The Office of the U.S. Trade Representative is publishing its latest list of product exclusions from the first tranche of $34 billion in Section 301 tariffs on China (see 1907080008). This sixth list of exclusions includes 110 subsets of tariff numbers in chapters 84, 85 and 90. The new exclusions take effect retroactively from July 6, 2018, when the $34 billion in tariffs originally entered into force, and will remain for one year following publication of USTR’s notice. USTR is creating Harmonized Tariff Schedule subheading 9903.88.11 for the new set of exclusions.
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 issued a sixth list of product exclusions from Section 301 tariffs on goods from China. Newly exempt from the tariffs are "110 specially prepared product descriptions," the agency said. The exclusions cover 362 separate requests, according to the notice, which is scheduled for publication in the July 9 Federal Register. The product exclusions apply retroactively to July 6, 2018, the date the first set of tariffs took effect, and will remain in effect until one year after the notice is published.
2019 is shaping up to be another active year in terms of changes to the Harmonized Tariff Schedule. Like last year, a series of revisions were necessary in the first half of the year to implement Section 301 exemptions and an increase for $200 billion worth of the China tariffs from 10 percent to 25 percent. Other major changes are related to the Generalized System of Preferences, and in particular the removal of India and Turkey from the program. In all, seven revisions were issued prior to the mid-year Revision 8, as follows:
The rapid changes in trade policy have elevated the need for adroit trade compliance management at international companies that hadn't previously been so concerned with customs duties, said two compliance professionals who spoke at the American Association of Exporters and Importers Annual Conference in Washington on June 28. "It's been an overall breaking down walls of communication" among the various groups at the company who "historically" didn't interact very often, said Antoinette Montoya, corporate export-import compliance manager at Bechtel Corporation. Now, though, "we've had a lot of really good strategic relationships built out of this," she said. Whatever happens with subsequent administrations, those relationships will "really help us in the long run," Montoya said.
International Trade Today is providing readers with some of the top stories for June 24-28 in case they were missed.
CBP's Office of Regulations and Rulings is facing a massive increase in ruling requests involving products from China, in addition to its need to weigh in on exclusion requests, CBP Assistant Commissioner Brenda Smith said June 28 at the American Association of Exporters and Importers Annual Conference in Washington. The trade remedy exclusion requests are reviewed by OR&R "because of the tariff classification inherent in the application and then in the final determination," she said. Exclusion requests for the Section 232 tariffs on steel and aluminum are now at about 80,000, well above the 10,000 that were expected when first announced, she said. That's not counting the exclusion request processes now available for the first three tranches of Section 301 tariffs on goods from China, she said.
International Trade Today is providing readers with some of the top stories for June 17-21 in case they were missed.
The Office of the U.S. Trade Representative will begin accepting exclusion requests for the third tranche of Section 301 tariffs through a new portal on June 30 at noon, the agency said in a notice. The exclusion requests will be due through the portal at exclusions.ustr.gov/ by Sept. 30, with responses due 14 days after the request is posted on the portal, USTR said. Exclusions will be effective going back to Sept. 24, 2018, when the tariffs on $200 billion in goods from China were implemented with a 10 percent tariff.
The Office of the U.S. Trade Representative will not automatically renew Section 301 product exclusions, USTR Robert Lighthizer told Rep. Jackie Walorksi during the June 19 House Ways and Means Committee hearing on the administration's trade policy. But Lighthizer told a California Democrat that his office is hiring employers and contractors and borrowing "a bunch of people" from other agencies to work on the flood of product exclusion requests that's expected.
U.S. Trade Representative Robert Lighthizer faced criticism about President Donald Trump's China policy, which both Democrats and Republicans noted is hurting U.S. businesses and, if tariffs come on List 4, will dearly cost U.S. consumers. Lighthizer, who was testifying June 18 at the Senate Finance Committee about the administration's trade policy, said there's been no decision on whether there will be tariffs on another $300 billion in Chinese imports. "The president will make that decision in the next few weeks," he said, and if tariffs are levied, there will be an exclusion process. "We think we have been fair in granting exclusions," he said.