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Exclusion Process for Latest China Tariffs Sought by Lawmakers

Monday, October 22, 2018
Sandler, Travis & Rosenberg Trade Report

Nearly 200 lawmakers wrote to U.S. Trade Representative Robert Lighthizer recently requesting the establishment of a process allowing U.S. companies to request exclusions from the additional tariffs imposed on $200 billion worth of goods imported from China. These goods were assessed an additional 10 percent duty beginning Sept. 24 and the tariff is slated to rise to 25 percent as of Jan. 1, 2019.

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. The so-called List 3 goods were assessed a 10 percent additional tariff as of Sept. 24 but no exclusion request process has yet been announced.

(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 Oct. 23 webinar on the latest on this and other current trade issues.)

In an Oct. 15 letter, more than 150 Republican and Democrat members of the House of Representatives said the lack of an exclusion process for the List 3 goods “is a glaring omission, particularly given its size in relation to the first two lists.” The lawmakers explained that an exclusion process “is vital to ensuring that U.S. companies can seek relief in the event that there are no alternative suppliers or if other special circumstances exist that could harm their ability to compete in the global marketplace.”

Eleven Democrat senators sent a similar letter to Lighthizer Oct. 18. They noted that the goods on List 3, unlike those on the previous two lists, appear to have little to do with the Section 301 investigation’s focus on technology and instead are products that “Americans use each day,” thus making it more important to include an exclusion process for them. The letter asked Lighthizer to indicate whether the administration intends to offer such a process; if so, how; and if not, why.

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