On July 6, 2018,1 the United States Trade Representative ("USTR") announced the procedures for filing and obtaining product exclusions from the recently announced Section 301 tariffs on the imports of $34 billion worth of Chinese goods.2 Exclusion requests are due by October 9, 2018.3 After an exclusion request is posted on regulations.gov,4 parties will have 14 days to respond to the request, indicating support or opposition to the exclusion request. After this 14-day period, parties will have seven days to reply to these responses. At the close of this period, the USTR will then determine whether or not to approve the exclusion request.
Exclusion requests will be reviewed on a case-by-case basis. Any exclusions that are granted will be effective for one year. Additionally, these exclusions will apply retroactively to July 6, 2018, the date the Section 301 tariffs took effect.
Any requests for an exclusion must include:
- Identification of the particular product in terms of physical characteristics that distinguish it from other products within the covered 8-digit Harmonized Tariff Schedule ("HTS") subheading;
- The 10-digit subheading of the HTS code applicable to the product requested for exclusion;
- Information on the ability of U.S. Customs and Border Protection to administer the exclusion; and
- The annual quantity and value of the Chinese-origin product that the requester has purchased in the last three years.
In describing why a particular product should be granted an exclusion, the exclusion request should address factors including:
- Whether the particular product is available only from China;
- Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other U.S. interests; and
- Whether the particular product is strategically important or related to "Made in China 2025" or other Chinese industrial programs.
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.
Since interested parties only have 90 days to submit a product exclusion request, parties who want to file an exclusion should move quickly. Torres Law continues to monitor all tariff related developments and is happy to assist with any exclusion requests.
Footnotes
Office of the United States Trade Representative, Procedures to Consider Requests for Exclusion of Particular Products from the Determination of Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, https://ustr.gov/sites/default/files/enforcement/301Investigations/FRN%20exclusion%20process.pdf (last visited July 6, 2018).
2 For more information on the Section 301 tariffs, please review Torres Law's previously published article, available here: http://www.torrestradelaw.com/posts/Tariffs%3A-The-Never-Ending-Saga/150.
3 Office of the United States Trade Representative, USTR Releases Product Exclusion Process for Chinese Products Subject to Section 301 Tariffs, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/ustr-releases-product-exclusion (last visited July 6, 2018).
4 All exclusion requests, responses, and replies to responses should be submitted at www.regulations.gov. The relevant docket number is USTR-2018-0025.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.