U.S. Section 301 Tariffs

Exclusion Requests for LIST 3 Products are due to the USTR by September 30, 2019.

If your company imports items on LIST 3, then be aware that exclusion requests may be filed. Importers who wish to file should contact a law firm with experience in these filings and should immediately begin preparations to file.

To schedule an appointment, please contact our offices at Info@TradeLawCounsel.com

USTR's LIST 3

July 11, 2018, the USTR released the third list of 6,000+ tariff lines in response to China's continued retaliation.  LIST 3 is estimated to represent $200 billion in inbound China-U.S. trade.  Whereas lists 1 and 2 provided for 25% tariffs, LIST 3 began on September 24, 2018 at a rate of 10%.

At the time, USTR stated that no procedure for companies to seek exclusions would be opened until the tariffs were increased to 25%.

After the failed U.S.-China trade negotiations in May 2019, the LIST 3 rate was increased to 25% (effective as to goods entering after May 10) and the USTR moved to open the exclusions application portal on June 30, 2019. The portal will remain open until September 30, 2019.

Full background on the Section 301 proceedings can be found here:

CRITERIA SUPPORTING AN EXCLUSION:

With regard to the rationale for the requested exclusion, each requester will be asked to address the following:

1.     Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.

The requester must provide an explanation if the product is not available outside of China or the requester is not sure of the product availability.

2.     Whether the requester has attempted to source the product from the United States or third countries.

3.     Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requester or other U.S. interests.

4.     Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

In addressing each of these factors, the requester should provide support for their assertions. We believe that this is an area where working closely with an attorney can be invaluable. We have assisted clients with supporting affidavits, and other materials designed to address these factors. We have been fortunate enough to have secured product exclusions for clients in prior list exclusion proceedings.

OTHER BASIC APPLICATION INFORMATION

With regard to product identification, any request for exclusion from LIST 3 will be required to include the following information:

  • The 10-digit subheading of the HTSUS applicable to the particular product requested for exclusion.

If no 10-digit subheading is available (i.e. the 8-digit subheading does not contain breakouts at the 10-digit level), requesters should use the 8-digit subheading and 5 add “00”.  Different models classified under different 8-digit or 10-digit subheadings are considered different products and require separate exclusion requests.

  • Product name and a detailed description of the product.

A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.). Requesters may submit a range of comparable goods within the product definition set out in an exclusion request.  Thus, a product request may include two or more goods with similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.

  • The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading.

Requesters may submit attachments that help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a requester’s product description must be made available for public inspection and contain no business confidential information.

USTR will not consider requests that identify the product using criteria that cannot be made available for public inspection.  Requesters must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the requester purchased, in 2017, 2018, and the first quarter of 2019.

  • Financial Information

·       Requesters must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019. 

·       For imports sold as final products, requesters must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product accounted for.

·       For imports used in the production of final products, requesters must provide the percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for. Information regarding the requester’s purchases and gross sales and revenue is business confidential information and the information entered will not be made publicly available.

J&N Logo gold center 2017.jpg

Our customs lawyers are known nationally and internationally for their work in customs and international trade law. 

The firm's offices are located in San Francisco, California, Seattle, Washington, and Los Angeles, California.

Our practice areas include classification, valuation, admissibility, customs detentions, seizures and penalty proceedings, and customs audits.  We bring litigation, and handle numerous other types of issues arising in international trade. See our services listings.

Curated News on Section 301 Issues:

June 30: USTR: LIST 3 Exclusions Portal opens.

June 21, 2019: NRF testimony at the USTR re: LIST 4.

June 19, 2019: USTR: FAQ states the USTR "will issue guidance -- in advance of the date of the expiration of exclusions -- on whether renewals are possible."

June 12, 2019: Members of Congress suggest USTR should allow extensions on 301 exclusions already granted in LIST 1.

June 6, 2019: CBP: CSMS# 19-000289: Fifth Round of Products Excluded from Section 301 Duties (Tranche 1)

May 22, 2019: CSMS #19-000260: Section 301 Products Excluded from Duties - Liquidation Extension Request.

May 9 & 10, 2019: CBP: CSMS instructions for LIST 3 declarations given increase to 25%.

May 9: USTR: 3rd round of product exclusions.

May 8, 2019: USTR: LIST 3 increase announcement.

May 6, 2019: POTUS: Failed trade negotiations. LIST 3 to increase to 25%. LIST 4 to be readied at 25%.

May 4, 2019: USTR: LIST 3 exclusions process to open.