List 4 China Tariffs—A Possible Exit Strategy

Under Section 301 of the Trade Act of 1974, the US has the right to retaliate against unfair foreign trade practices.  Over the last year the US has slapped additional tariffs of between 10 and 25 % on almost all goods of Chinese origin.  As its name implies, these tariffs are on top of the normal customs duties. 

The tariffs have been rolled out in various Lists organized on an HTS basis.  The first three Lists hit goods with a combined $250 billion in annual imports from China.

The 4th and final List assesses additional duties of 15% and covers the remaining $300 Billion worth of annual Chinese imports, many of them apparel and other consumer goods.  It has been bifurcated into two parts – List 4A came into effect on September 1 while List 4B will be effective December 15.  Note–the 15% tariff may be increased to the now-standard 25% tariff level.

Exclusion Requests: Three Month Window

The USTR has established procedures whereby importers and others (trade associations, Chinese producers) can petition for exclusions from the China 301 tariffs.  The exclusions function as exemptions. 

The window to file such requests for the first three Lists has closed.  But the period to request an exclusion from the List 4A tariff hit has just been announced.  

Stakeholders will have from October 31 to noon on January 31, 2020 to submit exclusion requests via the USTR web portal.  If granted, the exclusions are good for a one-year period but they have retroactive effect, as well, so importers will want to take steps to protect their rights (suspended liquidations, protests) in the face of the steady liquidation of entries.

Request Process

The request process is very nuanced and has been altered slightly from the List 3 process.  For instance, the exclusion request must be made on a 10-digit HTS basis rather than the former 8-digit approach.  Also note that this is a public process, with open access to all of the filings.  There is a provision for the protection of business confidential information, such as purchase history.  Also know that domestic competitors can file negative comments.

We Can Help

ITC has filed List 3 requests for exclusion.  Interested List 4 stakeholders can contact us for more information and assistance.

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