The announcement of a phase one U.S.-China trade deal that included halving List 4A tariffs in place since Sept. 1 could do little to change damage done to small audio companies smacked by the previous three tranches of tariffs still in place, they said. Executives said in interviews this month have been hit hard by the duties with little hope other than to wait them out.
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.
The Office of the U.S. Trade Representative will ask for comments on whether the second set of tariff exclusions on Chinese imports on Section 301 List 1, set to expire March 25, should last another year, it said in a pre-publication notice on its website. The agency will start accepting comments on the extensions in docket number USTR-2019-0024 on Jan. 15. The comments are due by Feb. 15, it said. The USTR recently granted extensions to six exclusions, while letting 25 expire, from the first group of exclusions (see 1912190060).
The volume of Section 301 List 4A tariff exclusion requests surpassed 1,000 on Dec. 19, 49 days after the Office of the U.S. Trade Representative opened the public docket to applications at noon on Halloween. Applicants that are granted exclusions can qualify for refunds of 15 percent tariffs retroactive to Sept. 1, when the duties took effect. List 4A tariffs remain in effect at 15 percent, but are expected to be rolled back by half after the U.S.-China phase one trade deal is signed sometime in January 2020. Under USTR rules, tariff exemptions are granted on all goods imported under a product classification, not just to the company making the exclusion request. Nine applications were filed through Dec. 19 to exempt goods imported under subheading 8517.62.00.90, more than for any consumer tech product with List 4A exposure. The subheading includes a broad swath of consumer tech goods, including smart speakers, Bluetooth headphones, fitness trackers and smartwatches. Virtually all List 4A exclusion requests filed by all companies through Nov. 29 were elevated to the status of a “stage 2 initial substantive review,” the docket shows. The final “stage 4” is when an exclusion request is granted and approved for publication in the Federal Register.
The Office of the U.S. Trade Representative will grant one-year extensions to only six exclusions from the first list of Section 301 tariffs on China that were due to expire Dec. 28, it said in a pre-publication copy of a notice posted to its website. The notice is silent on the other 25 exclusions issued alongside the six that were granted extensions, so those 25 now appear set to expire on Dec. 28.
International Trade Today is providing readers with some of the top stories for Dec.9-13 in case they were missed.
With the announcement of a phase one deal, Flexport chief economist Phil Levy said the promise is for stability in tariff levels -- even if the large majority of goods facing Section 301 tariffs will retain the 25 percent hike. But, he noted in a Dec. 16 webinar, many times over the last eight months, “a deal was announced, and it didn't last. That should sort of serve as a precautionary tale.” Levy, like many observers, doesn't believe that a phase two deal, that could lead to rolling back more tariffs, is likely in the next year.
The Office of the U.S Trade Representative issued some new product exclusions from Section 301 tariffs on the third list of products from China, according to a pre-publication copy of a notice posted to the agency’s website Dec. 12 (see 1912130015). The product exclusions apply retroactively to Sept. 24, 2018, the date the tariffs on the third list took effect, and will remain in effect until Aug. 7, 2020. New subheading 9903.88.36 will be used for these products.
The Office of the U.S. Trade Representative issued a new set of product exclusions from the 25 percent Section 301 tariffs on goods from China. The exclusions include products from the third list of Section 301 goods. The new exclusions "are reflected in 9 ten-digit HTSUS subheadings and 35 specially prepared product descriptions, which cover 75 separate exclusion requests," according to the notice.
The International Trade Commission issued Revision 19 to the 2019 Harmonized Tariff Schedule. The latest update is to add the latest round of exemptions from tranche 3 Section 301 tariffs on products from China, published by the Office of the U.S. Trade Representative on Nov. 29 (see 1911260056). The exclusions are described in new U.S. Note 20(nn) to subchapter III of chapter 99, and are classifiable in new subheading 9903.88.35. The ITC also made conforming changes to other tariff schedule provisions on Section 301 tariffs. The exclusions take effect retroactive to Sept. 24, 2018, when the third tranche of tariffs first came into force.
International Trade Today is providing readers with some of the top stories for Nov. 25-29 in case they were missed.