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ST&R Efforts Yield Extension of Grandfather Clause for Higher China Section 301 Tariffs

Monday, June 03, 2019
Sandler, Travis & Rosenberg Trade Report

The Office of the U.S. Trade Representative announced May 31 that its intent to extend the deadline by which List 3 goods from China must enter the U.S. to remain subject to a Section 301 additional tariff of 10 percent rather than being subject to a higher tariff of 25 percent. Originally, such goods exported before May 10 had to be entered by June 1 or be subject to the higher tariff rate, but USTR has now extended that entry date to June 15. 

Many companies were caught with goods on the water when the increased tariffs were announced. USTR initially said that any goods exported before May 10 would be grandfathered in at the 10 percent tariff rate regardless of the import date, but less than 24 hours later the agency modified that notice and imposed an imported-by date of June 1. 

This date, only 21 days after the increased tariffs went into effect, would have negatively impacted many companies. Those that clear their goods through East Coast ports were especially disadvantaged, as ships could not possibly leave China, clear the Panama Canal, and arrive in an East Coast port within 21 days.

Sandler, Travis & Rosenberg, P.A. discussed these concerns with members of Congress and USTR, explored legal action to prevent the tariff increase on goods shipped in reliance upon USTR’s original notice, and advocated for a revision. USTR subsequently made this favorable change, which will benefit all companies importing List 3 goods from China.

For more information, please contact Nicole Bivens Collinson at (202) 730-4956.

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