Tariff Watch Update (24th Edition)
Breaking News. As news this week was focused on progress towards reaching the so-called “phase 1” of the US-China trade agreement, and the possibility that some current tariffs would be reeled back, business as usual continued at the offices of the U.S. Trade Representative (USTR), including the opening of the exclusion process for tranche 4A tariffs. And, with lesser fanfare, on October 28, 2019, the office of the USTR announced its decision to consider extending particular exclusions granted in December 2018 for and additional period not to exceed twelve months. The USTR is now establishing a procedure to invite public comments on whether to extend certain exclusions.
The possible extensions apply only to exclusions granted as of December 28, 2018 (i.e., exclusion granted under the first tranche of Section 301 Tariffs). This first round of exclusions, which included 31 Chinese products from List 1 of Section 301 Tariffs, took effect on December 28, 2018, and are set to expire on December 28, 2019. To view the product list for exclusions granted on December 28, 2018, please click here. At this time, the USTR is not considering extensions on exclusions granted under any other rounds of product exclusions.
An interested party can submit a comment favoring or opposing specific tariff exclusions by submitting Form A through regulations.gov, which will be posted on USTR's public docket. USTR explained that it will evaluate the possible extension of each exclusion on a case-by-case basis. The focus of the evaluation will be "whether, despite the first imposition of these additional duties in July 2018, the particular products remain available from China." Specifically, the USTR asks commenters to address the following:
- Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries. 是否可以从美国和/或第三国获得特定产品和/或类似产品。
- Any changes in the global supply chain since July 2018 with respect to a particular product, or any other relevant industry developments. 自2018年7月以来，与特定产品或任何相关行业发展有关的全球供应链是否发生任何变化。
In addition to Form A, commenters who are importers and/or purchasers of the products covered by the exclusion MUST complete Form B, which requests certain business confidential information that will not be disclosed to the public. Both forms ask for updated information that is available after July 2018. Specifically, Form B asks for the value of the exempted imports and whether Chinese suppliers of those products have lowered their prices over the past year. USTR also requires importers and/or purchasers of the particular products to explain any efforts they have undertaken since July 2018 to source their products from the United States or third countries.
The period for submitting comments will run from November 1, 2019 to November 30, 2019.
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 are part of the first round of exclusions granted on December 28, 2018 and you would like to extend your exclusions for one more year, it is time to begin preparing the extension request. The Dickinson Wright team is available to help you prepare and submit your extension request. Please contact us today to get started.
Dickinson Wright Law Firm
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.