As reported in Top News
The U.S Trade Representative has issued its first list of product exclusions from Section 301 tariffs on products from China, granting full or partial exemptions for 22 10-digit tariff subheadings, according to a pre-publication copy of a notice posted to the agency’s website Dec. 21. The product exclusions apply retroactively as of July 6, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
The newly exempted subheadings are all drawn from the initial list of $34 billion in Chinese products covered by the tariffs. Unlike exclusions from Section 232 duties, all importers may take advantage of the Section 301 tariffs, not just those that filed the exclusion requests. The notice says CBP will “issue instructions on entry guidance and implementation.”
Fully exempt from Section 301 duties are subheadings 8412.21.0075, 8418.69.0120, 8480.71.8045, 8482.10.5044, 8482.10.5048, 8482.10.5052 and 8525.60.1010. These subheadings cover certain hydraulic power engines, drinking water coolers, injection molds, radial bearings and CB radio transceivers.
USTR also created partial exemptions for products of 15 other digit-subheadings that meet the additional requirements of product descriptions included in an annex to USTR’s notice. These partial exemptions include some outboard marine engines of subheading 8407.21.0080, some salad spinners in 8421.19.0000, some water filtration apparatus of 8421.21.0000, some winches of subheading 8425.39.0100, some elevators of subheading 8428.32.000, and some belt conveyors of 8428.33.0000.
Also partially excluded are some papermaking machinery and components found in subheadings 8419.90.2000, 8420.10.9080, 8439.99.1000 and 8439.99.1000, some work stands for miter saws of subheading 8466.92.5010, some angle cock handle assemblies of 8481.90.9040, some radiation therapy systems of subheading 9022.14.0000, and some thermostats for HVAC systems of subheading 9032.10.0030.
New subheading 9903.88.05 will be used for these products, as well as others excluded from the first tranche of Section 301 tariffs (i.e., those that would otherwise be covered by subheading 9903.88.01). The new provisions have yet to be added to the tariff schedule by the International Trade Commission as of press time. The new exclusions stem from about 1000 exclusion requests, and about 8,550 more requests are still pending, according to a list on USTR’s website. About 1,250 have been denied.
We have talked to attorneys involved in these cases and the good news is that USTR seems to be not setting an unreasonably high bar to achieving success in these request for exclusions, at least for products on List 1. Approval is possible. We are watching the current negotiations closely with the pending date of March 1st for either resolution with the Chinese government on their trade practices or the imposition of 25% tariffs on $200 billion worth of imports from China. We will continue to keep you advised of further developments