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More China Tariff Exclusion Requests Denied as Reviews Move Ahead

Friday, March 01, 2019
Sandler, Travis & Rosenberg Trade Report

The Trump administration has denied thousands more requests for exclusions from the additional tariffs it has imposed on imports from China but has made no additional approvals, according to information made available by the Office of the U.S. Trade Representative. Most such requests remain at various stages of review but USTR is making progress in conducting those reviews.

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 accepted 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. A scheduled March 2 increase in this tariff to 25 percent has been indefinitely postponed. Administration officials have said they will not provide any exclusion request process for these goods unless that increase occurs, although Congress has directed USTR to create such a process. 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.)

Information recently updated by USTR indicates that as of Feb. 22 nearly 11,000 exclusion requests had been submitted for List 1 goods. USTR has denied 4,535 of these requests (up from 1,730 previously) and granted 984 (no change; click here for more details on requests granted).

The remainder of the List 1 requests are listed as being at one of four stages. Only 12 are still open for public comment (down from 31), 2,075 are undergoing an initial review of whether the request should be granted based on specified criteria (down from 6,350), and 3,226 are being reviewed with U.S. Customs and Border Protection to determine whether the requested exclusion would be administrable (up from 1,728). None are currently listed as being in stage 4, in which the exclusion has been granted and is being prepared for publication in the Federal Register.

USTR has also received 2,931 exclusion requests for List 2 goods (up from 2,799). Of these, only 23 are still open for public comment (down from 1,157) while 2,921 are undergoing substantive review (up from 1,640).

For more information on 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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