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No Exclusions Yet Granted from Additional Tariffs on Chinese Goods

Friday, November 02, 2018
Sandler, Travis & Rosenberg Trade Report

The Trump administration has received thousands of requests for exclusions from the additional tariffs it has imposed on imports from China but has not yet approved any, according to information posted on the website of the Office of the U.S. Trade Representative. Hundreds of requests have been denied while the rest are at various stages of review.

Following a Section 301 determination that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, the Trump administration has levied higher tariffs on Chinese goods in stages. The first phase imposed a 25 percent additional tariff on $34 billion worth of imports as of July 6, and exclusion requests were due by Oct. 9. The administration extended that tariff to another $16 billion worth of goods as of Aug. 23 and is accepting exclusion requests through Dec. 18.

A ten percent additional tariff was imposed on so-called List 3 goods (valued at about $200 billion) as of Sept. 24 and is scheduled to increase to 25 percent on Jan. 1, but the administration has not yet announced any exclusion request process for these goods. The White House has also warned of an as-yet-unspecified tariff hike on an additional $267 billion worth of Chinese goods if Beijing “takes retaliatory action against our farmers or other industries.”

(Click here for more detailed information on affected products and other aspects of the Section 301 process. Click here to register for ST&R’s Nov. 6 webinar on avoiding Section 301 tariff liability.)

Spreadsheets made available by USTR indicate that more than 7,800 exclusion requests were submitted for List 1 goods. Just over 800 of these have been denied but none have been approved. The remainder are listed as being at one of four stages: most are still open for public comment, some are undergoing an initial review of whether the request should be granted based on specified criteria, and a relative few are being reviewed with U.S. Customs and Border Protection to determine whether the requested exclusion would be administrable. None are listed as being in stage 4, in which the exclusion is granted and prepared for publication in the Federal Register. Any List 1 exclusions that are granted would be retroactive to July 6, 2018, and remain in effect for a year after publication.

Slightly more than 400 exclusion requests have been received and posted for comment for List 2 goods. This number is likely to rise as the Dec. 18 deadline for submitting such requests approaches. Most requests posted to date are still open for public comment, though a handful are already undergoing the substantive review.

For more information on the Section 301 tariffs, including exclusion requests, please contact Nicole Bivens Collinson at (202) 730-4956 or Kristen Smith at (202) 730-4965.

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