U.S. Customs and Border Protection (CBP) announced that the additional Section 301 List 3 duties on subject products, which were due to increase from 10 percent to 25 percent on March 2, 2019, has been postponed indefinitely. Duties will remain at 10 percent while negotiations with China continue.
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.
List 3 duties were first effective on September 24, 2018, and currently, there is no exclusion request process. However, the Joint Explanatory Statement (JES) included by Congress with the budget bill enacted on February 15th to avoid another partial government shutdown requires the creation of an exclusion process for Section 301, List 3.
By March 17th, the U.S. Trade Representative is supposed to report status back to the House Ways and Means Committee and the Senate Finance Committee. Companies with List 3 exposure should be prepared to take advantage of this. It is expected to follow the same procedure as the List 1 and List 2 exclusion request processes.
Bear in mind, the JES indicates the Congressional intent, however, it is not binding. So, as long as the List 3 rate remains at 10%, the Administration may argue that an exclusion process is not necessary.
If you have any questions regarding the status of the Section 301 List 3 additional duties, Livingston can help! Please contact either your Livingston account manager or our regulatory affairs group at usregaffairs@livingstonintl.com