Section 301 Tariffs for Certain Chinese Products

Covered Products

  • On June 20, 2018, the Office of the U.S. Trade Representative (USTR) released a list of products imported from China that will be subject to additional tariffs in the amount of 25 percent. See June 20, 2018 Federal Register notice (83 Fed. Reg. 28710) – https://ustr.gov/sites/default/files/2018-13248.pdf

The duties are being imposed in response to China’s unfair trade practices related to forced transfer of American technology and intellectual property.

Effective Date

  • For the approximately $34 billion worth of imports from China, the additional duty of 25 percent will be collected by Customs and Border Protection (CBP) with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Standard Time on July 6, 2018.
  • A second set of Chinese imports, valued at approximately $16 billion, were proposed by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including “Made in China 2025.” This list of products will undergo further review in a public notice and comment process, including a public hearing to take place July 24, 2018. At the end of the process, USTR will issue a final determination on the products from this list that would be subject to the additional duties. The effective date is yet to be determined for this second set.

Foreign Trade Zones (FTZ)

  • Listed products, except those products eligible for admissionunder “domestic status” as defined in 19 CFR 146.43, which is subject to the additional duty, and that is admitted into a U.S. foreign trade zone on or after 12:01 am eastern daylight time on July 6, 2018, only may be admitted as “privileged foreign status,” as defined in 19 CFR 146.41. That means the products will be assessed duty based upon the condition when the goods are brought into the FTZ. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.

Product Exclusion Process

  • Administered by the Office of the U.S. Trade Representative
  • Can provide exclusion from the 25 per cent ad valorem duty for a particular product within a tariff subheading but not the tariff subheading as a whole
  • The public will have 90 days to file a request for a product exclusion; the request period will end on October 9, 2018.
  • Following public posting of the filed request on Regulations.gov, the public will have 14 days to file responses to the request for product exclusion.  After the close of the 14-day response period, interested persons will have an additional 7 days to reply to any responses received in support of or opposition to the request.
  • Because exclusions will be made on a product basis, a particular exclusion will apply to all imports of the product, regardless of whether the importer filed a request. CBP will apply the tariff exclusions based on the product.
  • Exclusions will be effective for one year upon the publication of the exclusion determination in the Federal Register, and will apply retroactively to July 6, 2018.

How to file Request?

  • Via regulations.gov, enter document ID number USTR2018-0025-0001 on the home page and click “search.” The site will provide a search results page listing the Federal Register Notice associated with this docket. Find a reference to this notice and click on the link titled “comment now!”. Once posted on the electronic docket, the exclusion request will be viewable in the “Primary Documents” section.

Chinese Retaliation

  • China has retaliated to the U.S. tariffs by imposing tariffs for $50 billion of U.S. goods to be implemented in two phases. Effective July 6, 2018, China has imposed a 25 per cent ad valorem duty on $34 billion of U.S. products across 545 categories. Agricultural products (especially soybeans), sport utility vehicles and electric vehicles are among the products hit.

Resources:

Questions: Should you have any questions, please contact Evelyn Suarez at esuarez@suarezfirm.com or 202.552.0310.

Section 301 Tariff List

Summary: In response to an investigation surrounding China’s failure to protect intellectual property and forced technology transfers, the Office of the United States Trade Representative (USTR) announced on April 3, 2018, its list of products for imposition of a proposed 25 percent ad valorem duty. The list, covering 1,300 tariff lines, is intended to be applied to about $50 billion worth of Chinese goods said to benefit from Beijing’s “made in China 2025” industrial policy. The list, which is provided in the Notice of Determination and Request for Public Comment in Resource # 1 below, covers a broad range of products including semiconductors, engines, agricultural and textile machinery, batteries, tires, “industrial robots,” medical products and instruments used in aeronautical and space navigation.

China’s cabinet, the State Council, immediately announced that China will retaliate with tariffs covering 105 categories of products affecting $50 billion of Chinese imports of U.S. products to match the U.S. proposal. Beijing has targeted the largest American exports – including sorghum and beef – but has also targeted products in the U.S. Farm Belt as well as autos and airplanes.

Neither the U.S. nor Chinese tariffs take effect immediately. Chinese officials said that they are watching how the U.S. implements its program.

Comments and Opportunity to be heard:  USTR has announced that public comments on the recommended tariffs are due May 11. The Section 301 Committee will hold a public hearing on May 15. Post-hearing comments are due May 22.

If you import a product on the list, you may wish to submit comments and/ or even testify at a public hearing.  Even if you are indirectly affected by the tariffs, you may wish to comment or testify. The tariffs could make equipment and inputs that you rely upon more expensive.

Resources:

  1. Notice of Determination and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation – https://www.wsj.com/public/resources/documents/USTRlistofproducts04032018.pdf
  2. S. Trade Representative Report “Findings of the Investigation Into China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974 – https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF
  3. Section 301 Fact Sheet – https://ustr.gov/sites/default/files/USTR%20301%20Fact%20Sheet.pdf

Questions: Please contact Evelyn Suarez at esuarez@suarezfirm.com or 202.552.0310 if you have questions regarding coverage or need assistance in submitting comments or wish to testify.

Steel Exclusion Requests

Steel
Who can file?
Only individuals or organizations operating in the United States that use steel products (e.g., flat, long, semi-finished, pipe and tube, and stainless) in business activities (e.g., construction, manufacturing, supplying steel products to users) in the United States may submit an Exclusion Request.

Reasons for exclusions:

  1. Product is not produced in the United States in;
    1. a sufficient and reasonably available amount or
    2. a satisfactory quality
  2. Product needed to support a specific U.S. national security requirement (e.g, critical infrastructure or national defense systems)

Requirements: must contain information on

  1. Single type of steel product it requires using a 10-digit HTSUS code, including its specific dimension. A separate Exclusion request must be submitted on each distinct type and dimension of steel product to be imported.
  2. The quantity of product requirement (stated in kilograms) under a one-year exclusion
  3. A full description of the properties of the steel product it seeks to import, including chemical composition, dimensions, strength, toughness, ductility, magnetic permeability, surface finish, coatings, and other relevant data

Reasons for rejection

  1. Does not sufficiently address the specified reporting requirements
  2. Cites the improper HTSUS code
  3. Provides incorrect product descriptions

Where filed: Upload request to www.regulations.gov under Docket Number BIS-2018-0006

When:  Any time

Processing time: Approximately 90 days

Notifications: Posted on www.regulations.gov

For further information contact: steel232@bis.doc.gov or by phone at 202.482.5642

Questions: Given the fluid situation as to coverage and exclusions, you may have questions regarding the announced steel and aluminum tariffs.  Should you have any questions, please contact Evelyn Suarez at esuarez@suarezfirm.com or 202.552.0310.

For the full post on the steel and aluminum tariffs, please see:

Steel and Aluminum Tariffs

Steel and Aluminum Tariffs

UPDATED APRIL 8, 2018

Steel and Aluminum Tariffs
Interim Final Rule
Setting forth Requirements for Requests for Exclusions And Objections thereto

In two separate Presidential Proclamations dated March 8, 2018, President Trump fulfilled his promise to impose tariffs on imports of steel and aluminum (imports from Canada and Mexico were temporarily exempted pending the NAFTA negotiations).  On March 22, 2018, President Trump signed two additional Presidential Proclamations temporarily exempting until May 1, 2018 certain countries (i.e., Canada, Mexico, Australia, Argentina, South Korea, Brazil and European Union member countries). On March 23, 2018, South Korea and the U.S. agreed in principle to a number of changes to the Korea-U.S. Free Trade Agreement (KORUS), including an agreement by South Korea to a product-specific quota equivalent to 70% of its average annual steel export volume to the U.S. from 2015 through 2017.

Thus, a 25% ad valorem duty will apply to covered imports of steel and a 10% ad valorem duty will apply to covered imports of aluminum from non-exempted countries. Tariffs will apply with respect to (a) non-exempted goods entered or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern daylight time on March 23, 2018, and (b) all goods on or after 12:01 a.m. eastern daylight time on May 1, 2018. Adjustments to tariffs might be made to non-exempt countries as countries are exempted on a long-term basis

Steel train tracks

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