The Office of the U.S. Trade Representative announced on October 18th that on October 31, 2019 thru January 31, 2020, it will accept tariff exclusion requests for Chinese imports subject to an additional 15 percent tariff (List 4 tariffs) that went into effect on September 1, 2019.
Exclusion requests will be received via USTR’s online exclusion request processing portal at exclusions.ustr.gov; details regarding the application process will be published in the Federal Register next week. Any exclusions granted will be effective for one year, starting from the Sept. 1, 2019 effective date for List 4A.
USTR also announced that additional exclusions for Chinese imports subject to an additional 25 percent tariff (List 3 tariffs) will be issued next week in response to approximately 150 exclusion requests as part of our ongoing process.
Details on List 4A Exclusion Process
The additional tariff on the so-called List 4A items was initially set at 10 percent and subsequently raised to 15 percent. This tariff was levied in response to a Section 301 investigation determination that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory.
Any interested person, including trade associations, may request exclusions from the Section 301 tariff on List 4A items. Each request must include the following information:
- contact information, including full legal name of the organization making the request, whether the requester is a third party (law firm, trade association, or customs broker) submitting on behalf of an organization or industry, and primary point of contact (information on whether the requester’s business satisfies the Small Business Administration’s size standard for a small business may also be provided);
- applicable ten-digit HTSUS number (different models classified under different eight-digit or ten-digit subheadings are considered different products and require separate exclusion requests;)
- product name and detailed description of the product, including its physical characteristics such as dimensions, weight, material composition, etc. (requesters may submit a range of comparable goods within the product definition set out in an exclusion request);
- product function, application, principal use, and any unique physical features that distinguish it from other products within the covered eight-digit subheading;
- requester’s relationship to the product (importer, U.S. producer, purchaser, industry association, other);
- whether the product is currently subject to an antidumping or countervailing duty order issued by the U.S. Department of Commerce;
- annual quantity and value of Chinese-origin product, domestic product, and third-country product purchased by the requester in 2017, 2018, and the first half of 2019;
- information on the requester’s gross revenues for 2018 and the first half of 2019;
- for imports sold as final products, the percentage of the requester’s total gross sales in 2018 that sales of the Chinese-origin product accounted for;
- for imports used in the production of final products, the percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for and the percentage of the requester’s total gross sales in 2018 that sales of the final product(s) accounted for.
In addition, each request should address the following:
- whether the product is available only from China and whether the product and/or a comparable product is available from sources in the U.S. and/or third countries;
- whether the requester has attempted to source the product from the U.S. or third countries;
- whether the imposition of additional duties on the product will cause severe economic harm to the requester or other U.S. interests;
- whether the product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
Requesters may also provide information about the possible cumulative effects of the Section 301 tariff actions, particularly information about any previously submitted exclusion requests as well as the value of the requester’s imports covered by the previous tariff actions. Additionally, requesters may provide any other information or data that they consider relevant to the evaluation of an exclusion request.
The MBS Trade Team is gearing up to advocate for and file exclusion request for firm clients. If you need assistance in filing for these refunds please contact us.