Alerts and Updates
USTR Grants Additional Section 301 Product Exclusions ‒ But Companies Must Act Quickly to Take Full Advantage of Them
June 25, 2020
The USTR likely will publish further notices in the Federal Register in the near future seeking comments on whether to extend the product exclusions announced in the May 28 and June 12 notices.
In its ongoing review of the many thousands of Section 301 exclusion requests that have been submitted, the Office of the U.S. Trade Representative (USTR) has recently granted numerous exclusions to a wide range of Chinese products. As discussed below, future imports of the identified products will not be subject to Section 301 duties for the time periods specified in the notices issued by the USTR, and any company may seek refunds on the Section 301 duties it previously paid for the identified items, even if the company was not the one that filed a Section 301 exclusion request with the USTR.
On June 12, 2020, the USTR announced that it was granting numerous Section 301 product exclusions, which are identified by their 10-digit HTSUS codes and specifically prepared product descriptions. Some of the excluded products include, among other things, certain kneeling pads of plastics (3924.90.5650), certain printed books in the Chinese language (4901.99.0093) and certain gloves cut and sewn of machine knitted fabric (6116.10.5520). The full list of excluded products can be found in the Annex of the Federal Register notice published on June 12. In the notice, the USTR stated that the identified product exclusions would retroactively apply as of September 1, 2019, which was the date that Section 301 duties were initially imposed on the covered products, and that the exclusions would extend to September 1, 2020.
Previously, on May 28, 2020, the USTR announced that it was granting exclusions for a wide range of other Chinese-origin products. Among other things, these products included certain flooring planks of specified dimensions (4411.13.2000), certain wood dowel pins of varying dimensions (4421.99.1500) and certain polypropylene roofing materials (4602.90.0000). The complete list of excluded products can be found in the Annex of the Federal Register notice published on May 28. In the notice, the USTR stated that the identified product exclusions would retroactively apply as of September 24, 2018, which was the date that Section 301 tariffs were initially imposed on the covered products, and the exclusions would extend to August 7, 2020.
The Section 301 product exclusions that the USTR announced on June 12 and May 28 are not company-specific in nature. As such, in addition to the companies that filed the granted exclusion requests, any company that imports any products covered by the terms of the product exclusions and has paid Section 301 duties on such products can seek a refund of those duties from U.S. Customs and Border Protection (CBP).
CBP has stated that “[t]o request a refund of Section 301 duties paid on previous imports, 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 #42049352.
On June 2, 2020, the USTR also announced that it would extend the duration of certain previously granted Section 301 product exclusions. The identified product exclusions that were extended had originally been granted by the USTR in a notice published in the Federal Register on June 4, 2019. Subsequently, the USTR announced that it would consider requests to extend these product exclusions in a notice published in the Federal Register on March 20, 2020. Ultimately, based on submissions that it received by April 30, 2020, the USTR decided to grant extensions for certain product exclusions and announced its determinations in a notice it published in the Federal Register on June 2, 2020. Among other items, USTR has extended product exclusions for certain oil well and field long-stroke and beam pumps (8413.50.0010), certain centrifugal pumps (8413.70.2004) and certain submersible pumps incorporating a magnetic drive motor (8413.70.2004). The full list of product exclusions that were granted extensions can be found in the Annex to the June 2 notice. Pursuant to the June 2 notice, the identified product exclusions have been extended from June 4, 2020, to December 31, 2020.
The USTR likely will publish further notices in the Federal Register in the near future seeking comments on whether to extend the product exclusions announced in the May 28 and June 12 notices referenced above. Given the process that was used for the product exclusions extended via the June 2 notice discussed above, companies that seek any of the May 28 or June 12 product exclusions to be extended will need to pull together significant amounts of data to submit to the USTR. The kinds of information that must be included in such submissions are discussed in detail in one of our recent Alerts.
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, including protests, with CBP to obtain refunds on Section 301 duties that had previously been paid prior to the product exclusions being granted.
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 or the process for claiming an exclusion, please contact Geoffrey M. Goodale, Brian S. Goldstein, Michael E. Barnicle, J. Manly Parks, Nathan B. Reeder, any of the attorneys in our International Group or the attorney in the firm with whom you are regularly in 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.