On April 3, 2018, under Section 301 of the Trade Act of 1974 the Office of the U.S. Trade Representative (“USTR”) announced a proposed list of approximately 1,300 tariff lines subject to additional 25% tariff. These additional tariffs were as a result of an investigation into “China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property.”
After this proposed list underwent extensive public comment, on June 15, 2018, the USTR: (1) Removed 515 product lines from the initial proposed list (2): Recommended adding 284 product lines to target products that benefit from China’s industrial policies; and (3) Maintained 818 products lines from the initial proposed list unchanged.
With respect to the 818 products, the list of affected products may be found here. The 25% additional tariff will come into effect on July 6, 2018.
EXCLUSION REQUEST DEADLINE: OCTOBER 6, 2018
On August 12, 2018, the USTR finalized the second tranche of tariffs on Chinese products in response to China’s unfair trade practices. The list contains 279 of the original 284 tariff lines that were on a proposed list announced on June 15 which may be found here. The 25% additional tariff will come into effect on August 23, 2018.
EXCLUSION REQUEST DEADLINE: DECEMBER 18, 2018
On September 17, 2018, the USTR finalized a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs. The list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018.
In accordance with the direction of President Trump, the additional tariffs will be effective starting September 24, 2018, and initially will be in the amount of 10%. Starting January 1, 2019, the level of the additional tariffs will increase to 25%. The third list may be found here.
There are options for handling these additional tariffs:
1. Apply for an exclusion;
Individual companies and trade associations may submit requests for exclusions. A request can only address one product(i.e. multiple requests would be submitted for each product). The request must include the following information:
- The ten-digit subheading of the HTS applicable to the exclusion request.
- Identification of the particular product “in terms of the physical characteristics (e.g., dimensions, material composition, or other characteristics) that distinguish it from other products within the covered 8-digit subheading.”
- The “annual quantity and value of the Chinese-origin product that the requester” or trade association purchased “in each of the last three years.”
- A certification that the information submitted is complete and correct.
In addition, each exclusion request “should address” the following factors:
Whether the particular product is available only from China. In addressing this factor, requesters should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other U.S. interests.
Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
See the exclusion form here:
3. Import components for assembly in the U.S.
6. Shifting manufacture to a third country that would lead to “substantial transformation.”
7. Chapter 98 special classification in the HTSUS.
8. Valuation strategies such as assists.
*We will update this blog post based on further tariffs.