Section 301 Tariff Exclusion Process for Chinese Products

 In business, China, exporters, Global Business, Global Economy, importers

By Cherry Chen

Are you an exporter or importer impacted by the trade war between China and the United States? Here is good news for you.

USTR announced Product Exclusion Process for Section 301 Tariffs on Chinese Goods

On July 6th, the United States officially imposed 25% tariffs on $34 billion worth of Chinese products. However, the Office of the United States Trade Representative (USTR) announced on the same day that those American companies that import from China and are impacted by the trade war will have 90 days to file a request for a one year “tariff exemption” with the United States Government. After filing the request, relevant companies will have 14 days to provide the reasons for that tariff exemption. If there are opponents, they have 7 more days to present their objections. After that, USTR will decide whether to grant an exemption or not.

Furthermore, USTR indicated that the “tariff exemption” is based on particular products. Thus, once a product is excluded, all American companies that import the product, whether they filed the request or not, will benefit from the exemption.

 Who applies for the exclusion:

US stakeholders are eligible to file a tariff exclusion request.

USTR announced that for the 818 tariff lines of Chinese goods listed under the new 25% tariff, stakeholders can apply for tariff exclusion regarding a particular product within a subheading but not for a whole subheading.

What Information to submit:

The requester should submit the following information:

  • Physical characteristics of the particular product in the filed request, so as to differentiate from other products under the same subheading
  • the 10-digit subheading of the Harmonized Tariff Schedule of the United States (HTSUS) in which the product is classified
  • How U.S. Customs and Border Protection will regulate the excluded products
  • Annual quantities and amounts of the product imported from China by the requester in the past three years

Exclusion Criteria:

Requesters should also explain the reasons for exclusion using the following three aspects or proving the product meets the exclusion standards:

  • Whether the product can only be imported from China (Is there any supply sources of the product in the U.S. or other countries?)
  • Whether the tariff imposed on this product causes severe economic damage to the requester or the United States
  • Whether the product is closely related to “Made in China 2015” or other Chinese industrial programs

Exclusion Process:

  • Product exclusion requests must be submitted by October 9th, 2018
  • For every product exclusion request, other parties will have 14 days to file responses to the request, including support or objection of it
  • For every response, the requester or other stakeholders can reply within 7 days

Exclusion Decision:

USTR will review every product exclusion request one by one and make decisions according to the three exclusion criteria. If USTR decides to exclude a product after review, the exclusion will go into effect dated back to July 6th, 2018 and will be valid for one year from the date of the exclusion announcement.

It is again worth noting that the exclusion decision is based on particular products. Therefore, decisions will not only be applicable for all imports of the product, no matter the shipper who filed the request, but also for all exports of the product.

Submission Method:

The exclusion application can be submitted via by entering docket number USTR-2018-0025-0001 in the search bar on the home page and then clicking “comment now”.

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