USTR Announces Process for Reinstating Certain Section 301 China Tariff Product Exclusions

America Commerce Consultant (USTR) introduced a interval for public touch upon whether or not Section 301 product exclusions must be reinstated for sure Chinese language-origin items. The product exclusions eligible for potential reinstatement are the comparatively small subset of exclusions for which the USTR had each beforehand granted an exclusion and an extension of the exclusion. This reinstatement utility course of is separate from the method by which the USTR is contemplating whether or not to increase COVID-related exclusions. The USTR discover about this new course of was printed within the Federal Register on Oct. 8, 2021, 86 FR 56345.

Section 301 Background

The U.S. has imposed tariffs on items imported from China pursuant to Section 301 of the Commerce Act of 1974 since July 2018. The USTR imposed Section 301 tariffs following the USTR’s investigation and willpower that China’s acts, insurance policies, and practices relating to expertise switch, mental property, and innovation had been unreasonable and discriminatory and burdened or restricted U.S. commerce. The USTR imposed the Section 301 tariffs in 4 rounds issued as “Lists” on the roughly $550 billion of products imported from China yearly.  After imposing Section 301 tariffs on a given Checklist of products in 2018 and 2019, the USTR adopted with an exclusion request course of by which candidates utilized for exemptions from the Section 301 tariffs and the USTR granted sure exclusions. See the chart under for a abstract of the Section 301 tariff charges imposed so far for Lists 1 to 4.

Beginning in 2020, the USTR additionally instituted processes by which candidates may apply to have granted exclusions prolonged past the unique date of expiration. The USTR granted extensions for a subset of the exclusions it had initially granted, finally extending a complete of 549 exclusions throughout Lists 1 to 4a that expired both by Dec. 31, 2020, or within the spring of 2021. Solely these 549 expired exclusions are presently eligible for consideration by way of this reinstatement utility course of. See the chart under for the variety of eligible exclusions by Checklist and see the USTR’s listing of every of the 549 beforehand prolonged exclusions here

Notably, this reinstatement course of doesn’t pertain to beforehand granted exclusions that had been by no means granted an extension, beforehand denied exclusion requests, or to new exclusion requests. America Commerce Consultant Ambassador Katherine Tai’s speech of Oct. 4, 2021, outlining the brand new Administration’s U.S.-China commerce coverage alluded to this exclusion reinstatement course of stating, “we will start a targeted tariff exclusion process. We will ensure that the existing enforcement structure optimally serves our economic interests. We will keep open the potential for additional exclusion processes as warranted.” It’s unclear whether or not Ambassador Tai was indicating that additional exclusion reinstatement processes could be forthcoming. The textual content of Ambassador Tai’s speech is on the market here.

In 2020, the USTR additionally supplemented the above-mentioned exclusion request processes by instituting an extra exclusion request course of for items imported from China that had been wanted to fight the COVID-19 pandemic. The COVID-related exclusions the USTR granted are nonetheless in place. They had been to be legitimate by way of Sept. 30, 2021, however the USTR granted an interim extension by way of Nov. 14, 2021, to present itself extra time to judge the general public feedback it obtained about extending the COVID-related exclusions that had been due by Sept. 27, 2021.

Particulars in regards to the Exclusion Reinstatement Process

The USTR will start accepting feedback on whether or not, and for what time period, to reinstate exclusions on Oct. 12, 2021, by way of its on-line internet portal, https://comments.USTR.gov, and the submission deadline is Dec. 1, 2021.  Submissions could also be in help or oppose the reinstatement of a selected exclusion no matter who secured the unique exclusion or exclusion extension.  As with earlier exclusion request processes, the USTR has supplied a template with the knowledge required and to be thought of.

The USTR will consider, on a case-by-case foundation, the doable reinstatement of every exclusion.  A essential issue for the USTR’s analysis is whether or not a selected product stays accessible solely from China regardless of Section 301 tariffs having been in place. The USTR asks submissions to handle particularly the next with respect to this issue:

  1. Whether or not a selected product and/or a comparable product is on the market from sources in the USA and/or in third nations;

  2. Any modifications within the international provide chain since September 2018 with respect to a selected product or another related trade developments;

  3. The efforts, if any, the importers or U.S. purchasers have undertaken since September 2018 to supply a product from the USA or third nations; and

  4. Home capability for producing a product in the USA.

The USTR additionally will think about whether or not there shall be extreme financial hurt to the commenter from continued Section 301 tariffs and the way different U.S. pursuits shall be impacted akin to small companies, employment, manufacturing output, essential provide chains, and the purpose of eliminating China’s unhealthy acts, insurance policies, and practices relating to expertise switch, mental property, and innovation.

The chart under summarizes the Section 301 tariffs imposed so far and the variety of tariff subheadings eligible to be reinstated by Checklist.

Word: A crossed-out tariff price signifies it didn’t take impact. The present tariff price is in daring font.
* This column incorporates the variety of tariff subheadings by Checklist that at the moment are eligible to be reinstated by way of this new USTR exclusion request utility course of. The USTR restricted eligibility for this utility course of to the subset of exclusions for which the USTR had each beforehand granted an exclusion and an extension of the exclusion. 
** The annual mixture commerce worth of Checklist 4 imports is roughly $300 billion.

 

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