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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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Fossil Files for List 4A Tariff Exemption on Traditional Watch Imports From China
December 9, 2019 |Trade Business

Fossil Group filed for an exemption to the 15 percent List 4A Section 301 tariffs it has paid since Sept. 1 on the traditional watches it imports from China under tariff subheading 9102.11.2520, said a Dec. 6 posting in the Office of the U.S. Trade Representative’s public docket. “Fossil continues to look for ways to diversify its sourcing for traditional watches,” the vendor said. It recently invested in a factory in India that has “capacity to address our product needs” for the local market, but can’t “address our product needs in the global markets,” it said. “Watch manufacturing is a highly specialized skill which cannot be readily duplicated.” Moving traditional watch manufacturing out of China “is not feasible at this time, especially in the very challenging market for traditional watches that Fossil has been experiencing over the last couple of years,” it said. The exemption request doesn’t list Fossil smartwatch imports, which also have List 4A exposure. Fossil also requested exemptions on four classifications of watch straps imported under subheadings 9102.11.10.30, 9102.11.25.30, 9102.11.30.30 and 9102.11.45.30, plus three on the watch cases it imports under subheadings 9102.11.10.20, 9102.11.30.20 and 9102.11.45.20.

Tariffs Sent China’s Share of October TV Imports Plunging to 27.6%
December 9, 2019 |Trade Business

TV imports to the U.S. became a much more Mexico-centric business in October, the second full month of 15 percent Section 301 List 4A tariff exposure for finished sets from China, according to recently released Census Bureau statistics accessed through the International Trade Commission’s DataWeb tool. More than two-thirds of October’s TV unit imports to the U.S. came from Mexico, while China’s share plummeted to half its October 2018 level, DataWeb said.

ITC Issues Revision 19 to 2019 HTS, Implementing Another Set of Section 301 Exclusions
December 9, 2019 |Other U.S.

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.

Topics:Section 301 tariff exclusions, Harmonized Tariff Schedule
CBP Announces Filing Procedures for Recently Granted Third Tranche Section 301 Exclusions
December 6, 2019 by Tim Warren|Customs

CBP added on Dec. 5 the ability in ACE for importers to file entries with recently excluded goods in the third tranche of Section 301 tariffs, it said in a CSMS message. Filers of imported products that were granted an exclusion (see 1911260056) should report the regular Chapters 17, 28, 39, 68, 69, 73, 83, 84, 85, 87, 89 and 94 Harmonized Tariff Schedule number, as well as subheading 9903.88.35, CBP said in the message. “Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when” subheading 9903.88.35 is submitted, CBP said.

Topics:Harmonized Tariff Schedule, Customs duty
ITC Issues Revision 18 to 2019 HTS, Granting Mali Special AGOA Status
December 4, 2019 |Other U.S.

The International Trade Commission issued Revision 18 to the 2019 Harmonized Tariff Schedule. The only change was the addition of Mali to the list of countries in Note 2(d) to subchapter XIX of chapter 98 that are considered lesser developed beneficiary countries for the purposes of textile imports under the African Growth and Opportunity Act. The addition of Mali was mandated by Presidential Proclamation 9955, issued Oct. 25. The HTS changes took effect Nov. 30.

Topics:Harmonized Tariff Schedule, African Growth and Opportunity Act (AGOA)
Uyghur Human Rights Law Would Derail Trade Talks, Warns China Foreign Ministry
December 4, 2019 by Paul Gluckman and Ian Cohen|Congress

The Dec. 3 House passage of the Uyghur Human Rights Policy Act of 2019 will have serious repercussions for U.S.-China trade talks if the bill becomes law, a China Foreign Affairs Ministry spokesperson threatened on Dec. 4. H.R. 649 and the companion S. 178 that cleared the Senate in September demand tough U.S. sanctions on China over reports of government-run detention centers imprisoning millions of Muslim-minority Chinese citizens in Xinjiang.

Topics:Forced Labor , Trump tariffs
Trump Says He Likes ‘Idea of Waiting’ for China Trade Deal Until After Election
December 3, 2019 |White House

President Donald Trump has “no deadline” for striking a trade deal with China, he told reporters Dec. 3 during a meeting in London. “I like the idea of waiting until after the election for the China deal,” he said. The Chinese “want to make a deal now, and we’ll see whether or not the deal’s going to be right,” he said. “It’s got to be right.” A trade agreement is “dependent on one thing -- do I want to make it?” Trump said. “We’re doing very well with China right now. We can do even better with the flick of a pen.” China didn’t immediately comment. Extending the U.S.-China trade war for another year past the 2020 election would be a “bad deal” for “every segment of the economy,” said David French, senior vice president-government relations at the National Retail Federation. “We want and need to see a deal as soon as possible,” said French. Four rounds of Section 301 tariffs on Chinese goods at 15 percent and higher “continue to hurt U.S. businesses, workers and consumers and are a substantial drag on the U.S. economy,” he said.