UPDATE: CHINA 301 LIST 3 TARIFF INCREASE TIED TO DATE OF EXPORT; EXCLUSION PROCESS TO BE ISSUED

On May 8, 2019, the U.S. Trade Representative (“USTR”) issued a Notice confirming that Chinese-origin merchandise listed on Section 301, Tranche 3, will be subject to an increased additional tariff rate of 25% ad valorem. Importantly, the change will take effect with respect to goods:

1. entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on May 10, 2019, and
2. exported to the U.S. on or after May 10, 2019.

Those goods have been subject to an additional duty rate of 10% since September 24, 2018. We note that application of the increase to goods exported on or after the effective date is a departure from prior 301 notices.

In addition to the duty increase, the USTR will establish an exclusion process by which interested persons may request that products listed on Tranche 3 be excluded from the additional duties. The USTR will publish a separate notice describing the exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to exclusion requests. We note that similar processes were put in place for merchandise subject to Section 301, Tranches 1 and 2.

Companies interested in participating in the exclusion process, and exploring additional strategic responses to Section 301 duties, should contact our office and speak with one of our attorneys.

Full text of the USTR’s ‘Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation’ is available by clicking Here

J.W. Allen & Company computer systems have been updated to reflect the changes taking effect on May 10, 2019, and staff is presently in the process of contacting Importers whose business are impacted by this change.

If you have any questions regarding this matter, you are encouraged to contact J.W. Allen & Company personnel.