In a notice published on June 20, 2018, the U.S. Trade Representative (USTR) announced the imposition of an additional ad valorem duty of 25 percent on products from China classified in the 818 subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) set out in Annex A of the notice in response to China’s alleged acts, policies, and practices related to technology transfer, intellectual property, and innovation included. Note that Annex B to the notice contains the same list of tariff subheadings, with unofficial descriptions of the types of products covered in each subheading.

The additional duties on these products took effect on July 6, 2018.

The June 20 notice also announced that the USTR would establish a process by which U.S. stakeholders may request that particular products classified within a covered tariff subheading be excluded from the additional duties.

On July 6, 2018, USTR issued a press release with a link to the soon-to-be published Federal Register Notice which explains the procedures and criteria related to requests for product exclusions. A docket for the receipt of exclusion requests will be established on regulations.gov.

The notice will be published in the Federal Register sometime during the week of July 9, 2018.

A key piece of information for importers is that “[a]ny exclusion will be effective starting from the July 6, 2018 effective date of the additional duties, and extending for one year after the publication of the exclusion determination in the Federal Register. In other words, an exclusion, if granted, will apply retroactively to the July 6 date of the imposition of the additional duties. USTR will periodically announce decisions on pending requests.”

Key Dates

  • Interested parties will have 90 days to file a request for a product exclusion; and
  • The request period will end on October 9, 2018.

Rationale for Requested Product Exclusion

Each request should explain the following factors:

  • Whether the particular product is available only from China. In addressing this factor, requesters should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries;
  • Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other U.S. interests; and
  • Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

Process Timeline

  • Following public posting of a request on Regulations.gov, the public will have 14 days to comment on a certain product exclusion request; and
  • After the close of the 14 day response period, interested persons will have an additional 7 days to reply to any responses received in support of or opposition to the request.

Highlights

The notice includes information on:

  • How to identify products in the exclusion request;
  • Submission Instructions – to include the submission of business confidential information; and
  • Document Format Instructions.

 

 

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