Update on Section 301 Tariffs on Chinese Imports and Product Exclusion Process

UPDATE: The deadline for exclusion requests for the $16 billion list effective August 23, 2018 is December 18, 2018. More information here.

Effective July 6, 2018, the United States implemented an additional 25% ad valorem duty on $34b worth of imports from China. For a list of products covered by the 25% duty see Annex A to Notice of Action 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

Effective August 23, 2018, the United States will implement an additional 25% ad valorem duty on an additional $16b worth of imports from China. Here is a list of products covered by the 25% duty.

For tariffs effective July 6, 2018 or August 23, 2018, formal request for exclusion for product exclusions may be made, as described herein. The deadline for filing such requests is October 9, 2018 for the July 6 list and December 18 for the August 23rd list.

Proposed 10% or 25% Tariff for $200b worth of imports from China: The final list is yet to be determined but here is the proposed list.  https://www.regulations.gov/document?D=USTR-2018-0026-0001

There are two opportunities to get products off the list by: (1) commenting on the proposed list. Comments are now due by September 6, 2018 (See Extension of public comment period)
or (2) requesting a product exclusion. As described below, the deadline for filing such requests is October 9, 2018.

Product Exclusion Process

On July 6, 2018, USTR announced a process to obtain product exclusions from the additional tariffs imposed on certain products imported from China.

The exclusion process has the following important dates and features:

  • 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.
  • 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.

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. The U.S. Customs and Border Protection will apply the tariff exclusions based on the product.

There is a form for filing requests – https://www.regulations.gov/document?D=USTR-2018-0025-0002

The form asks for, among other things: a complete and detailed description of the product and the 10-digit Harmonized Tariff Schedule of the United States (HTSUS) number for the product. It also asks whether comparable products are available from sources in the U.S. and/ or third countries. It asks for the value and quantity (with units) of the Chinese-origin product of concern purchased for the past 3 calendar years. Only one product may be submitted per exclusion request.

The requester must provide a rationale for the exclusion, addressing the following points:

  • Commercial availability of the product outside of China
  • Potential harm to the requester or other U.S. interests if the exclusion is not granted
  • Whether the product is strategically important or related to Beijing’s “Made in China 2025” or other industrial programs.

Questions: You may have questions whether your product is covered at all or on the process of how to seek an exclusion from the tariffs. If so, I would be glad to assist. Please contact Evelyn Suarez at esuarez@suarezfirm.com or 202.552.0310.