While most of us were lounging around in our pajamas, opening gifts, and spending some quality time with our families this holiday season, two important announcements were released about Section 301 product exclusions at the end of December that could impact your imports. We'll go over them and tell you what you need to know, so keep on reading.
1.) USTR announced the first batch of products exempt from Section 301 tariffs
After reviewing thousands of exclusion requests, the USTR released a list of the first batch of products that will be exempt from Section 301 tariffs. The USTR granted nearly 1,000 product exclusion requests, covering around 22 10-digit tariff subheadings. Around 8,500 requests are still pending and 1,250 have been denied thus far.
All importers have the chance to take advantage of these exclusions, even if they didn't file the request, so if you import any of the products below, you may be able to find some relief from the increased tariffs.
FULLY EXEMPT FROM SECTION 301 TARIFFS
HTS Headings: 8412.21.0075, 8418.69.0120, 8480.71.8045, 8482.10.5044, 8482.10.5048, 8482.10.5052, 8525.60.1010
Product Types: hydraulic power engines, drinking water coolers, injection molds, radial bearings & CB radio transceivers
HTS Headings: 8407.21.0080, 8421.19.0000, 8421.21.0000, 8425.39.0100, 8428.32.000, 8428.33.0000, 8419.90.2000, 8420.10.9080, 8439.99.1000, 8439.99.1000, 8466.92.5010, 8481.90.9040, 9022.14.0000, 9032.10.0030, 9903.88.05
Product Types: outboard marine engines, salad spinners, water filtration apparatuses, winches, elevators, belt conveyors, papermaking machinery, work stands for miter saws, radiation therapy systems, & thermostats for HVAC systems
These exclusions should use the new subheading 9903.88.05 once the process is implemented. However do not use the new subheading until these provisions are added to the tariff schedule, which we will cover next.
2.) CBP announced initial guidelines for new product exclusions
CBP confirmed that the Tranche 1 product exclusions will apply as of July 6, 2018 (the effective date of the $34 billion action), and will extend for one year after 12/31/18, when this notice was published.
However, the current government funding hiatus has pushed back the implementation of the exclusions. Changes to the Automated Customs Environment (ACE) will not be implemented until 10 business days after the shutdown has concluded.
Until these changes go into effect, do not submit entries or entry summaries with the new subheading (Chapter 99 product exclusion number referenced in 83 FR 67463), or they will be rejected.
Once the funding hiatus is over and the exclusion process is implemented, importers can submit a Post Summary Correction (PSC) or a Protest for a refund.
CSMS# 18-000757 - Section 301 Product Exclusions – Announced on 12/28 (full text of notice below)
ACE Outreach Events: Notice of Product Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (Section 301)
On December 28, 2018, the U.S. Trade Representative published Federal Register Notice 83 FR 67463 announcing the decision to grant certain exclusion requests from the 25% duty assessed on goods of China with an annual trade value of approximately $34 billion (Tranche 1), as part of the action in the Section 301 investigation of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
The product exclusions announced in this notice will apply as of the July 6, 2018 effective date of the $34 billion action (see Federal Register 83 FR 28710), and will extend for one year after the publication of this notice.
At the conclusion of the government funding hiatus, CBP will issue instructions on entry guidance and implementation.
Any updates to the Automated Customs Environment (ACE) will be implemented 10 business days after the shutdown has concluded.
Until these updates are completed, entry and entry summaries must be submitted without the Chapter 99 product exclusion number referenced in 83 FR 67463. Entry and entry summaries will be rejected by ACE if the Chapter 99 product exclusion number referenced in 83 FR 67463 is transmitted.
Once CBP issues guidance and implements ACE enhancements, a Post Summary Correction (PSC) or a Protest may be submitted for a refund.
All questions related to Section 301 entry filing requirements should be emailed to firstname.lastname@example.org. After the funding hiatus, questions from the importing community concerning ACE rejections should be referred to their ABI Client Representative.