The Coalition for a Prosperous America, a nonprofit allied with President Donald Trump's views on trade, is arguing not to extend exclusions for Section 301 tariffs because companies have had “ample time” to move their supply chains out of China. “Any bemoaning from the import lobby that relies on China should have looked to home first. There are plenty of Americans and American businesses that can fulfill their supply chain needs,” CPA Chairman Dan DiMicco and CEO Michael Stumo wrote to U.S. Trade Representative Robert Lighthizer.
Section 301 tariff exclusions
The Office of the U.S. Trade Representative has established an exclusion process for Section 301 tariffs on China. In a series of rounds since the tariffs took effect, importers have been able to request exclusions from the tariffs, as well as extensions to existing exclusions. Many exclusions have been allowed to expire, as well. Section 301 exclusions are applicable to all importers of a given good, which may be defined as an entire tariff schedule subheading or a subset of a subheading outlined in a written description.
With President-elect Joe Biden said to be reluctant to commit to changing 25% tariffs on $250 million worth of imports from China, a recent Congressional Research Service report contains suggestions that could point to a possible off-ramp. The report, released Nov. 23, says that Section 301 actions terminate automatically after four years, unless the Office of the U.S. Trade Representative receives a request for continuation, and conducts a review that determines the tariffs should continue.
The following lawsuits were filed at the Court of International Trade during the week of Nov. 16-22:
C.H. Robinson “identified potential savings for its customers of roughly $980 million related to exclusion refunds” since the first Section 301 tariffs were put in place in 2018, the company said in a recent news release. Some 96% of those are “product-specific which require a more complex, time-consuming analysis for qualification,” it said. “The U.S.-China trade war has added another layer of complexity to what has been a challenging global transportation market over the past year,” said Mike Short, president of global forwarding at C.H. Robinson. “As we have consulted with businesses of all sizes, it’s clear that the biggest barriers to duty recovery for these companies are a lack of time, data, and expertise to navigate the complex and lengthy application process.” The last of the exclusions expire Dec. 31.
The Office of the U.S. Trade Representative is making minor changes to product exclusions from Section 301 tariffs on products from China. The agency said it is amending an exclusion from List 2 tariffs for certain goods of subheading 8407.90.9010 so that it now refers to “Gas (natural or liquid propane (LP))” engines, instead of “Gasoline or liquid propane (LP)” engines. The change affects U.S. Note 20(o)(14), which provided for this exclusion for entries Aug. 23, 2018, through July 31, 2020, as well as U.S. Note 20(ggg)(4), which provides for the exclusion as extended to Dec. 31, 2020, USTR said in notices released Nov. 17. Subheading 8407.90.9010 covers “Gas (natural or LP) engines,” so the changes appear to align the exclusion with the language in the underlying tariff provision.
The following lawsuits were filed at the Court of International Trade during the week of Nov. 9-15:
While it seems clear that Joe Biden wants to “team up with our allies” to confront China, less clear is how that will work in reality, Mayer Brown international trade lawyer Tim Keeler said during a Nov. 17 Mayer Brown webinar about trade policy in the incoming administration. Keeler, who is a former chief of staff in the Office of the U.S. Trade Representative, said a majority of Congress believes the Section 301 tariffs have been a source of leverage, while the European Union thinks the tariffs violated World Trade Organization rules.
The following lawsuits were filed at the Court of International Trade during the week of Nov. 2-8:
The following lawsuits were filed at the Court of International Trade during the week of Oct. 26 - Nov. 1:
FBB Federal Relations partner Ray Bucheger told members of the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations that while the message on the Hill is discouraging on extending current Section 301 exclusions, his firm is working on legislation for the companies that received exclusions too late to get refunds for the tariffs paid.