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ICYMI: First Section 301 Product Exclusions Announced; CBP Not Yet Accepting

Tuesday, January 15, 2019
Sandler, Travis & Rosenberg Trade Report

[Editor’s note: The following includes information from articles originally published in the Dec. 28, 2018, and Jan. 7, 2019, issues of the ST&R Trade Report.]

The Office of the U.S. Trade Representative has announced the first batch of products that will be excluded from the additional 25 percent duty imposed under Section 301 on some $34 billion worth of imports from China. These product exclusions will be retroactive to July 6, 2018, and remain in place through Dec. 27, 2019. USTR notes that it will continue to issue decisions on pending exclusion requests on a periodic basis.

The following are covered by the first batch of product exclusions (see link to full list at the bottom of this article).

- seven existing 10-digit HTSUS subheadings: 8412.21.0075, 8418.69.0120, 8480.71.8045, 8482.10.5044, 8482.10.5048, 8482.10.5052, and 8525.60.1010

- 24 specially prepared product descriptions, covering such items as certain spark-ignition engines for marine propulsion, stainless steel stretchers, roller machines with dies for embossing paper, plastic salad spinners, water filtration apparatus, winches, elevators, belt conveyors, work stands, radiation therapy systems, thermostats, stainless steel guards, stainless steel scrapers, and stainless steel suction boxes

According to USTR, the exclusions are available for any product that meets the specific product description, regardless of whether the importer filed an exclusion request. The scope of each exclusion is governed by the scope of the 10-digit headings and the specific product descriptions and not by the product descriptions set out in any particular request for exclusion.

USTR states that Section 301 product exclusions must be claimed using new HTSUS subheading 9903.88.05, but U.S. Customs and Border Protection has said it is not yet accepting such claims. CBP states that updates to the Automated Commercial Environment to reflect the exclusions will not be implemented until ten business days after the ongoing federal government shutdown has concluded. Until then (a) importers will have to continue paying the additional tariff on affected goods and (b) entries and entry summaries of such goods must be submitted without the HTSUS Chapter 99 product exclusion numbers referenced in the Federal Register notice of the product exclusions and will be rejected by ACE if those numbers are transmitted.

CBP has said that once it issues guidance and implements ACE enhancements to reflect the exclusions filers may submit post-summary corrections or protests to obtain refunds.

Requests for exclusions from the Section 301 25 percent tariff on another $16 billion worth of goods from China (List 2 items) were due by Dec. 18 and no such exclusions have yet been announced. The government has not yet established an exclusion process for the Section 301 tariff on $200 billion worth of Chinese goods (List 3 items) that is currently at 10 percent and is scheduled to increase to 25 percent on March 1.

For more information on exclusions or Section 301 tariffs in general, please contact Nicole Bivens Collinson at (202) 730-4956 or Kristen Smith at (202) 730-4965.

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