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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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New 25 Percent Tariff on Goods From China Takes Effect for Entries on or After 12:01 a.m. July 6
July 5, 2018 |Top News

CBP will begin to apply a 25 percent Section 301 duty on goods found on a list of 818 8-digit tariff subheadings with country of origin China that are entered on or after 12:01 a.m. Eastern time July 6, said Alex Amdur, CBP director-antidumping and countervailing duty policy and programs, on a call held July 5 to answer questions from the trade community. Based on country of origin, not country of export, the tariffs will be applied based on the date of entry, and goods with an entry date prior to July 6 will not be subject, including in cases in which the filers “elect” such an entry date.

Topics:Section 301 tariff exclusions, U.S. Trade Representative (USTR), Customs duty, Reciprocal tariffs
CBP Updates Filing Instructions for Section 301 Tariffs Beginning July 6
July 3, 2018 |Customs

Drawback will be available on entries subject to 25 percent Section 301 tariffs set to take effect July 6 on products from China, CBP said in updated guidance on the new tariffs. CBP also said that, when submitting an entry in which a heading or subheading in Chapter 98 is claimed on merchandise covered by the Section 301 tariffs, filers must first report subheading 9903.88.01 (the Chapter 99 subheading for the duties), followed by the applicable Chapter 98 subheading and the normal Chapter 1-97 classification. USTR released its final list of tariff subheadings covered by the tariffs on June 15 (see 1806150003).

Topics:Customs duty, Drawback
CBP Expected to Keep Close Track of Bond Sufficiency After Section 301 Tariffs Take Effect
July 2, 2018 |Trade Business

Importers may need to up their customs bond amounts after the Section 301 25 percent tariffs take effect on goods from China, said Laura Siegel Rabinowitz, special counsel at Kelley Drye, in a June 28 blog post. "While bonds are based on imports for the previous twelve months, the time period is rolling and we expect CBP to be aggressively reviewing imports from China beginning on July 6," she said. Rabinowitz said that after "the Section 232 duties on imported steel and aluminum went into effect recently, CBP sent letters to certain importers giving them thirty days to increase their bonds to be commensurate with the new tariffs."

Topics:Customs duty, Section 232 Tariffs
CBP Releases Details on Section 301 Duty Collections
June 28, 2018 |Top News

CBP provided some details on the coming duty collections on Chinese goods covered by the Section 301 tariffs (see 1806150003) in a June 28 CSMS message. "In addition to reporting the Chapters 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.01 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy," CBP said. The tariffs only "apply to products of China, and are based on the country of origin, not country of export." CBP said the additional duties won't apply "to products for which entry is properly claimed under a heading or subheading in Chapter 98," which covers returned U.S. goods.

Topics:Section 301 tariff exclusions, Customs duty
President Lets Congress Take Lead on Foreign Investment Restrictions
June 27, 2018 by Mara Lee|White House

The administration said it will wait for Congress to pass the Foreign Investment Risk Review Modernization Act, an update to current laws on the Committee on Foreign Investment in the United States rather than making its own restrictions on Chinese investment in American firms. As part of the Section 301 investigation, the treasury secretary was supposed to make recommendations on restrictions by June 30. President Donald Trump announced June 27, "I have concluded that [FIRRMA] legislation will provide additional tools to combat the predatory investment practices that threaten our critical technology leadership, national security, and future economic prosperity."

Proposed New Section 301 Tariffs Could Hurt Electric Scooter Startups, Flexport Says
June 22, 2018 |Trade Business

Among the newest list of proposed HTS subheadings to be subject to 25 percent Section 301 tariffs (see 1806210029) are electric scooters, a product that's helped fuel rapid growth of short-term scooter rental companies in the U.S., Flexport noted in a June 21 blog post. Import data for the last year shows "goods qualifying as 8711.60.00 added up to nearly $670 million worth of scooters brought into the U.S.," Flexport's communications director Parker Ward said. "Had these 25% tariffs been in place during the same time period, this would have added an additional $170MM in supply chain costs for scooter importers."