Section 301 additional duties currently apply to certain product of Chinese origin due to China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation, which threaten the long-term competitiveness of the U.S.
Please see Customs and Border Protection’s (CBP’s) Section 301 HTSUS Reference Guide for a list of affected tariffs.
There are currently three lists of products subject to additional duties, with a fourth list being considered. Additional duty rates of 25 percent apply to List One and List Two products. List Three products have a 10 percent duty rate through March 1, 2019.
President Trump met with the Chinese President while attending the G20 Summit November 30 through December 1, 2018, where he agreed to delay the duty increase for List Three products for 90 days, while negotiations with China continue. Should agreement not be reached, the rates will increase on March 2, 2019.
The meeting also resulted in a hold on List Four products.
On December 28, 2018, the U.S. Trade Representative (USTR) granted the first round of Section 301 product exclusions. It included nearly 1,000 product exclusion requests for List One Products. Additional decisions of product exclusion requests are to be announced periodically. Approved exclusions will apply for product entering the U.S. on or after July 6, 2018, through December 27, 2019.
A new Harmonized Tariff Schedule (HTS) number of 9903.88.05 was created for excluded products, but due to the Federal Government furlough CBP has not programmed the Automated Commercial Environment (ACE) for use of this HTS.
CBP expects to have programming completed within ten business days after the furlough ends. Once CBP issues guidance and implements ACE enhancements, a Post Summary Correction (PSC) or a Protest may be submitted for a refund.
All importers, not just those who applied for the exclusion, will be able to take advantage of these exclusions.
Exclusions will apply to all product entered in the below HTS:
- 8412.21.0075
- 8418.69.0120
- 8480.71.8045
- 8482.10.5044
- 8482.10.5048
- 8482.10.5052
- 8525.60.1010
Additional exclusions for 24 specified products, found in 14 HTS, may be reviewed in the Annex to USTR notice.
The USTR had not yet announced any granted exclusion requests for Section 301 List Two products, which took effect on August 23, 2018. More than 2,500 exclusion requests have been submitted.
Currently, there is no exclusion request process for List 3. One will be initiated only if negotiations fail with China and the President raises the tariff from 10 percent to 25 percent (scheduled for March 2, 2019). Also, there is no basis available for exempting U.S. importers who use Foreign Trade Zones (FTZs) from the Section 301 additional duties since the trade remedy applies to all other U.S. importers.
Note: The USTR began furloughs at the close of business on January 11, 2019.
If you have any questions regarding the status of the Section 301 exclusions, Livingston can help! Please contact either your Livingston account manager or our regulatory affairs group at usregaffairs@livingstonintl.com