Alerts and Updates

U.S. Trade Representative Grants Additional Exclusions to Chinese-Origin Products Subject to Section 301 Tariffs

May 18, 2020

The USTR may consider extending the exclusion period beyond August 7. 

As we have previously reported, the U.S. Trade Representative (USTR) has announced expanded product exclusions during the fight against the spread of COVID-19 and the initial phase of the trade agreement signed with China in January 2020.

The latest notice of exclusions occurred on May 8, 2020, (85 FR No. 90, 27489 through 27505) and pertains to certain products of Chinese-origin that were subject to additional duties of 10 percent ad valorem, effective on September 24, 2018. In May 2019, the USTR increased the additional duty to 25 percent ad valorem. (84 FR 20459). On June 24, 2019, the USTR published notice establishing a process by which interested parties could request exclusion of particular products classified within an eight-digit HTSUS subheading covered by the September 24, 2018, action. Parties seeking exclusions were required to identify the product subject to the request in terms of the physical characteristics that distinguish it from other products within the eight-digit HTSUS. Additionally, parties had to provide the 10-digit HTSUS subheading most applicable to the particular product requested for exclusion.

In the Annex to the May 8 notice, the exclusions are reflected in two 10-digit HTSUS subheadings and 144 specially prepared product descriptions. The exclusions will apply from September 24, 2018, to August 7, 2020. The USTR may consider extending the exclusion period beyond August 7 and interested persons should remain diligent regarding any notices from USTR requesting comments on whether to grant or deny an extension beyond August 7. In addition, interested parties should remain diligent to Customs and Border Protection notices regarding procedures by which importers may seek refunds of additional duties that were imposed on products that are now subject to product exclusion.

The two specific HTSUS subheadings covered by the May 8 notice are 6902.20.5020 (certain refractory blocks, tiles and similar refractory ceramic constructional goods) and HTSUS 4819.50.4060 (certain packing containers, including record sleeves).

Because of the large number of product exclusions, we have identified below, for example purposes only, a few of the 144 specially prepared product descriptions covering excluded products. As noted by USTR, the exclusions are available for any product that meets the description in the Annex, regardless of whether the importer benefitting from the exclusion filed an exclusion request. As also noted by USTR, the scope of the exclusion is governed by the scope of the product description in the Annex and not by the product descriptions found in any particular request for exclusion.

Product exclusions include certain catalysts (HTSUS 3815.19.00.00); certain vibration control goods (HTSUS 4016.99.55.00); certain backpacks (HTSUS 4202.92.31.20); certain laminated flooring (HTSUS 4412.10.90.00); certain sinks and sink pedestals of natural granite for bathroom and kitchen use (HTSUS 6802.93.00.90); certain rear view mirrors for specific types of vehicles (HTSUS 7009.10.00.00); microscope slides (HTSUS 7017.90.10.00); certain laboratory glassware (HTSUS 7017.90.50.00); certain machine tool castings (8466.93.1560); certain reversing valves (HTSUS 8481.80.90.05); and certain other valves covered by HTSUS 8481.80.90.15.

In addition to the foregoing, the May 8 notice also contains certain amendments reflecting technical corrections to certain relevant notes of the HTSUS.

Also of importance, U.S. Customs and Border Protection has stated that “[t]o request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, but within 180 days of the liquidation action, importers may protest the liquidation.” See CSMS #41878462

About Duane Morris

Attorneys in the firm’s International Group have considerable experience in assisting clients in developing duty-saving strategies. Toward this end, Duane Morris attorneys have prepared numerous Section 301 product exclusion requests that have been granted by the USTR, and they have experience in assisting clients in filing submissions with CBP to obtain refunds on Section 301 duties that had previously been paid prior to the product exclusions being granted by the USTR.

Furthermore, the Duane Morris COVID-19 Strategy Team is advising clients on all aspects of the legal implications of COVID-19 including contractual, employment, insurance and healthcare issues.

For More Information

If you would like further information about this Alert or the procedures for seeking refunds from CBP relating to Section 301 product exclusions, please contact Brian S. Goldstein, Geoffrey M. Goodale, J. Manly Parks, Patrick C. Gallagher, Ph.D., Nathan B. Reeder, any of the attorneys in our International Group or the attorney in the firm with whom you in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.