On July 6, 2018, the United States implemented retaliatory tariffs of 25 percent on U.S. imports of approximately 800 Chinese products covering an estimated trade value of $34 billion in 2018. Pursuant to its Section 301 investigation into “China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” the Office of the U.S. Trade Representative (USTR) announced its determination to implement the tariffs in a June 20, 2018 Federal Register notice (see Annex B of the notice for the full list of covered HTSUS Codes). The USTR indicated that products under these HTSUS codes “contain products identified as benefitting from China’s industrial policies, including the ‘Made in China 2025’ program.”
With these tariffs in place, the USTR announced on Friday that it is instituting a request process for U.S. parties to seek the exclusion of any product subject to this additional duty. In a notice to be published in the Federal Register, the USTR provided the criteria and detailed guidance for any product exclusion request application. The USTR will consider “whether a product is available from a source outside of China, whether the additional duties would cause severe economic harm to the requestor or other U.S. interests, and whether the particular product is strategically important or related to Chinese industrial programs including ‘Made in China 2025.’” Each request must specifically identify a particular product, and provide supporting data and the rationale for the proposed exclusion. The USTR will not consider product requests using criteria that cannot be made available to the public. Each request will be evaluated on a case-by-case basis.
Parties interested in this Section 301 product exclusion process should be aware of the following dates and features of the process:
- The public will have 90 days to file a request for a product exclusion; the request period will end October 9, 2018.
- After a request is posted on regulations.gov under Docket USTR-2018-0025, the public will have 14 days to file responses to the request for product exclusion. After the close of the 14-day response period, interested parties will have an additional seven days to reply to any responses received in support of or opposition to the request.
- Exclusions will be effective for one year upon the publication of an affirmative exclusion determination in the Federal Register, and will apply retroactively to July 6, 2018.
Once Docket USTR-2018-0025 is activated, the USTR will post a request form in the “Supporting Documents” section. While the form is not required, the USTR strongly recommends that interested parties use the form to submit exclusion requests.
Because exclusions will be made on a product basis, a particular exclusion will apply to all imports of the product, regardless of whether the importer filed a request. U.S. Customs and Border Protection will apply the tariff exclusions based on the product.