Beginning June 17, 2019, the Office of the U.S. Trade Representative (“USTR”) held seven days of public hearings on proposed tariffs on an additional $300 billion of Chinese imports. If imposed, these proposed tariffs, known as “List 4”, would be the fourth round of tariffs imposed by the Trump Administration in connection with its trade action against China. (Editor’s Note: For additional information on the outcome of the meeting between Presidents Trump and Xi at the G-20 summit in Osaka, Japan (including a pause on imposition of the List 4 tariffs), please see our second article). Hundreds of witnesses representing numerous industries participated in the hearing, including representatives from the Semiconductor Industry Association, the U.S.-China Business Council, the National Association of Manufacturers, the U.S. Fashion Industry Association, and the American Chemistry Council.
On June 20, 2019, USTR posted on its website a notice announcing an exclusion process for the Section 301 tariffs imposed on Chinese-origin goods in September 2018 (“List 3”). This exclusion process will enable stakeholders to request that specific products be excluded from the 25 percent tariff currently applied to the Harmonized Tariff Schedule (“HTS”) categories included on List 3. USTR previously has administered exclusion rounds for Chinese-origin products classified within the HTS categories on Section 301 Lists 1 and 2, but that exclusion process is now closed. Importantly, the List 3 exclusion process will be unique insofar as it will be administered through an electronic portal. Interested parties may submit exclusion requests through the exclusion portal beginning June 30, 2019 at 12:00 pm EDT. The deadline for submitting List 3 exclusion requests will be September 30, 2019.
Each party submitting an exclusion request will be asked to provide information describing the product for which an exclusion is sought, the rationale for the requested exclusion, and other information to help USTR evaluate how the additional duties may impact the requester.
Interested parties may file responses or objections to any exclusion request submitted to USTR. Interested parties will have 14 days to respond or object to an exclusion request posted on the List 3 exclusion portal. All responses or objections will be publicly viewable. Finally, the party that filed the initial exclusion request will have an opportunity to reply to any responses or objections filed against an exclusion request. Any such reply comments must be submitted on the List 3 exclusion portal no later than 7 days after the close of the 14-day response or objection period.
Consistent with previous exclusion processes, any granted exclusion will be effective starting from the effective date of the List 3 action, which was September 24, 2018, and will extend for one year after the publication of the exclusion determination in the Federal Register. It is also important to understand that any importer may benefit from an exclusion granted by USTR as long as the product at issue matches the description in USTR’s notice. This underscores the importance of potentially interested parties actively monitoring the exclusion requests.
