Published to the Federal Register on March 5, 2019, the President directed the U.S. Trade Representative (USTR) to modify the action taken in Section 301 investigations by
“postponing the date on which the rate of the additional duties will increase to 25 percent for the products of China covered by the September 2018 Action in this investigation. The rate of additional duty for the products covered by the September 2018 action will remain at 10 percent until further notice.
The notice went on to explain that the duty is still applicable at 10 percent with respect to the original trade action, but perhaps this signals a light at the end of the tunnel for international shippers that have been paying increased duties on $200 billion worth of imports from China since last year.
“In light of progress of the additional rounds of negotiations since December 2018, and at the direction of the President, the Trade Representative has determined that it no longer is appropriate for the rate of duty under the September 2018 action to increase to 25 percent on March 2, 2019, and that the rate of duty under the September 2018 action will remain at 10 percent until further notice.”
Congress has also instructed the Office of the U.S. Trade Representative to establish an exclusion filing process for List 3 “following the same procedures as those in rounds 1 and 2.”
Due by March 17, shippers with products on List 3 should be prepared to submit a petition form demonstrating:
- there is no production of the product in the United States;
- there is no alternative producer outside of China; and/or
- the product is required for national security.
U.S. companies will be able to apply for a refund for duties paid on any List 3 goods granted an exclusion, applicable retroactively. Under Section 301, all importers may take advantage of posted exemptions, not just the filing parties.
To date, there have been over 4,500 Section 301 exclusion requests denied by the USTR. With only 21 tariff lines granted exclusion, importers may also want to address the lack of appeals process for exclusion denials for all three tariff action lists, which must be granted by Congress.
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