The US Trade Representatives has issued another round of exclusions to List 3 for the Chinese 301 duties. The 47 new exclusions are retroactive to September 24, 2018, and will remain in place until August 7, 2020.
These exclusions are to be entered under 9903.88.40.
The US Trade Representative has issued four more exclusions for List 1 of the Chinese 301 duties. These exclusions cover certain products classified under 8413.70.2004, 8413.91.9050, 8417.90.0000, and 8501.52.4000. These exclusions are retroactive to July 8, 2018 and will remain in place until October 1, 2020. The exclusion is to be declared under 9903.88.19.
Additionally, the USTR’s notice includes multiple technical changes to account for HTS numbers throughout various exclusions that changed as of January 1, 2020. These changes generally affect the last 2 statistical reporting digits of the tariff numbers.
The US Trade Representative has issued the eighth set of exclusions to List 3 for the Chinese 301 tariffs. There are 2 exclusions at the HTS level for winches and parts of clutches, plus 117 other exclusions at the product level. This set of exclusions will be declared using HTS 9903.88.38. We can expect more exclusions in the future as the USTR received over 30,000 exclusion requests for List 3 with a backlog of over 17,000 applications still in the review process. Over 12,000 requests have been denied thus far.
The period in which to request exclusions for List 4A closed on January 31st with over 2800 requests filed. As a reminder, the duty rate for List 4A will decrease from 15% to 7.5% effective February 14th.
The USTR is seeking comments on whether to extend the third set of exclusions to List 1. This set was issued in April 2019 and will expire April 18, 2020. The comment period will open February 16th until March 16th. The format for which to submit comments may be found in today’s Federal Register notice.
In an effort to protect U.S. steel and aluminum industry, the scope of the Section 232 duties on steel and aluminum is being expanded to cover derivative articles. These items include for steel: nails, tacks, drawing pins, staples, bumper stampings for motor vehicles, and body stampings for tractors for agricultural use; and for aluminum: stranded wire, cable, plaited bands, bumper stampings for motor vehicles, and body stampings for tractors for agricultural use.
The additional duties for the steel items will be 25%. The additional duties for the aluminum articles will be 10%. A list of the articles and their tariff numbers may be found on the Bureau of Industry and Security website as Annex I for aluminum and Annex II for steel.
The International Trade Commission (ITC) has posted over 4000 petitions for the next Miscellaneous Tariff Bill (MTB) on its portal. The MTB allows for a reduction or suspension of Normal Trade Relations (regular) duties for a period of two years. 301 and 232 duties must still be paid.
The ITC is now accepting comments on the MTB petitions through February 24, 2020. The comments must be filed through the ITC’s portal where they will be visible to the public. Any member of the public is invited to submit comments. The ITC is particularly interested in receiving comments from domestic manufacturers about whether they produce an article that is identical to, or similar to the product that is the subject of a petition.
Later this summer, the ITC will submit their reports of approved petitions to Congress. Congress could approve this next round of MTB in the fall.
The US Trade Representative has issued the seventh set of exclusions to List 3 for the Chinese 301 tariffs. Two of the 68 exclusions are at the tariff level and are for bicycles. The remaining exclusions include certain fabrics and handtools, among other items.
These exclusions are retroactive to September 24, 2018, and will expire August 7, 2020. They are to be claimed with tariff number 9903.88.37.
The new Minimum Security Criteria (MSC) for the CTPAT program are in effect as of January 1, 2020. It is now mandatory for CTPAT members to comply with the new MSC. Customs has posted the final versions of the MSC by entity type on the CTPAT portal in the Public Library. Make sure to use the November 2019 version as two new criteria were added since the previous version was published in May 2019.
Customs is working on updating the portal security profile questions with the new criteria, however, this is not expected to be completed until June 1st. In the interim, Customs has posted excel versions of the MSC questions in the Public Library. CTPAT members should download the excel sheet and start completing the questions. Once the portal is available on June 1st, you can paste your answers from the excel sheet into your security profile.
Security profiles will not be available 3/1 – 6/1/20. Customs has uploaded pdf versions of the security profile in the Portal Document Exchange for each account. The annual security profile review period will remain the same. Any questions should be directed to your Supply Chain Security Specialist.
The US Trade Representative has published a notice requesting comments until January 13, 2020 on the following actions for goods from the European Union subject to 301 tariffs due to the Airbus dispute.
Should the products currently subject to duties remain on the list or be removed
Should the additional duty rate be increased to 100%
Should more products be added to the list and what should be the duty rate (up to 100%)
The current list of products are subject to additional duties of 10% and 25%. Both the current list and list of proposed products may be found in the Federal Register notice.
The US Trade Representative has issued a fifth set of exclusions for List 3 of the Chinese 301 tariffs. These 32 exclusions can be claimed using HTS 9903.88.35. These exclusions are retroactive to September 24, 2018, and can be claimed until August 7, 2020.
The USTR’s notice also made a correction to the exclusion description for 7315.12.0080. The correct description is “Articulated chains of iron, not over 8 mm in thickness and valued not over $2 per m (described in statistical reporting number 7315.12.0080).” The previous language had the goods valued not over $2 per kg.
The US Trade Representative has published the fourth set of exclusions to the Chinese 301 tariffs List 3. There are 36 exclusions in this round, including two tariff level exclusions for 8409.91.3000 for aluminum cylinder heads for vehicles of subheading 8701.20, or heading 8702, 8703 o4 8704; and for 8708.50.9500 for half-shafts for parts of motor vehicles of headings 8701 to 8705, other than for tractors and vehicles of heading 8703. These latest exclusions will be claimed using HTS 9903.88.34.
As noted in a previous advisory, there will be no more exclusions published for Lists 1 and 2. The USTR is accepting comments until November 30, 2019 to extend certain exclusions granted for List 1 last December.
U.S. Customs and Border Protection (CBP) has issued updated guidelines regarding liquidated damages claims and penalties for wood packing material (WPM) violations. Until 2017, CBP would not issue a penalty until five documented violations had occurred. Effective November 1, 2017, Customs changed its position and started issuing penalties for the first violation in order to motivate better compliance.
When a violation is found, Animal and Plant Health Inspection Service (APHIS) will issue an Emergency Action Notification (EAN). Failure to comply with the EAN will result in the imposition of liquidated damages up to the amount of the importer’s bond. Customs can also impose a penalty assessed at the domestic value of the goods. The guidelines state that Customs may offer mitigation of liquidated damages if action was taken under the EAN, but after the deadline. Mitigation could also be granted if the petitioner was unable to take the required EAN action due to circumstances beyond its control.
Penalties can be issued for unmarked WPM, inappropriately marked WPM, or infested WPM. For a first time violation, CBP may mitigate the penalty to 1-10% of the value of the penalty. A second violation may be mitigated to 10-25% of the value of the penalty. Third or subsequent violations may be mitigated to an amount not lower than 25% of the assessed penalty. Customs will take into account mitigating factors such as clear documentary evidence of immediate remedial action taken to prevent further WPM violations, and exceptional cooperation with CBP and APHIS. Aggravating factors include a lack of cooperation with CBP or APHIS, and falsely marked WPM.
The first set of exclusions to List 1 for the Chinese 301 duties is due to expire December 28, 2019. The US Trade Representative has decided to consider extending certain exclusions granted in the first round in December 2018 for up to 12 months, and is accepting comments until November 30, 2019.
The comments are to be for the first set of exclusions to List 1 only. The comments must address specific issues that are outlined in the Federal Register notice. The fact that the USTR is looking at a 12 month extension could be a sign that 301 duties are not going away any time soon.
A Proclamation has been published in the Federal Register changing the Generalized System of Preferences (GSP) status for certain items from Ukraine and Thailand, and granting new status to the Republic of Mali.
Ukraine: The Proclamation restores the duty-free treatment accorded under GSP to certain products from Ukraine because the country has made progress towards providing adequate and effective protection of intellectual property rights. This action will take effect October 30, 2019. The list of affected items is found in Annex 1 to the Proclamation.
Thailand: The US Trade Representative has determined that Thailand is not taking steps to afford its workers internationally recognized worker rights. Therefore, certain items that are the product of Thailand will be suspended from the GSP program effective April 25, 2020. The list of affected items (about one third of goods currently eligible for GSP from Thailand) is found in Annex 2 to the Proclamation.
Republic of Mali: For the purposes of the African Growth and Opportunity Act (AGOA), the Republic of Mail is designated a “lesser developed beneficiary sub-Saharan African country” effective November 24, 2019.
The US Trade Representative has issued 83 new exclusions for List 3 of the 301 Chinese tariffs. These exclusions will be entered using 9903.88.33. They are retroactive to September 24, 2018, and will remain in effect until August 7, 2020.
The exclusion review process for Lists 1 and 2 is now complete. There were 10,814 exclusion requests forList 1, with 3,656 granted (34%) and 7,158 denied (66%). There were 2,869 exclusion requests forList 2, with 1,074 granted (37%) and 1,795 denied (63%).
The US Trade Representative has announced the exclusion process for products covered under Chinese 301 tariff List 4A. An electronic portal will open October 31, 2019 and run through January 31,2020 for submission of exclusion requests. Users must register on the portal at https://exclusions.ustr.gov.
Detailed instructions for what must be included in the request are available in the USTR’s announcement. We encourage stakeholders to submit requests early. Once granted, the exclusion will be retroactive to September 1, 2019 and valid for one year.
A planned increase from 25% to 30% for Lists 1 through 3 for the Chinese 301 tariffs was due to go into effect October 15, 2019, but has been averted as an agreement with China was reached late last week.
This "Phase 1" agreement is still under development and is expected to be signed sometime in November.
The American Manufacturing Competitiveness Act of 2016 allows companies to file a petition with the U.S. International Trade Commission to seek a temporary tariff suspension or reduction for a period of 2 years. The MTB would reduce column 1 (regular) duties only. Other duties such as Section 301, Section 232, EU tariffs, antidumping, or countervailing duties would still apply. Petitions are to be filed through the ITC’s portal starting at 8:45 a.m. ET on October 11, 2019 through December 10, 2019. Petitioners must use the portal; paper submissions or email submissions are not accepted.
Among the requirements for the petition are the HTS number of the product, a clear description of the item and its uses, the countries from which it is imported, the industry in the United States that uses the item, an estimate of the total and dutiable value of imports of the item for the calendar year preceding the year in which the petition is filed, for the calendar year in which the petition is filed, and for each of the 5 calendar years after the calendar year in which the petition is filed, including an estimate of the value of such imports by the person who submits the petition and by any other importers, if available. Petitioners may also seek a renewal for products included in the current MTB due to expire December 31, 2020. The product should not be produced in the US, and duty savings may not be more than $500,000 per year per product. Full details are available on the portal website.
Once the petition period closes, the ITC will publish the petitions on its website (the process does allow users to claim certain details as confidential business information) in January 2020. There is a 45 day public comment period and then the final approved petitions are submitted to Congress. The MTB could then be approved by fall 2020.
Correct tariff classification and a concise product description are critical to a successful MTB petition. If you need a product classification review, please contact us.
The US Trade Representative has announced tariffs of 10% on large civil aircraft and 25% on other products such as certain apparel, cheese, and wine from the European union effective October 18. 2019. The full list of products may be found here.
These duties stem from a 15 year dispute with the EU in the World Trade Organization over Europe’s subsidies to Airbus. The WTO “confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies,” according to a statement by the USTR. The statement goes on to say that the USTR has the authority to impose duties of 100%, but is limiting them to 10% and 25% at this time. The US does have the authority to increase the tariffs at any time, or change the products affected.
A formal notice is expected to be published in the Federal Register shortly.
The US Trade Representative has issued over 200 new exclusions to the Chinese 301 tariffs for Lists 1 and 2. The exclusions for List 1 are retroactive to July 6, 2018, and will remain in effect until October 2, 2020. The exclusions for List 2 are retroactive to August 23, 2018, and will remain in effect until October 2, 2020.
Given the frequency of exclusion postings and the effect it can have on filing claims for refunds, we recommend that importers with affected entries, and those who have applied for exclusions, request extensions of liquidation pursuant to 19 CFR 159.12. Entries of goods on Lists 1 and 2 are starting to liquidate which means the protest period of 180 days has begun.
Importers may want to preserve their ability to file post summary corrections on unliquidated entries, particularly where multiple exclusions may apply. An extension of one year may be requested from the Center of Excellence and Expertise. If you would like Vandegrift to make the request on your behalf, please contact us.
A full list of the exclusions in Excel format, can be found by logging on to your VFI Track account:
Click on the profile button in the upper right corner
Click on User Manuals
The 301 Tariff Exclusion List spreadsheet is located under Advisories
The U.S. Trade Representative is accepting written comments until September 20.2019 for the proposed action to increase the 301 Tariffs for Lists 1 through 3 from 25% to 30%.
Comments must be submitted through the Federal eRulemaking Portal using docket number USTR-2019-0015. The USTR notice states that because China has retreated from its commitments to end unfair trade practices, maintaining the 301 tariff rate at 25% may no longer be appropriate.
The proposed modification of the duty rate from 25% to 30% would go into effect on October 1, 2019.