USITC Launches Parallel § 332 Investigations Targeting China Trade Relations and Biotechnology Support

The US International Trade Commission has initiated two significant Section 332(b) investigations that could shape the next phase of the United States’ China trade policy: one examining the economic effects of revoking China’s permanent normal trade relations status and one reviewing China’s state support and pricing practices in the biotechnology sector. The investigations will provide a detailed analytical record that Congress and the administration can draw on as they consider further tariff and industrial policy measures targeting China.

With these investigations likely to generate reports that may be utilized in shaping executive policy and future legislative debates, interested companies and stakeholders should strongly consider submissions to the ITC.

THE ITC AND SECTION 332 INVESTIGATIONS

The US International Trade Commission (ITC or the Commission) is an independent, nonpartisan agency charged with providing trade remedy adjudication and trade policy advice to the US Congress and executive branch.

In addition to its quasijudicial work concerning protection of intellectual property in imported merchandise under Section 337 of the Tariff Act of 1930 and its responsibility for maintaining the Harmonized Tariff Schedule of the United States (HTSUS), the Commission conducts wide‑ranging investigations under Section 332 of the Tariff Act of 1930.

Section 332 investigations are general fact‑finding inquiries that do not themselves change tariff rates, impose trade remedies, or create direct legal obligations for companies. They are typically initiated at the request of the president, the US Trade Representative, or key congressional committees such as Senate Finance or House Ways and Means, and the Commission may also self‑initiate inquiries.

These investigations often involve market analysis and provide historical context and prospective economic impact assessments related to tariffs, trade, and competitiveness, but do not contain formal policy recommendations or impose enforceable measures. Instead, they create an authoritative evidentiary record that the executive and legislative branches often rely on when designing new tariffs, crafting industrial policy, or defending trade actions in domestic and international forums.

In recent years, the ITC’s Section 332 docket has become a central platform for building the factual foundation underlying high‑profile trade policy decisions, especially where those decisions involve China and national security considerations. The permanent normal trade relations (PNTR) status and biotechnology inquiries join a growing list of Section 332 investigations that focus on China or strategically sensitive sectors.

Recent or ongoing examples include:

• Investigations examining state support and pricing practices by Chinese firms in other advanced technology sectors, including clean energy and advanced manufacturing
• General fact‑finding studies on the economic effects of significant US trade measures, such as prior waves of Section 232 and 301 tariffs
• Sector‑specific inquiries into supply chain resilience, critical minerals, and advanced electronics, which have fed into broader decoupling and de‑risking strategies

Section 332 investigations have also informed actions taken under Section 232 of the Trade Expansion Act of 1962 (national security investigations resulting in trade remedies, including quotas and tariffs), Section 301 of the Trade Act of 1974 (investigations into unfair trade practices resulting in trade remedies, including tariffs), and targeted sectoral measures, particularly in areas seen as strategically sensitive such as semiconductors, EVs, and advanced manufacturing.

The Trump administration’s ongoing second‑term tariff agenda explicitly contemplates using analytical work, including Section 332 studies, to frame future waves of tariffs and defend them domestically and at the World Trade Organization. The two new China‑focused investigations thus should be viewed in this broader context.

INV. NO. 332-609: EFFECTS OF REVOKING CHINA’S PNTR STATUS

The first investigation, Effects on the U.S. Economy of Revoking China’s Permanent Normal Trade Relations Status (Inv. No. 332‑609), was requested through report language accompanying legislation passed earlier this year, the Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act, 2026.

The House Appropriations Committee directed the Commission to examine the impact of revoking PNTR treatment for all products of China on the US economy, US industry, and product sourcing over a six‑year period.

In particular, Congress has asked the ITC to provide detailed information on:

• US trade, production, and prices in industries that would be directly and most affected if Chinese-origin products were subject to Column 2 duty rates under the HTSUS rather than Column 1 most‑favored‑nation (MFN) rates
• An alternative scenario in which Congress revokes PNTR status but phases in higher tariffs over five years on a subset of “national security” products, rather than across all imports

Countries with status as MFN or Normal Trade Relations (NTR)—most US trading partners—face Column 1 duty rates, while non‑NTR countries (currently including Russia, Belarus, Cuba, and North Korea) face substantially higher Column 2 rates.The PNTR inquiry thus squarely addresses whether China could be moved into the same tariff category as these non‑NTR countries in line with policy concepts highlighted in the Trump administration’s broader second‑term tariff agenda and related congressional proposals.

The ITC has announced an accelerated schedule for Inv. No. 332‑609, with written public comments due by April 13, 2026 and publication of the ITC’s final report by August 21, 2026. This abbreviated process—which omits a typical public hearing due to the compressed timetable—contrasts with prior Section 332 investigations and reflects congressional pressure and the administration’s interest in having an analytic basis for potential PNTR‑related legislation and follow‑on tariff actions in 2026 and 2027.

For companies and other interested stakeholders, the absence of a hearing heightens the importance of promptly preparing detailed written submissions and data‑driven analysis to aid the ITC in creating its report.

INV. NO. 322-610: CHINA BIOTECHNOLOGY SUPPORT AND PRICING

In a separate but coordinated step, the Commission has self‑instituted Inv. No. 332‑610, Impact on U.S. Industry of China’s State Support and Pricing Practices in the Biotechnology Sector, following guidance in the Senate Appropriations Committee report accompanying the same FY 2026 appropriations bill.

This investigation will review the extent to which Chinese state support and pricing practices in biotechnology, specifically genomic sequencing, synthetic biology, and active pharmaceutical ingredient (API) manufacturing, are affecting US market share and competitiveness in the biotech space.

The Senate report directs the Commission to:

• Provide detailed information, to the extent practicable, on subsidization levels and market overcapacity among Chinese biotechnology firms and the resulting impacts on US producers
• Examine how Chinese state support and pricing practices are affecting US competitiveness in biotechnology products and services
• Transmit a report to the House and Senate Appropriations Committees within 12 months of enactment of the appropriations act

This biotechnology inquiry aligns with a broader policy pivot toward supply chain security and “de‑risking” in life sciences and health‑related technologies, themes that have already featured prominently in recent Section 232 and 301 actions and bilateral negotiations with US trading partners as part of the administration’s second‑term tariff and industrial policy agenda.

Unlike the PNTR investigation, Inv. No. 332‑610 follows a more traditional Section 332 schedule, with both a public hearing and an extended written submission period. The deadline to request to appear at the hearing is May 11, 2026, the deadline for filing prehearing briefs and statements is May 14, 2026, and the public hearing before the Commission is scheduled for May 27-28, 2026. Stakeholders can also make other written submissions through July 17, 2026 and the ITC’s report is due by January 22, 2027.

PRACTICAL IMPACTS

The Commission’s reports are likely to be highly anticipated and closely scrutinized. A finding revoking PNTR status for China would significantly affect pricing, sourcing patterns, and US production in particular industries and will likely be cited in future debates on comprehensive China tariff legislation and narrower product‑specific measures.

Similarly, a detailed record of Chinese subsidization and overcapacity in biotechnology could support further industry-related tariffs, targeted procurement or investment restrictions, or new sectoral controls analogous to those already discussed in earlier work on the administration’s industrial and trade strategy.

For companies importing from China or sourcing inputs indirectly from Chinese suppliers, the PNTR investigation in particular raises the prospect (however uncertain in timing and scope) of a structural upward reset in baseline tariff rates. Even before any statutory change, the investigation itself may catalyze additional congressional proposals and provide an analytical reference point for incremental measures, such as phased increases on national security–related products or sector‑specific surtaxes layered on top of existing Section 232 and 301 duties.

Key potential direct impacts include:

• Products that today are subject only to Column 1 MFN rates (possibly already layered with Section 232 and 301 duties) could face Column 2 statutory rates, which are substantially higher for many tariff lines
• Companies may accelerate efforts to relocate production or sourcing outside China in anticipation of higher baseline tariffs, especially in capital‑intensive sectors where the payback period for relocation is long
• Long‑term supply contracts, transfer pricing arrangements, and customer pricing mechanisms may need to account for a PNTR‑revocation scenario, including the risk of retroactive or staged implementation
• While not directly addressed in the investigation, foreign policy stakeholders will be focused on potential Chinese countermeasures, which could affect US exports and operations in China

Because Section 332 investigations are fact-finding in nature, the Commission’s report will not itself impose any of these consequences, but its projections and industry‑specific analysis will provide a focal point for policy debates in Congress and within the executive branch.

As for the biotechnology investigation, companies and stakeholders in genomic sequencing, synthetic biology, and API manufacturing face a different but related set of implications as the investigation is expected to:

• Document levels of Chinese state support and pricing practices, including subsidies and other forms of industrial policy support
• Analyze the impact on US market share, pricing, and competitiveness, including evidence of overcapacity and displacement of US production
• Identify segments where Chinese firms have become dominant suppliers in global or US markets, including in sensitive health and security supply chains

This record is likely to be used to justify further US government measures targeting Chinese biotechnology firms, such as procurement restrictions, investment screening enhancements, outbound investment controls, and tailored tariff or nontariff barriers. It may also be referenced in future Section 337 complaints, export control expansions, or sanctions designations by highlighting particular entities or subsectors that benefit from state support and create national security or human rights concerns.

For US and allied‑country biotechnology companies, the investigation offers an opportunity to shape the narrative on competitive harm, supply chain resilience, and the potential benefits and costs of more aggressive remedial measures.

OPPORTUNITIES FOR PARTICIPATION AND RESPONSES

Because there will be no hearing in the PNTR status investigation, stakeholder engagement will occur entirely through written comments before the April 13 deadline. Companies, industry associations, and other interested stakeholders may wish to:

• Quantify tariff exposure under a PNTR‑revocation scenario at the tariff‑line level, including projected effects on landed costs, margins, and consumer prices
• Provide data and case studies on sourcing alternatives, including feasibility and timeframes for shifting production to third‑country sites
• Address the national security “subset” scenario by identifying products where higher tariffs would meaningfully affect Chinese capabilities versus those where costs would largely fall on US consumers or downstream manufacturers
• Highlight potential retaliation channels and macroeconomic impacts, while staying within the fact‑focused scope of Section 332

Given the likely use of the report in future legislative debates or at the executive branch, companies may want to coordinate submissions through industry associations or multicompany coalitions to ensure consistent messaging.

On the other hand, the biotechnology Section 332 investigation allows for more extensive engagement through both written and oral testimony. Companies, research institutions, and industry groups can:

• Determine whether to request to appear at the May 27-28 hearing with submission of any request to appear by May 11, 2026 and submission of prehearing briefs that include relevant, detailed factual and economic evidence by May 14
• In written submissions and/or hearing testimony, highlight specific harms, including below‑cost pricing, loss of market share, forced technology transfers, or challenges accessing Chinese markets
• File posthearing briefs by June 11, 2026 addressing issues raised at the hearing and responding to questions from Commissioners
• Submit additional written materials and data by July 17, 2026, including nonduplicative information supporting particular policy-relevant findings