Process for List 3 Exclusions from 25% Tariffs Announced

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Process for List 3 Exclusions from 25% Tariffs Announced

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21-Jun-19

Process for List 3 Exclusions from 25% Tariffs Announced

The US Trade Representative is publishing a process for requesting exclusions from the 25% tariffs which went into effect this month on the $200 billion of Chinese origin products from what is known as List 3. Exclusion requests can be filed between June 30, 2019 and September 30, 2019. Exclusions granted will be for a one year period and also be retroactive to September 24, 2018, the date the List 3 tariffs became effective at the 10% level. The information required for consideration of exclusion requests includes, among other details:

  • whether the product can be sourced from the U.S. or other non-China sources
  • whether the imposition of additional tariffs will cause economic harm to the importer or other U.S. economic interests
  • whether the particular product is related to the "Made in China 2025" or other Chinese industrial programs.

Exclusion requests must also now be filed through a new exclusion portal and will be posted online for public comment.

It is uncertain how long the process for making determinations on exclusion requests will take. List 3 contains some 6,000 different tariff items. Prior requests for exclusions involved far fewer items and thousands of requests were submitted. This means importers will have to monitor previously filed entries to make sure liquidated entries are set up for protests to protect importer rights to refunds.

We will continue to monitor this process and are available for questions importers may have. Please feel free to contact Priscilla Royster (priscillar@jsconnor.com) or Laurie Bichell (laurieb@jsconnor.com) for assistance. The Office of the United States Trade Representative plans to publish the following notice in the Federal Register in the next few days regarding the exclusion process for merchandise subject to List 3 of the Section 301 China Tariffs:

Procedures_for_Requests_to_Exclude_Particular_Products_from_the_September_2018_Action.pdf

Key points include the following. Please feel free to contact us (212)-557-4000 with any questions or concerns.

· Exclusion requests can be filed between June 30, 2019 and September 30, 2019.

· Granted exclusions will be effective for one year from the date of publication of the favorable decision AND will be retroactive to September 24, 2018 (i.e., the date the List 3 tariffs became effective). Companies that file exclusions will need to carefully monitor liquidation dates of entries made since last September and, if necessary, file protective protests. The exclusion process may take too long and the failure to protect your rights to a refund may result in your company being denied the benefit of a favorable decision for some entries.

· Exclusions must be submitted through a new exclusion portal and will be posted online for public comment (certain business confidential information may also be submitted separately).

· Exclusion requests should address the following points in addition to providing the required company and product specific information:

  • Whether the particular product is available only from China and whether the particular product and/or a coomparable product is available from sources in the United States and/or in third countries. The requester must provide an explanation if the product is not available outside of China or the requester is not sure of the product availability.

  • Whether the requester has attempted to source the product from the United States or third countries.

  • Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requester or other U.S. interests.

  • Whether the particular product is strategically important or related to "Made in China 2025" or other Chinese industrial programs.