US commerce. The ongoing Section 301 action against China was initiated in 2018 and covers tens of billions of dollars in Chinese imports across four product lists. A four-year statutory review conducted in 2024 resulted in targeted increases on strategic sectors — electric vehicles, solar cells, batteries, semiconductors, and critical minerals — reflecting bipartisan consensus on the need to protect US competitiveness in clean energy and technology. Section 301 tariffs stack on top of the base MFN rate and, for certain products, on top of the Section 122 surcharge as well, creating compound tariff rates that can exceed 100% for some Chinese goods. The 2024 review confirmed that existing tariffs on Chinese goods will remain in force, providing businesses with certainty that Section 301 rates are not a temporary measure. USTR's approach of using "replacement rates" — where the 2024 increases replace the base list rates rather than stacking on top of them — is critical to understand when calculating effective tariff costs. For example, Chinese EVs face a 100% Section 301 rate that replaces the prior 25% rate; they do not face 125%.
Impact & Next Steps
Importers of Chinese goods should verify the specific List (1, 2, 3, or 4A) that applies to their HTS codes, as rates vary by list. The 2024 review replacement rates (EVs at 100%, solar at 50%) apply as final rates, not as additions to prior rates. Country-of-origin rules apply: products substantially transformed in China are subject to S301 even if shipped from a third country. Consider supply chain diversification for strategic categories to reduce S301 exposure.