The Office of the U.S. Trade Representative (“USTR”) has published the procedures for an importer to request an exclusion from the first round of increased tariffs on Chinese goods, available here. See 83 Fed. Reg. 32,181-32,184 (July 11, 2018).  

Our previous blog post, available here, described the tariffs and why they are being imposed, in detail. To have covered goods or materials exempted from the higher duties, an importer has almost 90 days, until October 9, 2018, to file an exclusion request with the USTR. To do so, the filer must go to Docket No. USTR 2018-0025 at regulations.gov, available here.

Once there, an importer can complete a fillable PDF version of the request form, which, in addition to seeking information about the requestor, requires a physical description of the imported article, the article’s classification under the Tariff Schedule, and whether the article is available elsewhere. Also, there is a comments field, which gives the requestor an opportunity to discuss the adverse impact of the increased tariff, whether the concern is safety, availability, economic harm, quality, compliance with other law, etc. If the basis of the request requires divulging business confidential information, the USTR asks the filer to provide both public and non-public versions of the request form. Each sought article must have a separate exclusion request.

Once filed, the request will be publicly viewable on regulations.gov, and interested persons will have 14 days to provide comments for or against the request. Thereafter, the requestor will have seven days to respond to the public comments.  USTR has not provided an estimate of how long it will take to approve or deny a request. If a request is granted, the requestor will not have to pay the increased duty on imports of that product for one year, retroactively starting on July 6, 2018. Presumably, the importer will be able to re-apply for the exclusion at the end of the one-year period, but that remains to be seen.

Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.

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