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UPDATE - tariff increase on China-manufactured goods

Following our advisory note regarding President Trump’s decision to impose tariff increases on a list of goods manufactured in China, the US Customs & Border Protection and the U.S. Trade Representative have shared additional guidance on the fourth round of product exclusions from China as part of Section 301.

The combined list 4 covers essentially all products not already subject to Section 301 additional tariffs. It includes apparel, footwear, books as well as manufactured textile products among others.

The office of the U.S. Trade Representative (USTR) announced it would establish a process by which U.S. stakeholders may request an exclusion from additional duties of particular products classified within a tariff subheading covered by the August 2019 action. 

The exclusion process for items on List 4A opened October 31, 2019 and will close January 31, 2020.

Exclusion requests must be submitted through an online portal and will require a significant amount of company and product information. Please find the exclusion process here.

All requests must identify:

  • The HTSUS classification for the products for which an exemption is sought.
  • The product name and detailed description (e.g., dimensions, weight, material composition etc…).
  • The product's function, application, principal use, and any unique physical features that distinguish it from other products within the same HTSUS subheading.
  • The relationship between the party submitting the request and the product (e.g., importer, US producer, purchaser, industry association, other).
  • Specific data on the annual quantity and value of the Chinese-origin product, domestic product, and third-party product the requestor purchased in 2017, 2018, and the first quarter of 2019.
  • The requestor's gross revenues for at least 2018 and the first quarter of 2019.
  • For imports used in the production of final products, requestors must identify: (i) what percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for; and (ii) what percentage the final product(s) accounted for in relation to the requestor's 2018 gross sales.

Parties must also provide a rationale for the requested exclusion, including:

  • Whether the product is available only from China and whether a comparable product is available from sources in the US and/or third countries.
  • Whether the requestor has attempted to source the product from the US or third countries.
  • Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requestor or other US interests.
  • Whether the product is strategically important or related to "Made in China 2025" or other Chinese industrial programs.

Once a request is submitted, interested persons will have 14 days to object, support, or otherwise respond to the submission. Requestors will have seven days to reply to any such responses.

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