List 4 Exclusion Update
On June 26, July 17, and August 11, 2020, the Office of the United States Trade Representative (USTR) requested the public to submit comments regarding potential product exclusion extensions for items subject to Section 301 Tariffs. This comment period specifically applied to products that were included on List 4.
When the list was announced on August 20, 2019, it imposed a 10 percent ad valorem on 3,805 full and partial subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an annual trade value of approximately $300 billion. Then, on August 30, 2019, USTR increased the rate of the additional duty announced in the August 20 notice from 10 to 15 percent. Finally, on January 22, 2020, USTR determined to reduce the rate from 15 to 7.5 percent.
Additionally, the August 2019 announcement contained 2 separate lists of headings subjected to Section 301 tariffs. List 1, which is detailed in Annex A, went into effect in September 2019 and was set to expire on September 1, 2020. On the other hand, List 2, which is detailed in Annex C, was supposed to go into effect in December 2019.
When USTR announced the exclusion process for the goods included on list 4(Annex A), it subsequently announced a determination to suspend until further notice the additional duties on products set out in Annex C (List 2) of the August 20 notice.
In October 2019, USTR initiated a product exclusion process for items included on LIST 4a. Since announcing the exclusion process, USTR has granted eight (8) sets of exclusions under the $300 billion action. The exclusions, which were announced in March, May, June, July, and August 2020, were all set to expire on September 1, 2020.
On October 7th, USTR published two (2) separate Federal Register Notices pertaining to List 4 exclusions. The notices each detail a technical amendment to an HTSUS set out in the Annex of a previously posted Federal Register Notices. The exclusions below are effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on September 1, 2019:
- U.S. Note 20(jjj)(53), was initially published in 85 FR 54616 (September 2, 2020). The technical amendment is detailed in pages 63330-63331 of 85 FR 63330 and is to be applied as of September 1, 2019, and continue through December 31, 2020.
- U.S. Note 20(ddd)(21), was initially published in 85 FR 41658 (July 10, 2020). The technical amendment is detailed in pages 63331-63332 85 FR 63331 and is to be retroactive to the date of the exclusion’s publication.
|Notes:||Chapter 99 Heading||(Old) Modified by deleting…||(New) … and, in lieu thereof, inserting…|
|20(jjj)(53)||9903.88.57||‘‘Bright C1060 galvanized round wire, containing by weight 0.6 percent or more of carbon, measuring at least 0.034 mm but not more than 0.044 mm in diameter’’||‘‘Bright C1060 round wire, plated or coated with zinc, containing by weight 0.6 percent or more of carbon, with a diameter measuring 0.034 mm or more but less than 1 mm’’|
|20(ddd)(21)||9903.88.51||“Bright C1060 galvanized round wire, containing by weight 0.6 percent or more of carbon, measuring at least 0.034 mm but not more than 0.044 mm in diameter’’||‘‘Bright C1060 round wire, plated or coated with zinc, containing by weight 0.6 percent or more of carbon, with a diameter measuring 0.034 mm or more but less than 1 mm’’|
For background information on China Tariffs and numerous ways to mitigate the effect of the China tariffs, read our previous blogs. Diaz Trade Law has assisted clients in assessing their best options to prepare or mitigate the China tariffs and submitted comments and exclusion requests. Our Customs and International Law attorneys are available at 305-456-3830 or firstname.lastname@example.org.