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On March 28, 2022, the Office of the United States Trade Representative (“USTR”) announcement the reinstatement of Section 301 exclusions for certain products.
Following the Section 301 investigation initiated in 2017, the USTR imposed additional duties on Chinese products in four tranches: List 1 (announced June 20, 2018), List 2 (announced June 16, August 2018), List 3 (announced September 21, 2018 and amended September 28, 2018) and List 4A (announced August 20, 2019 and amended December 28, 2019) of Section 301 China Tariffs. For each tranche, the USTR established a process by which U.S. stakeholders could request the exclusion of particular products that were otherwise subject to the action. Exclusions were granted for each listing and first expired between December 2019 and October 2020. To address the expiration issue, in November 2019 the USTR established processes for submitting public comments on the opportunity extend specific exclusions. Pursuant to these processes, the USTR has extended, subject to further delays, a total of 549 debarments. Later, with the exception of the COVID-19-related disqualifications, the extended disqualifications again expired either on December 31, 2020 or in 2021, bringing the attention of Congress to the issue of further extension.
On October 8, 2021, the USTR invited public comment on whether certain exclusions should be reinstated. The USTR has announced that it will consider the following factors when making its determination:
- Whether the particular product and/or a comparable product is available from sources in the United States and/or third countries.
- Any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry development.
- Efforts, if any, that U.S. importers or buyers have undertaken since September 2018 to source product from the U.S. or third countries.
- National capacity to produce the product in the United States.
The USTR also considered whether reinstating the exclusion “would impact or result in serious economic harm to … U.S. interests … as well as the overall impact of the exclusions on the goal of obtaining the elimination of China’s acts, policies and practices covered in the Section 301 investigation.”
Following the public notice and comment process, the USTR announced that it is reinstating 352 Section 301 product exclusions through December 31, 2022. The exclusions apply retroactively, particularly to goods entered for consumption or withdrawn from warehouse for consumption, on or after 12:00 a.m. Eastern Daylight Time, October 12, 2021, which are not liquidated, or to entries which are liquidated, but within the time of protest described in Section 514 of the Tariff Act of 1930.
Per U.S. Customs and Border Protection (“CBP”) guidance issued March 31, 2022, reinstated exclusions can be claimed using U.S. Harmonized Tariff Schedule 9903.88.67 (HTSUS) and are available for any product that meets the description in the product exclusion as listed in Appendix A of 87 FR 17380. Imported goods using the reinstated exclusions must also include the usual HTSUS classification for the imported good. Refunds of Section 301 duties paid on previous imports of goods now subject to the reinstated exclusions may be obtained by filing a Post Summary Correction (“PSC”) within the PSC filing deadline, or by protesting against liquidation if within the time limit for filing the protest.
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This article by Mayer Brown provides information and commentary on interesting legal issues and developments. The foregoing is not a complete treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action regarding the matters discussed here.
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