On June 25, 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 2, which went into effect on August 23, 2018.
List 2 imposed 25 percent additional duties on 279 eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) and had an annual trade value of $16 Billion.
On September 18, 2018, USTR provided the public with an exclusion process; then September 2019, USTR granted a number of exclusions that were set to expire on September 20, 2020. In the June 25th Notice, commenters were asked a variety of questions relating to their supply chains, such as…
whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries; any changes in the global supply chain since August 2018 with respect to the particular product, or any other relevant industry developments; and efforts, if any, importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.
The June 25th announcement was made via federal register notice and stated that requests for exclusion extensions were to be submitted no later than July 30, 2020. Less than three months later, on September 22, 2020, USTR announced its determination to extend certain exclusions through the end of the year. Although USTR could have extended the exclusions for up to 12 months, these exclusions are effective as of September 20, 2020, and will now expire on December 31, 2020.
Currently, USTR has granted nearly 7,000 product exclusion requests and has pledged to consider further extensions in the future. In line with USTR’s general policy relating to tariff exclusions, if a given HTSUS is granted an extension to its exclusion, all products that accurately meet the description in the Annex has been granted an extension, too.
A. Effective with respect to goods for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on September 20, 2020, and before 11:59 p.m. eastern daylight time on December 31, 2020, subchapter III of chapter 99 of the HTSUS is modified:
(1) by inserting the following new heading 9903.88.59 in numerical sequence with the material in the new heading inserted in the columns of the HSTSUS:
|Heading/ Subheading||Article Description||Rates of Duty |
|“9903.88.59||Effective with respect to entries on or after September 20, 2020, and through December 31, 2020, articles the product of China, as provided for in U.S. note 20(III) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative……||…The duty provided in the applicable subheading”|
(2) by inserting the following new U.S. note 20(III) to subchapter III of chapter 99 in numerical sequence:
“(III) The U.S. Trade Representative determined to establish a process by which particular products classified in heading 9903.88.02 and provided for in U.S. notes 20(c) and 20(d) to this subchapter could be excluded from the additional duties imposed by heading 9903.88.02. See 83 Fed. Reg. 40823 (August 16, 2018) and 83 Fed. Reg. 47326 (September 18, 2018). Pursuant to the product exclusion process, the U.S. Trade Representative has determined that, as provided in heading 9903.88.59, the additional duties provided for in heading 9903.88.02 shall not apply to the following particular products, which are provided for in the enumerated statistical reporting numbers:
|#||Article Description||Statistical Reporting Number|
|(1)||Acrylic acid-2-acrylamido-2-methylpropanesulfonic acid-acrylic ester (AA/AMPS/HPA) terpolymers, presented in dry form||3906.90.5000|
|(2)||Molded acrylonitrile-butadiene-styrene (ABS) tubes, of a kind used to effect the sterile transfer of fluid from a bag or vial to another container, each tube measuring 7.5 cm or more but not exceeding 23 cm in length, with an inner diameter of less than 0.65 cm and an outer diameter of less than 9 cm, one end having been angle-cut to form a spike, and having an integrated flange, less than 3 cm in diameter (splash guard) near the spike end and removable polyethylene caps on each end, put up in sterile packing||3917.29.0090|
|(3)||Electrical tape of polyvinyl chloride, in rolls, measuring not more than 2 cm in width, not more than 20.2 m in length, and not more than O.18 mm in thickness||3919.10.2020|
|(4)||Transparent tape of plastics with an acrylic emulsion adhesive, in rolls measuring not over 4.8 cm in width, valued not over $.25 per square meter||3919.10.2030|
|(5)||Rolls of polyethylene film coated with a solvent acrylic adhesive||3919.10.2055|
|(6)||Rolls of polyvinyl chloride, measuring 2.5 cm or more but not exceeding 5.1 cm in width and 182.9 min length||3920.43.5000|
|(7)||Films coated on one or both sides with polyvinylidene chloride (PVdC) or polyvinyl alcohol (PVOH), whether or not having a primer layer between the base and coating; any of the foregoing having a total thickness greater than 0.01 mm but not greater than 0.03 mm||3920.62.0090|
|(8)||Printed film of polyvinyl chloride, laminated with foamed-polyvinyl chloride-coated polyester scrim, in rolls, of a kind used for lining shelves or drawers||3921.12.1100|
|(9)||Sheets and strips consisting of both cross-linked polyethylene and ethylene vinyl acetate, of a width greater than 1 m but not greater than 1.5 m, and a length greater than 1.75 m but not greater than 2.6 m||3921.19.0000|
|(10)||Polyethylene sheet and film laminated with spunbond-spunbond-spunbond nonwoven polypropylene fabric, measuring 1.12 m or more but not over 1.52 min-width and 1.93m or more but not over 2.29m in length, and weighing 55g/m2 or more but not exceeding 88 g/m2||3921.90.1500|
|(11)||Girders of iron or steel, meeting ASTM standard A572, Grades 50, 65 or 70||7308.90.3000|
|(12)||Pipes of iron or steel, with connectors, meeting ASTM standard A572, Grade 50||7308.90.3000|
|(13)||Posts of steel pipe and tube, with ball knobs attached||7308.90.3000|
|(14)||Posts of steel pipe and tube, with sill plates and ball studs attached||7308.90.3000|
|(15)||Rib nodes of iron or steel, meeting ASTM standard A572, Grades 50, 65 or 70||7308.90.3000|
|(16)||Monopolar conductors for a voltage exceeding 1,000 V, other than of copper and not fitted with connectors||8544.60.6000|
|(17)||Motorcycles with electric power for propulsion, each of a power not exceeding 1,000 W; prior to July 2019: described in statistical reporting number 8711.60.0000||Effective July 2019: 8711.60.0050 or 8711.60.0090|
(3) The technical amendments to the exclusions to certain Notes to Subchapter III of Chapter 99 of the HTSUS can be found below:
|Notes:||(Old) Modified by deleting…||(New) … and, in lieu thereof, inserting…|
|20(c)||“or (4)”||“(4)”; and by inserting “; or (5) heading 9903.88.59 and U.S. note 20(III) to subchapter III of chapter 99″ after the phrase “U.S. note 20(ggg) to subchapter III of chapter 99” where it appears at the end of the sentence.|
|20(d)||“or (4)”||“(4)”; and by inserting “; or (5) heading 9903.88.59 and U.S. note 20(III) to subchapter III of chapter 99” after the phrase “U.S. note 20(ggg) to subchapter III of chapter 99”, where it appears at the end of the sentence.|
|Article Description of heading: 9903.88.02||“9903.88.20 or”||“9903.88.20,”; and by inserting “or 9903.88.59,” after “9903.88.54,”|
Additionally, included in the September 22, 2020, Federal Register Notice is a table that lists the original product exclusions that are being extended. The table also contains the corresponding subdivisions in new note 20 (III) to subchapter III of Chapter 99 and new heading 9903.88.59 for the product exclusions that are being extended by this notice:
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.