Section 301 Investigation

The Office of the U.S. Trade Representative (USTR) previously announced a process to obtain product exclusions from the additional tariffs in effect on certain products imported from China under the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property. The 301 lists of products subject to tariffs was determined by a 90-day process that included public hearings and a notice and comment period. You can also find an unofficial spreadsheet with the final 301 lists here.

The USTR also provided an opportunity for the public to request the exclusion of a particular product from the additional duties in order to address situations that warranted excluding a particular product within a subheading, but not the tariff subheading as a whole.

All posted exclusion requests can be found on: https://www.regulations.gov/docket?D=USTR-2018-0025.

The USTR recently announced that it is still in the process of posting exclusion requests due to the high volume of submissions, and therefore there is currently a lag between the filing of an exclusion request and the posting of an exclusion request when public and confidential versions are been filed. The date of posting is the triggering date for initial comments regarding an exclusion requests.  Permissible comments include letters of support as well as opposition.  After the comment period is closed, an additional deadline will be established for rebuttal comments.

As of the date of this report, 815 exclusion requests have been denied.

None have been granted.

We hope you find this report helpful and please contact us if you have any questions.

 

 

 

 

 

 

 

 

 

 

Last updated on 10/30/2018: Added South Africa’s Section 232 steel and aluminum exemptions.

Unofficial spreadsheet with Final 301 list, partial list, and HTS’ removed added.

U.S. Trade Actions

Action Covered Products Rate Increase Effective Date
Section 232 Steel and Aluminum Steel – 25%
Aluminum – 10%
6/1/2018
Status: Steel – all countries of origin except South Korea, Brazil, and Argentina (agreed to quotas); and Australia (exempted).

Aluminum – all countries of origin except Argentina (agreed to quota); and Australia (exempted).

Beginning August 13, steel articles covered by Section 232 from Turkey are subject to an ad valorem duty rate of 50%.

On October 24, South Africa was granted exemptions on 161 aluminum and 36 steel products by the Commerce Department.

Section 232 Autos and Automotive Parts TBD TBD
Status: For the latest status, please click here.
Section 301 For the final list of products in List 1, please click here.

For the final list of products in List 2, please click here.

For the final list of products in List 3, please click here.

25%

 

25%

 

10%

25%

7/6/2018

 

8/23/2018

 

9/24/2018

1/1/2019

Status: List 1 totaling $34 billion worth of imports is composed of 818 tariff lines, and went into effect on 7/6/2018.

List 2 totaling $16 billion worth of imports was originally composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. 279 of the 284 lines went into effect on 8/23/2018.

For full details on List 2, please click here.

List 3 totaling approximately $200 billion of imports was originally composed of 6,031 tariff lines. 5,745 full and partial lines go into effect on 9/24/2018.

For full details on List 3, please click here.

Unofficial searchable and filterable spreadsheet with Current U.S. Section 301 Tariff Lists (Updated for Final List 3)

Retaliatory Actions

 

Canada For covered products, please click here. Table 1 – 25%
Table 2 – 10%
Table 3 – 10%
7/1/2018
Status: The Canadian government received over 1,000 submissions of public feedback during public consultations on its original list.

Canada is imposing countermeasures against C$16.6 billion in imports of steel, aluminum, and other products from the U.S., representing the value of 2017 Canadian exports affected by the U.S. tariffs.

EU For covered products, please click here. Annex I – 10% or 25%
Annex II – 10% – 50%
Annex I – 6/22/2018
Annex II – 3/23/2018 or 5th day after WTO Dispute Settlement Body rules against the U.S. action, whichever is first.
Status: For the latest status, please click here.
Mexico For the translated list of covered products, please click here. 7% – 25% (pages 1-4)

 

10% – 15% (page 5)

6/5/2018

7/5/2018

Status: Most retaliatory measures effective as of 6/5/2018. An “exception” list is effective on 7/5/2018.
China (Response to Section 232 Tariffs) For covered products, please click here. Annex I – 15% – 25% 4/3/2018
Status: See above.
China (Response to Section 301 Tariffs) For covered products in List 1, please click here.

(Unofficial Version)

25% 7/6/2018
For covered products in List 2, please click here.(Unofficial Version) 25% 8/23/2018
For covered products in List 3 (announced August 3), please click here.(Unofficial Version) Annex 1 and 2 – now 10%

Annex 3 – now 5%

Annex 4 – remains 5%

(Originally 1-3 were 25, 20, and 10 percent, respectively)

9/24/2018
Status: List 1 is composed of 545 tariff lines, and goes into effect on 7/6/2018.

List 2 contains 333 tariff lines on U.S. goods worth $16 billion. Start date is 8/23/2018.

List 3 contains 5,207 tariff lines on U.S. worth $60 billion. Start date is 9/24/2018.

India For covered products, please click here. Up to $10.6 billion;
Annex I – 5% – 100%
6/21/2018
Status: The U.S. declined India’s request for WTO consultations. Thus leading to India’s retaliation tariffs on U.S. goods, effective immediately.
Japan For covered products, please click here. Up to $1.91 billion TBD – no earlier than March 23, 2021, or the 5th day following the date of a decision from the WTO DSB, whichever comes first.
Status: No update since May 18, 2018. Ambassador Lighthizer is holding trade talks with Economy Minister Motegi in July. Under Secretary McKinney is also leading a trade mission to Japan to discuss a possible bilateral trade deal.
Russia For covered products, please click here. Up to $3.16 billion TBD
Status: Russia will apply the proposed suspension of equivalent concessions upon the expiration of 30 days from the day on which Council on Trade in Goods has been notified. The suspension will continue until the U.S. lifts the safeguard measures.
Turkey For covered products, please click here. Up to $1.78 billion;
Annex I – 5% – 40%
6/21/2018
Status:

Update on 10/15/2018: certain HTSUS subheadings covered by the supplemental action were modified as of October 1, 2018. This notice conforms the September 21 supplemental action to the HTSUS modifications in the Presidential Proclamation and amends the prior action taken in the investigation by removing certain subheadings of the HTSUS listed in Annex A to the September 21st Notice. 83 FR 49153.

Update on 8/22/2018: added the Government of Turkey’s WTO response to the U.S.’ doubling of tariffs on steel articles covered by Section 232 imported from Turkey.

Update on 8/16/2018: added link to Federal Register Notice formalizing China List 2 Section 301 tariffs.

Update on 8/14/2018: added new Section 232 tariff of 50% on steel from Turkey.

Update on 8/8/2018: added China’s retaliatory tariffs on $16 billion – List of affected HTS Subheadings includes additional 219 tariff items, plus tariff rate of 25%.

Update on 8/7/2017: added USTR’s final list of covered products for Section 301 List 2 tariffs with 25% tariff rate.

Update on 8/3/18: added China’s latest Section 301 (List 3) retaliatory tariffs.

Update on 8/2/2018: changed the proposed rate for China Section 301 List 3 from 10 percent to 25 percent.

Update on 7/13/2018: added link to an unofficial searchable and filterable spreadsheet listing the tariff codes for all three current U.S. Section 301 tariff lists (see last line in Section 301 Status).

Update on 7/11/2018: added new U.S. Section 301 tariffs announced on 7/10/2018.

Update on 7/2/2018: added EU Annex I tariffs effective.

Update on 6/29/2018: added Canadian retaliatory tariffs.

Update on 6/21/2018: added India, Japan, Russia, and Turkey.

Update on 6/18/2018: added China’s Section 301 retaliatory tariffs.

Update on 6/15/2018: added new U.S. Section 301 tariffs; added translated version of Mexican retaliatory measures and updated Mexico section.

Update on 9/18/2018: added the final list of products in List 3, its tariff rate of 10 percent, effective date of 9/24/2018, and tariff rate of 25 percent effective on 1/1/2019. Also, China’s retaliatory action for the new tariffs has been updated. The tariff rates changed for three of the four annexes. The new tariffs are effective on 9/24/2018.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Office of the U.S. Trade Representative (USTR) is holding public hearings from August 20 to August 24, 2018, and on August 27, 2018, regarding the proposed tariffs on approximately $200 billion worth of Chinese products.

Click here to view a schedule of witnesses. The public hearings are being held at the following times at the U.S. International Trade Commission in Washington, DC:

  • Monday, August 20, 2018 from 9:30 AM – 6:00 PM EDT
  • Tuesday, August 21, 2018 from 9:30 AM – 6:00 PM EDT
  • Wednesday, August 22, 2018 from 9:30 AM – 6:00 PM EDT
  • Thursday, August 23, 2018 from 9:30 AM – 6:00 PM EDT
  • Friday, August 24, 2018 from 9:30 AM – 6:00 PM EDT
  • Monday, August 27, 2018 from 9:30 AM – 4:00 PM EDT

According to a USTR press release, the proposed tariffs are in response to China’s unfair trade practices related to technology transfer, intellectual property, and innovation, based on the findings in USTR’s investigation of China under Section 301 of the Trade Act of 1974.

Tariffs on $34 billion in goods from China are currently in effect, and tariffs on an additional $16 billion will take effect on August 23, 2018.

The Federal Register notice publishing the proposed tariff list and soliciting public comment can be viewed here.

 

 

NOTE – this post was updated on 9/19/2018 to reflect the change in retaliation duties on affected U.S. goods.

In a press release issued on August 1, United States Trade Representative (USTR) Robert Lighthizer announced the President directed him to consider increasing the proposed level of the additional duty on the latest Section 301 List (List 3 worth $200 billion) from 10% to 25%.

On August 3, China responded in kind and threatened to increase retaliatory tariffs on $60 billion in U.S. goods should President Trump move forward with new tariffs on imports from China.

In addition to USTR’s proposed action on List 3, the second U.S. Section 301 List (worth $16 billion) just finished a public comment process. The White House has not announced its decision on List 2 as of yet. For an overview of the current U.S. Section 301 tariff status, please click here.

On 9/19/2018, China announced the rates would be 5 or 10%, instead of 5, 10, 20, or 25%.

Please click here for an unofficial version of the HTS Subheadings for Annex 1 (10% instead of 25%).

Please click here for an unofficial version of the HTS Subheadings for Annex 2 (10% instead of 20%).

Please click here for an unofficial version of the HTS Subheadings for Annex 3 ( 5% instead of 10%).

Please click here for an unofficial version of the HTS Subheadings for Annex 4 remain set at 5%.

 

 

 

 

 

On August 16, 2018, the Office of the U.S. Trade Representative (USTR) published in the Federal Register the formal notice for the China Section 301 tariffs beginning on August 23.

The USTR published the final list of 279 Harmonized Tariff Schedule of the United States (HTSUS) subheadings known collectively as ‘List 2’ on August 7, 2018. These tariff lines will see an additional ad valorem duty of 25% on products from China and is worth $16 billion.

Unlike the notice implementing List 1 from June 20, 2018, the USTR:

  • Added to Annex A of this notice clarifications on the application of the additional duties to goods entered under certain provisions of Chapter 98 and 99 of the HTSUS;
  • In Annex C to this notice, modifies the HTSUS note in Annex A to the June 20 notice in order to reflect these clarifications; and
  • Annex C makes a conforming amendment to the HTSUS heading in Annex A to the June 20 notice, and makes a technical correction to the HTSUS note in Annex A to the June 20 notice.

The tariff subheadings in Annex A and B are the same. The latter list includes unofficial descriptions of the types of products covered in each subheading.

Regarding product exclusions, the notice states, “…the Trade Representative has determined that USTR will establish a process by which U.S. stakeholders may request that particular products classified within an HTSUS subheading listed in Annex A be excluded from these additional duties. The process will be comparable to the exclusion process established in connection with the initial, $34 billion trade action. USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request.”

Check here for the latest developments on all the on-going trade actions.

 

President Trump has directed the Office of the United States Trade Representative (USTR) to consider increasing the proposed tariffs under Section 301 from 10% to 25% for the entire $200 billion list (also known as “List 3”). Because of this, the USTR has extended several of the dates in the public comment process.

The USTR circulated an e-mail on August 2 to parties that had submitted a request to appear in the upcoming Section 301 hearing for the “List 3” products. In it, the USTR clarified information provided in a press release on August 1.

To summarize:

  • The due date for filing requests to appear and a summary of expected testimony at the public hearing and for filing pre-hearing submissions is extended from July 27 to August 13, 2018.
  • The due date for submission of written comments is extended from August 17 to September 5, 2018.
  • The due date for submission of post-hearing rebuttal comments is also extended from August 30 to September 5, 2018.
  • The scheduled start date of the Section 301 hearing (August 20) has not changed.
    • The Section 301 Committee may extend the length of the hearing depending on the number of additional interested persons who request to appear. As of now, the hearing is scheduled to take place from August 20 to August 23.
    • The USTR will provide the full hearing schedule the day before the hearing, per USTR policy.

 

 

 

 

On July 24-25, 2018, the Office of the United State Trade Representative (USTR) held public hearings regarding proposed tariffs on approximately $16 billion of Chinese products.

Rebuttal comments are due on Tuesday, July 31, 2018.

The list identifying these products (also known as “List 2”) was released last month and represents 284 new tariff lines identified by the interagency Section 301 Committee as “benefiting from Chinese industrial policies, including the “Made in China 2025” industrial policy.”

Section 301 For covered products in List 1, please click here. 25% 7/6/2018
For covered products in List 2, please click here. TBD TBD
For covered products in List 3, please click here and see Annex 10% TBD
Status: List 1 totaling $34 billion worth of imports is composed of 818 tariff lines, and went into effect on 7/6/2018.

List 2 totaling $16 billion worth of imports is composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. This was the subject of the hearings.

List 3 includes a list of tariff lines of products from China with an annual trade value totaling approximately $200 billion. These are also subject to a public review process.

The Committee heard testimony from over 80 witnesses on whether to include certain tariff lines in List 2. The witnesses represented trade organization and corporations of all sizes. The USTR intends to publish a transcript of the hearing, but did not provide a date.

Most of the witnesses requested that the Committee remove specific tariff lines from the list. The most common justifications were as follows:

  • The United States has a trade surplus in a particular good, and the 301 duties would harm that industry;
  • The increased duties would:
    • lead directly to the loss of U.S. manufacturing jobs;
    • lead directly to an increase in the price of goods to the U.S. consumer; and
    • would have no effect on China’s intellectual property practices;
  • The goods targeted on List 2:
    • are only available from China; and
    • are not relevant to the “Made in China 2025” program.

Witnesses who supported the Section 301 duties asserted that they were necessary to protect U.S. manufacturing concerns and that sufficient capacity existed in the United States to manufacture the listed products.

The Committee asked questions of the witnesses when their testimony was complete. The questions fell into several broad categories:

  • Would the Section 301 duties affect the cost and availability of medical devices?
  • Why isn’t current U.S. manufacturing capacity available to meet U.S. demand?
  • Are the listed goods available from non-Chinese foreign suppliers?
  • How long would it take to increase production in the U.S., or to requalify a new non-Chinese supplier?

 

When preparing rebuttal comments, the Committee’s questions to the witnesses should be considered.

On July 10, 2018, U.S. Trade Representative (USTR) Robert Lighthizer announced that at President Trump’s request, USTR has initiated the process of imposing an additional 10 percent ad valorem duty on approximately $200 billion worth of imports from China.

The USTR statement included a link to an advance copy of the Federal Register Notice with the list of proposed tariffs and the process for the public notice and comment period.

This is the formal publication in the Federal Register of this notice.

For more information on the proposed tariffs and the process for the public notice and comment period, please see our previous article.

 

 

On July 11, 2018, the United States Trade Representative (USTR) opened the docket for China 301 Product Exclusion Requests on regulations.gov. The Docket ID is USTR-2018-0025.

The docket includes USTR’s ‘China 301 Product Exclusion Form’.

In its July 11 Federal Register Notice describing the procedures to use for product exclusion requests, USTR states, “To assist in review of requests for exclusion, USTR has prepared a request form that will be posted on the USTR website under ‘‘Enforcement/Section 301 investigations’’ and on the www.regulations.gov docket in the ‘‘supporting documents’’ section. USTR strongly encourages interested persons to use the form to submit requests.”

The Section 301 exclusion form is more simplified than the earlier Section 232 exclusion form. Interested parties can still submit supporting documents in addition to the form, and there is no page limit to the submission

As a reminder, this product exclusion request process only applies to those goods subject to the 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 June 20, 2018, Federal Register Notice. 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.

For more information on key dates and submission guidelines for China Section 301 Product Exclusion Requests, please click here for Crowell’s post discussing the specifics of the notice.

 

 

 

On July 10, 2018, U.S. Trade Representative (USTR) Robert Lighthizer announced that at President Trump’s request, USTR has initiated the process of imposing an additional 10 percent ad valorem duty on approximately $200 billion worth of imports from China including apparel, textiles, chemicals, and agricultural & aquacultural goods.

The USTR statement includes a link to an advance copy of the Federal Register Notice with the list of proposed tariffs and the process for the public notice and comment period. The notice will be published in the Federal Register later this week.

This is the third round of additional tariffs proposed by the Trump administration as a result of its Section 301 investigation into China’s alleged unfair trade practices related to “the forced transfer of American technology and intellectual property.”

The notice indicated the USTR will maintain the first round of tariffs on $34 billion worth of goods implemented on July 6, and will continue with a second round of proposed tariffs on $16 billion worth of goods. This second list is currently under review in a public notice and comment process, with a public hearing scheduled for July 24, 2018.

The Harmonized Tariff Schedule of the United States (HTSUS) subheadings of the products subject to the proposed tariffs is listed in the Annex (pages 11-205) to the notice.

The notice also included a list of key dates for a public notice, comment, and hearing process:

  • July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
  • August 17, 2018: Due date for submission of written comments.
  • August 20-23, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 beginning at 9:30 am.
  • August 30, 2018: Due date for submission of post-hearing rebuttal comments.

 

 

Section 301 For covered products in List 1, please click here. 25% 7/6/2018
For covered products in List 2, please click here. TBD TBD
For covered products in List 3, please click here and see Annex 10% TBD
Status: List 1 totaling $34 billion worth of imports is composed of 818 tariff lines, and went into effect on 7/6/2018.

 

List 2 totaling $16 billion worth of imports is composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. These are in a public review process.

 

List 3 includes a list of tariff lines of products from China with an annual trade value totaling approximately $200 billion. These are also subject to a public review process.