As you are aware, the exclusion process for List 3 is now openuntil September. We have received a lot of exclusion requests and I thought I’d share the information the US Trade Representative (USTR) requires in order to review an exclusion request:
1. 10-digit subheading of the HTSUS applicable, use 8/10 digits (if there are different HTSUS 8 and 10 digit codes used, we will need a separate request)
2. Product name
3. Detailed description of the product: (1) physical characteristics (e.g., dimensions, weight, material composition, etc.). (2) Requestors may submit a
range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with
similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.
4. The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any
unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requestors may submit attachments that
help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a
Requestor’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the
product using criteria that cannot be made available for public inspection.
5. Requestors must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data
on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the Requestor purchased, in 2017, 2018,
and the first quarter of 2019.
6. Requestors must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019.
7 For imports sold as final products, Requestors must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product
8. For imports used in the production of final products, Requestors 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. Required
information regarding the Requestor’s purchases and gross sales and revenue is BCI and the information entered will not be publicly viewable.
9. Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources
in the United States and/or in third countries. The Requestor must provide an explanation if the product is not available outside of China or the Requestor
is not sure of the product availability.
10. Whether the Requestor has attempted to source the product from the United States or third countries.
11. Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the
Requestor or other U.S. interests.
12. Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
If you have any questions about the exclusion request process, contact experienced attorney trade attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org.
According to the Associated Press, earlier today, China threatened the US with retaliation if Trump goes through with his threat to impose sanctions on “List 4” of goods from China on September 1st.
The primary issues of disagreement between the US and China are the forced technology transfers that are required by US companies doing business in China in addition to the lack of intellectual property protections for companies doing business in China. Additionally, the US has also expressed concerns over China’s 2025.
At the current time, the US has imposed tariffs over $250 billion in Chinese imports while the China has imposed tariffs on over $110 billion in US goods. The proposed September 1st tariffs cover over $300 billion in goods – effectively covering all imports of goods from China. The US government may have an upper hand as China only imported about $160 billion in US goods – a number that highlights the unequal trade balance ($160 billion versus $550 billion).
It will be interesting to see how China retaliates, they can only threaten to impose an additional $50 billion in tariffs on US goods, only 1/6th of the what the US can impose.
Two big newsworthy events happened over the weekend at the G20 summit. First, Trump said US companies could supply to Huawei (waiting for official guidance at the moment) and second, the US and China agreed to not enact any further tariffs (current proposed Section 301 List 4 duties) in the near future and to start a new round on trade talks.
This may sound like Groundhog Day, and it partially is. Last year at the Argentina G20 summit, Trump and Xi also reached a similar agreement. And the differences that prevented a deal to be reached in Argentina also exist today. Key issues such as intellectual property and China’s 2025 plan are two areas where the two countries still do not reach a consensus.
With an election looming a little over a year away, Trump may be waiting until after next November before moving forward with a final deal – in the meantime, Trump says the US is already benefiting from the tariffs as the US is “taking in a fortune”.
If you have any questions about any of the 232 or 301 duties and how they may impact your business. Contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at email@example.com, firstname.lastname@example.org.
According to CNBC, President Trump says he will delay additional China tariffs originally scheduled to start on March 1. In a series of posts on Twitter, President Trump indicated a delay for the imposition of “List 3” of duties under Section 301 because of “substantial progress” in trade talks currently underway between the US and China.
While the tweets hint at a delay, there was no hint of a revised deadline to reach an agreement with China. Time will tell whether the US and China can reach an agreement on the key issues of intellectual property protection and forced technology transfer.
In other news, a late March meeting between President Trump and Chinese President Xi Jinping will likely occur at Trump’s Mar-a-Lago golf club in Palm Beach, Florida.
More updates will be posted as they became available.
Since “List 1” of the tariffs on Chinese goods became effective on July 6th, we’ve had many calls from importers, forwarders and brokers on the best practices moving forward. Here’s a quick summary of what any importer should do regarding their imports of Chinese goods –
- Apply for a company-specific exclusion from the tariffs. The U.S. Department of Commerce (Commerce) has published procedures for doing so on their website. The current approved exclusions are from steel tariffs with more exclusions to follow as Lists 2 and 3 take effect likely later this year.
- Review your classifications of imported merchandise. There may be more appropriate HTSUS numbers that your merchandise can be entered under and not subject to duties.
- Companies can also use the rules of origin to see if imported merchandise can be from another country other than China. This could result from moving the manufacture location, or moving the location of the “substantial transformation” of those goods.
- Adjust the valuation of the merchandise. See if the imported goods are properly valued.
- If merchandise is imported to the US for export out of the US, be sure property TIB, IT, T&E bonds are filed.
- No one likes surprises – it is best for importers, compliance, supply chain, sales and accounting to notify company management of potential tariff changes and the economic impact these new tariffs will have on profit and costs.
If you have any questions or want to know how your company can protect itself from these new duties, contact experienced trade attorney David Hsu at 832.896.6288 or by email at email@example.com.