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USTR Releases China Tariff Exclusion Process

On Friday, July 6, 2018, the effective date of the new U.S. Section 301 tariffs, the United States Trade Representative (USTR) published the procedure on how companies can request exclusion from the tariffs on specific products from China.

Exclusion Information Required by USTR

USTR is seeking specific information, data and the rationale for the requested exclusion. The following information is required in any exclusion request.

  • Identification of the product as defined by its physical characteristics that distinguish it from other products within the covered eight-digit HTSUS subheading. USTR will not consider a request that identifies the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual or chief use, or trademarks or tradenames.
  • The 10-digit subheading of the HTSUS that is being requested for exclusion.
  • The annual quantity and value of the Chinese-origin product that the requester purchased in each of the last three years. If precise annual quantity and value information is not available, requesters should provide an estimate and explain the basis for the estimation.
  • Whether the product is available only from China, or whether the product and/or a comparable product is available from sources in the U.S. and/or a third country.
  • Whether the imposition of additional duties on the product would cause severe economic harm to the requester or other U.S. interests.
  • Whether the product is strategically important or related to China’s “Made in China 2025” program.
  • Any other data or information that is considered relevant to the evaluation request.

If you have two or more products, you must submit a separate request for each product. USTR will then evaluate each request on a case-by-case basis, considering whether the exclusion would undermine the objective of the Section 301 investigation. Any exclusion that is granted will be effective retroactive to July 6, 2018.

Note that USTR has not yet released the official form that it recommends requestors use, however that form is expected soon.

Deadline for Submitting Exclusion Requests

The deadline to submit exclusion requests for this group of products is October 9, 2018.

Opposition and Rebuttal

Interested parties can oppose an exclusion request, but must do so within 14 days of the date that the exclusion request is posted on regulations.gov. The company submitting the exclusion then has seven days to rebut the opposition comments.

Considerations

It is important that all companies filing requests consider whether China is the only source of supply for the specified product. This appears to be a key element for exclusion. Companies should develop a strategy to address this issue, especially where there may be some small U.S. or third-country producers of the specified product for which an exclusion is being requested. Please consider using legal counsel to ensure you are presenting the best case.

Interested parties that want to continue to have tariffs applied to a particular product must actively monitor the exclusion requests for the product of interest – given the very short 14-day deadline to oppose exclusion requests.

For more information, please contact your local MIQ Logistics representative.