The Office of the U.S. Trade Representative (USTR) has announced in a Federal Register notice that it will open an electronic portal for submission of China Section 301 product exclusion requests on June 30, 2019. This portal will allow interested U.S. parties to request exclusions for products captured under USTR’s Tranches/List 3 of Harmonized Tariff Schedule of the United States (HTS) subheadings for imports from China valued at $200 billion.
Product exclusion requests will be due through the portal at https://exclusions.ustr.gov (the website is not yet live) by September 30, 2019; parties supporting or objecting to such exclusion requests must file responses no later than 14 days after the request is posted on the portal. Any replies to these responses will be due the later of seven days after the close of the 14-day response period, or seven days after the posting of a response on the portal.
While both the process and the exclusion request form for submission to USTR are similar to those implemented for USTR’s Tranches/Lists 1 and 2 of HTS subheadings, this exclusion request process requires additional information. In addition to providing the applicable 10-digit HTS subheading, product name and specific description and function, and providing supporting data and the rationale for the requested exclusion, USTR will also require:
- specific data on the annual quantity and value of the Chinese-origin product, domestic product and third-country product the requester purchased, in 2017, 2018 and the first quarter of 2019. Note: the requirement to identify and report domestic and third-country product data is new.
- the requester’s gross revenues for 2018, the first quarter of 2018 and the first quarter of 2019.
- for imports sold as final products, requesters must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product accounted for.
- for imports used in the production of final products, requesters must provide the percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for.
As with past exclusion requests, USTR will require that all requests clearly address whether the particular product is available only from China or can be sourced from the United States or third countries; whether the requester has sought to source the product from the United States; whether the additional duties have caused or will cause severe economic harm to the requester; and whether the particular product is strategically important or related to the “Made in China 2025” initiative or other Chinese industrial programs.
Exclusions will be retroactive to September 24, 2018, when the tariffs on this tranche of HTS subheadings were implemented with a 10 percent tariff (these tariffs have since been raised to 25 percent). Granted exclusions will be valid for one year from the date that the exclusion determination is published in the Federal Register.