Alerts and Updates
USTR to Review Hundreds of Previously Granted Section 301 Exclusions
May 11, 2020
Comments must be submitted to the USTR by June 8, 2020.
Since our May 4, 2020, Alert, the Office of the United States Trade Representative (USTR) has announced that it will accept public comments on whether to continue or end hundreds of additional Section 301 product exclusions that it has previously granted. As discussed below, comments must be submitted to the USTR by June 8, 2020. If the USTR determines to not continue the exclusions, each product will become subject to Section 301 duties at a rate of 25 percent.
Initial Product Exclusions Were Granted Between August 2019 and March 2020
The Section 301 product exclusions the USTR is seeking comments on, pursuant to the May 6 Federal Register notice, were granted between August 7, 2019, and March 26, 2020. Specifically, the product exclusions were announced by means of the following subject notices.
• 84 Fed. Reg. 38717 (August 7, 2019)
• 84 Fed. Reg. 49591 (September 20, 2019)
• 84 Fed. Reg. 57803 (October 28, 2019)
• 84 Fed. Reg. 61674 (November 13, 2019)
• 84 Fed. Reg. 65882 (November 29, 2019)
• 84 Fed. Reg. 69012 (December 17, 2019)
• 85 Fed. Reg. 549 (January 6, 2020)
• 85 Fed. Reg. 6674 (February 5, 2020)
• 84 Fed. Reg. 9921 (February 20, 2020)
• 85 Fed. Reg. 15015 (March 16, 2020)
• 85 Fed. Reg. 17158 (March 26, 2020)
Given that the above 11 subject notices embrace so many specially prepared descriptions and additional products covered by numerous 10-digit HTSUS subheadings, it is urged that interested parties examine each of the subject notices to determine the impact of the USTR’s proposed action upon its business interests.
For illustrative purposes only, some of the products covered by the subject notices include, among other things: certain laminated wood flooring panels (4412.99.5105); certain fuel pumps for internal combustion, spark ignition piston engines (8413.30.9030); certain mouse input devices valued over $70 for ADP machines (8471.60.9050); certain single speed bicycles (8712.00.2500); certain imitation leather fabrics (5903.10.2090); certain kerosene air heaters (7322.90.0015); various hand operated butterfly valves (8481.80.3030); certain bicycle frames of carbon fiber, valued at $600 or less (8714.91.3000); certain electric display cases incorporating refrigerating equipment designed for commercial use, each with a glass front to display the food or drink being stored (8418.50.0080); certain electronic calculators (8470.10.0040); and certain electric household table or desk lamps, made of ceramics (9405.20.8010). To reiterate, this is merely an illustrative list; the full list of products can be found in each of the subject notices.
Criteria to Be Used by the USTR in Evaluating Whether to Continue Product Exclusions
The USTR will evaluate the possible extension of each exclusion on a case-by-case basis. The USTR’s evaluation will focus on among other things:
- Whether the product (or a comparable product) is available in the United States or from countries other than China;
- Any changes in the global supply chain for that product since September 2018 (or any other relevant industry developments);
- The efforts, if any, by affected importers or U.S. purchasers since September 2018 to source the product from the United States or third countries;
- Whether the product covered by the exclusion is subject to an antidumping or countervailing duty order issued by the U.S. Department of Commerce; and
- If the imposition of additional duties will result in severe economic harm to the commenter or other U.S. interests.
Importers and purchasers of a Chinese product should also be prepared to discuss whether it is sold as a final product or as an input. They should be able to identify the quantity and value of the subject imports in 2018 and 2019 and should identify whether or not the purchases are from a related company. In disclosing the value of the Chinese-origin product, parties should also be prepared to discuss whether their Chinese suppliers have lowered prices for the product following the imposition of the Section 301 duties on the product. In addition, parties should be able to provide the values and quantities of the same or similar products purchased domestically or from third countries, if applicable.
As stated in the subject notices, comments must be filed via the USTR’s web portal by June 8 at 11:59 p.m. Eastern time.
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.
For More Information
If you would like further information about this Alert and the process for seeking to have Section 301 product exclusions be extended, please contact Brian S. Goldstein, Geoffrey M. Goodale, Michael E. Barnicle, 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.