Background

The Section 301 additional tariff on List 4A goods imported from China will be reduced from 15 percent to 7.5 percent on Feb. 14, the effective date of the phase one trade agreement the U.S. and China signed Jan. 15 in Washington. A full list of goods affected by this change, which have a total trade value of approximately $120 billion, is available here.

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

Guidance from U.S. Customs and Border Protection states that any covered article that is entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on Feb. 14 will be subject to the 7.5 percent duty rate in addition to the applicable general (Column 1) duty rate. HTSUS subheading 9903.88.15 must be reported for entries of such goods.

CBP also states that (a) covered goods admitted to a foreign-trade zone under privileged foreign status will be subject to tariff classification at the rate of duty and tax in force on the date the application for privileged foreign status was filed and (b) immediate delivery procedures are not applicable.

Bonded warehouses may be a good option for taking advantage of the lower tariff rate. Because the duty rate for goods stored in a bonded warehouse is the rate applicable when they are withdrawn for consumption, List 4A goods physically entering the U.S. before Feb. 14 could be stored in a bonded warehouse and then withdrawn on or after that date to take advantage of the 7.5 percent tariff rate.

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