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Section 301 tariffs

Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.

The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions -- particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.

The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Subsequent rounds of Section 301 actions against China have continued since. The Office of the U.S. Trade Representative administers Section 301 tariffs, and has also created an exclusion process for importers to seek exemptions from the tariffs.

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Consider ‘Reallocating’ TVs to List 4B Where There’s No Tariff Exposure, TCL Urges USTR
January 27, 2020 |USTR

If TCL North America does not get the exclusions it seeks from the 15 percent List 4A Section 301 tariffs it has paid since Sept. 1 on flat-panel TV imports from China, it wants the Trump administration to weigh “reallocating” TVs to List 4B where there’s no current tariff exposure, the vendor said. TCL filed three separate exemption requests Jan. 23 at the Office of the U.S. Trade Representative public docket on tariff schedule subheadings 8528.72.64.30, 8528.72.64.40 and 8528.72.64.60, covering TV imports that vary by screen size. The “sole available source of LCD panels and supporting material components is China,” it said in all three applications.

Topics:Section 301 tariff exclusions
CBP Needs USTR Guidance for Extended Exclusions Under Now-Expired HTS Code
January 23, 2020 by Tim Warren|Top News

CBP is awaiting official guidance from the Office of the U.S. Trade Representative for how to handle goods from China that fall under the six extended Section 301 exclusions (see 1912190060), a CBP official said during a Jan. 23 conference call. While USTR extended those exclusions beyond the Dec. 28, 2019, expiration date, the Harmonized Tariff Schedule code for those exclusions, 9903.88.05, became unusable after that date. A Federal Register notice from USTR will be necessary, the official said.

Topics:Section 301 tariff exclusions
CBP Finds Mexican Pump Assembled With Chinese Motor Subject to Section 301 Duties
January 23, 2020 by Brian Feito|Top News

A pump assembly assembled in Mexico is subject to Section 301 duties, even though the electric motor that powers the pump is the only Chinese component and all of the other parts are Mexican, CBP said in a recent ruling. The assembly process in Mexico does not result in a substantial transformation of the motor, so the pump assembly remains a product of China, CBP said in HQ H303864, issued Dec. 26 and posted to the agency's CROSS database Jan. 9.

Topics:Customs duty, Court of International Trade, CBP CROSS Rulings
Tariffs Lead to 20% Reduction in Chinese Imports by Flexport Clients
January 22, 2020 by Mara Lee|Trade Business

The volume of imports from China fell about 20 percent across the fourth quarter, Flexport executives noted during a webinar Jan. 21 -- which represents both shifting to other categories of goods and re-orienting supply chains. Ryan Petersen, CEO of the freight forwarder, said 64 percent of its clients are paying additional tariffs because of the Trump administration policies.

Topics:Section 301 tariff exclusions, Customs duty, Drawback
ITC Issues Revision 1 to 2020 Tariff Schedule, Implementing Latest Section 301 Exclusions
January 22, 2020 |Other U.S.

The International Trade Commission on Jan. 21 issued Revision 1 to the 2020 Harmonized Tariff Schedule. This latest version includes updates needed to implement the latest set of exclusions from list 3 of Section 301 tariffs on products from China (see 2001020035). The new exclusions are listed in new U.S. Note 20(pp) to subchapter III of chapter 99. New subheading 9903.88.37 is created for products entering under the exclusions, and conforming changes are made to other provisions throughout subchapter III. The exclusions take retroactive effect as of Sept. 24, 2018, the date that the list 3 tariffs took effect.

Topics:Section 301 tariff exclusions
Expect More Customs Penalty, Whistleblower Cases in 2020, Law Firm Says
January 22, 2020 |Penalties and Courts

The Justice Department is adding new lawyers to its international trade office, indicating that there could be an uptick in Section 592 penalty cases against importers, according to Crowell & Moring’s 2020 Litigation Forecast. The hiring comes amid increased scrutiny on valuation and country of origin issues as Section 301 tariffs incentivize importers to find ways to reduce duty liability. “This likely means that CBP has already determined that a significant amount of penalty cases are not going to be resolved administratively and will proceed to litigation,” said David Stepp, a customs lawyer with the law firm.

Topics:Customs duty
Vaden Approved by Senate for Court of International Trade
January 21, 2020 |Trade People

Stephen Vaden, general counsel at the Department of Agriculture, was approved for the Court of International Trade in early January. Vaden, in the hearing on his nomination, said he would decide later if he should recuse himself on Section 301 cases (see 1911150010). He was involved in discussions on aid to farmers sent because of Chinese retaliation for the Section 301 tariffs.

New Section 301 Tariffs on France in Response to Digital Services Tax Averted
January 21, 2020 by Mara Lee|Top News

Tariffs on French champagne, cheeses, handbags and other products (see 2001060040) will not be coming, several news outlets are reporting, since France has agreed not to impose a Digital Services Tax in 2020 as negotiations continue at the Organization for Economic Co-Operation and Development on a fair way to impose income taxes on companies such as Google and Amazon.

Topics:Customs duty, Trump tariffs