China Section 301 Tariff Updates

China Section 301 Tariffs Updates

In 2018, the U.S. imposed three rounds of tariffs on more than $250 billion worth of Chinese goods after its Section 301 investigation determined that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation were unreasonable and discriminatory.  The duties of up to 25% cover a wide range of products, from handbags to railway equipment.

On August 1, 2019, President Trump announced he will impose an additional 10% duty on the $300 billion, List 4 goods beginning September 1, 2019.

On August 13, 2019 the USTR delayed some of the additional tariffs on the proposed List 4 until December 15, 2019, List 4B, and removed some items from the list.  However, many items will remain subject to the additional duties on September 1, List 4A.

 

Summary of Section 301 Tariffs 

 

List No. Covered Products Additional Tariff Rate Effective Date
List 1

Final List

$34 Billion

818 HTSUS Subheadings

25%

Increased to 30%

July 6, 2018

October 15, 2019 (postponed from Oct. 1)

List 2

Final List

$16 Billion

284 HTSUS Subheadings

25%

Increased to 30%

August 23, 2018

October 15, 2019 (postponed from Oct. 1)

List 3

Final List

$200 Billion

5,745 HTSUS Subheadings

10%

Increased to 25%

Increased to 30%

September 28, 2018

May 9, 2019

October 15, 2019 (postponed from Oct. 1)

List 4

Proposed List

$300 Billion

3,805 HTSUS Subheadings

10% September 1, 2019
List 4A

Final List

~$120 Billion

15%

7.5%

 

September 1, 2019

February 14, 2020

List 4B

Final List

~$180 Billion

15%

December 15, 2019

The USTR has made technical amendments to Lists 3, 4A, and 4B to relieve issues of double Section 301 tariffs on some goods.  Effective September 24, 2019, the Section 301 additional tariff will not be imposed on goods classified under any of 39 subheadings “if the applied rate of duty for an entry is derived from another subheading and if the entry, for this reason, already is subject to the additional tariff.” In other words, if a component of a good in one of these subheadings is subject to the Section 301 tariff, the good itself will not be subject to that tariff as well.

Product Exclusions

What You Should Know

As part of the Section 301 actions, the U.S. Trade Representative’s (USTR) determination included a decision to establish a product exclusion process.  As part of the exclusion process, the USTR invites comments from interested persons with respect to the proposed action to be taken in the investigation.  The USTR requests comments with respect to any aspect of the proposed action, including:

  • The specific tariff subheadings to be subject to increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added
  • The level of the increase, if any, in the rate of duty
  • The appropriate aggregate level of trade to be covered by additional duties

Public Hearings and Deadlines for Submitting Exclusion Requests

List No. Public Hearing Deadline for Submitting Exclusion Requests Deadline for Submitting Extension Requests
List 1 May 15, 2018 May 22, 2018 November 30, 2019

April 30, 2020

June 1, 2020

USTR Comment Portal

Docket IS:  USTR-2020-0017

List 2 July 24, 2018 July 31, 2018 June 1, 2020

USTR Comment Portal

Docket ID:  USTR-20202-0018

List 3 August 20-24, 2018

August 30, 2018

August 27, 2019

September 30, 2019

June 8, 2020

USTR Comment Portal

Docket ID:  USTR–2020–0015

List 4   January 31, 2020

If you have a pending product exclusion request with the USTR and you are concerned that an entry may liquidate before the USTR renders a decision on the exclusion request, you can:

  • Request an extension of the liquidation deadline and file a Post Summary Correction no later than 15 days prior to the extended date of liquidation
  • File a protest up to 180 days after liquidation

Product Exclusions Granted

To date, the USTR has published the following Federal Register notices granting product exclusions requests for the lists below.

 

List No. Federal Register Notice
List 1 December 2018March 2019April 2019May 2019 June 2019, July 2019, September 2019, October 2019, December 2019, February 2020, March 2020, April 2020, and May 2020 NEW!
List 2 July 2019,  September 2019, and October 2019 
List 3 August 2019, September 2019, October 2018, November 13, 2019, November 27, 2019, December 2019, January 2020, February 2020,  March 16, 2020March 25, 2020, April 2020, and May 2020 NEW!
List 4 March 10, 2020, March 17, 2020, March 25, 2020, and May 2020 NEW!

 

The Office of the U.S. Trade Representative has completed its processing of requests for exclusions on List 1 and List 2 goods.

  • Of the 10,823 List 1 exclusion requests received, 7,157 were denied and 3,666 were granted
  • Of the 2,868 exclusion requests received for List 2 goods, 1,794 were denied and 1,074 were granted

The USTR is continuing to review exclusion requests for List 3 goods.

Product exclusions granted by the USTR are retroactive to the effective date.  List 1 and 2 exclusions will extend for one year after the publication of the exclusion notice in the Federal Register, while List 3 exclusions will expire of 8/7/2020 .  Per the USTR’s Federal Register notices, the product exclusions are available for any product that meets the description in the annex to the Federal Register notice, regardless of whether the importer filed an exclusion request. The scope of each inclusion is governed by the scope of the 10-digit subheadings and product descriptions listed in the annex, not by the product descriptions set out in any particular request for exclusion.

Importers of Record (IOR) may request an administrative refund for products which were granted an exclusion by the USTR by filing a Post Summary Correction.  Post Summary Corrections may be filed 300 days after release or 15 days prior to liquidation, whichever occurs first.

Tariff Exclusion Requests Granted

by the USTR

Combined Listing

____________

All Product Exclusions from Lists 1, 2, 3, 4A and 4B

Click here to download the complete list in Excel format.

China List 1 ($34 Billion)

____________

Product exclusions granted by the USTR on List 1 are retroactive to July 6, 2018 and will extend until the expiration date shown on the attached list.

China List 2 ($16 Billion)

____________

Product exclusions granted by the USTR on List 2 are retroactive to August 23, 2018 and will extend until the expiration date shown on the attached list.

China List 3 ($200 Billion)

____________

Product exclusions granted by the USTR on List 3 are retroactive to September 24, 2018 and will extend for one year after the publication of the exclusion notice in the Federal Register.

China Lists 4A & 4B ($300 Billion)

____________

The product exclusions announced  will apply as of September 1, 2019, the effective date of the $300 billion action, and will extend for 1 year from the effective date of the action.

China’s Retaliatory Tariffs

China has responded to all rounds of Section 301 tariffs by imposing tit-for-tariffs of their own.  China retaliatory tariffs appear to be targeting Trump’s core supporters – U.S. farmers, ranchers and industrial workers.

 

 

Round No. Covered Products Additional Tariff Rate Effective Date
List 1

Final List 1

$34 Billion

545 products, including soybeans, various chemicals, and automobiles

25% July 6, 2018
List 2

Final List 2

$16 Billion

333 products, including fuel, coal, and medical equipment

25% August 23, 2018
List 3

List 3.1

List 3.2

List 3.3

List 3.4

$60 Billion

5,207 products, including agricultural equipment, machinery and textiles

5% – 10%

 

September 28, 2018

 

List 4

Final List 4A

Final List 4B

 

1,718 products

3,361 products

 

3% – 5%

Suspended

 

August 23, 2019

August 23, 2019

China’s Product Exclusions

On September 11, 2019 China announced their first product exclusions since the U.S.-China trade war began.

China’s State Council Tariff Commission said it will continue to review exemption requests and announce new exemptions in the future.

Tariff Exemption Requests Granted

by China’s State Council Tariff Commission

Batch 1

Product exclusions granted by China’s State Council Tariff Commission for Lists 1 and 2 will be exempt from additional duties effective September 17 and will remain in effect through September 16, 2020.

List 1

____________

Goods appearing on this list are eligible for refunds if filed within 6 months.

List 2

____________

Goods appearing on this list are not eligible for refunds.

List 3

____________

No further information, including expiration dates and refund eligibility has been released.

Batch 2

Batch 2 exclusions from the additional 25% tariff will be effective from May 19, 2020 to May 18, 2021.  Importers of Record have six months to apply for refunds.

List 1

____________

Goods appearing on this list are eligible for refunds if filed within 6 months.

OCEANAIR will continue to monitor the situation and will provide status updates on this page as they become available.