Tariff Watch Update (23rd Edition)
Breaking News. The Office of the U.S. Trade Representative announced that on October 31, 2019 it will begin accepting tariff exclusion requests for Chinese products classified within the so-called "fourth tranche" of Section 301 tariffs. Specifically, these exclusion requests pertain to the additional tariffs that went into effect on September 1, 2019 at 15 percent for products listed on List 4A, which can be found at Annex A of the August 20, 2019 Federal Register Notice. This new round of exclusion request will not cover any Chinese imports identified on List 4B, which is currently scheduled to take effect on December 15, 2019.
Similar to the exclusion procedure for the third tranche of Section 301 tariffs, USTR will establish a web portal for submitting exclusion request and the web portal is scheduled to open at noon EDT on October 31, 2019. Interested persons must submit requests for exclusions in the period between the opening of the portal on October 31, 2019 and January 31, 2020 submission deadline. Any granted exclusion will be effective for one year, starting from September 1, 2019, effective date for List 4A products.
USTR has prepared a form for exclusion request and information to be entered on the exclusion request form for Chinese products under List 4A are also similar to what was required for the third tranche Section 301 tariff exclusion requests. Specifically, each request must:
1. Identify a particular product, including the 10-digit HTSUS subheading, detailed product description, and principal use; 标识特定产品，包括10位美国关税协调代码，详细的产品描述和主要用途;
2. Provide supporting data, including relevant financial data associated with the Chinese imports; and 提供支持性数据，包括与中国进口产品相关的财务数据；以及
3. Provide the rationale for the requested exclusion, including: 提供要求豁免额外关税的基本理由，包含:
- Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the US or third country. 该产品是否只能从中国进口且该产品或类似产品是否可以从美国或第三国获得；
- Whether the requester has attempted to source the product from the US or third countries. 申请方是否尝试从美国或第三国获得该产品；
- Whether the imposition of additional tariffs on the particular product will cause severe economic harm to the requester or other US interest. In support of this rationale, USTR for the first time asked the requester to address the number of employees in an interested company and the number of employees potentially affected by the additional tariffs. 额外关税的征收是否会对申请者或其他美国利益造成严重的经济损害。为了支持这一理由，美国贸易代表办公室首次要求申请者说明申请关税豁免的公司中的雇员人数以及可能受到额外关税影响的雇员人数。
- Whether the particular product is strategically important or related to "Made in China 2025" or other Chinese industrial programs. 该产品是否具有战略重要性或与"中国制造2025" 或其他中国工业项目有关。
Besides the information requested above, USTR, for the first time, asked whether the product is currently subject to an antidumping or countervailing duty order issued by the US Department of Commerce.
Same with the exclusion process for the previous tranches of Section 301 tariffs, after an exclusion request is posted on USTR's web portal, interested persons will have 14 days to respond to the request. And the requester will have the opportunity to reply to a response within the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response.
In addition, USTR also announced that additional exclusions for Chinese imports subject to an additional 25% tariff on the third tranche of Section 301 tariffs will be issued this week in response to approximately 150 exclusion requests previously submitted as part of USTR's ongoing process.
This recent announcement follows the President’s announcement earlier this month that China and the U.S. has reached an informal agreement, to be memorialized in November. Resulting from this positive development, the U.S. put off increasing additional duties on $250B of Chinese goods from 25% to 30% pending finalization of the agreement.
As always, we will continue to follow USTR's action on the Section 301 tariffs and report back when more news is coming. Otherwise, if your products belong to the List 4A of Section 301 tariffs, it is time to begin preparing your tariff exclusion request. The Dickinson Wright team is available to help you prepare and submit your exclusion request. Please contact us today to get started.
Dickinson Wright Law Firm
Contact: Mark Heusel: Member & China Practice Group Chair
About Mark: Mark Heusel is an experienced commercial business attorney and serves as the Chair of the Firm’s China Practice Group. He has more than 25 years of experience in representing multi-national companies in the manufacturing, retail and automotive industries. Mr. Heusel’s experience includes advising foreign companies in the areas of foreign direct investment in the United States, business formation, Greenfield investment, international trade, commercial transactional matters, and dispute resolution. In his role as International Practice Group Chair, he serves as general counsel to companies throughout Asia and Europe, directing the firm’s resources to better assist his clients.
Mr. Heusel began his legal career by representing clients in a variety of litigation matters in state and federal courts and in various domestic and international arbitral forums. With more than 20 years of litigation experience, particularly in the areas of contract disputes, supply chain litigation, employment matters (including discrimination and wrongful discharge litigation), commission disputes, personal injury, and real estate and land use litigation, he gained invaluable first-chair experience in understanding and recognizing how a company’s success may be impacted by business disputes. Leveraging this experience, Mr. Heusel focused his career on assisting foreign companies entering the North American market. His interests and passion for helping companies in a proactive manner led to his current position as International Practice Group Chair, where he now has the opportunity to advise and counsel clients entering or expanding their businesses in North America.