Customs & International Trade Law ExpertSection 301 Tariff Updates: USTR Grants Exclusions & Seeks Comments on Products Necessary to Combat COVID-19! - Customs & International Trade Law Expert

The Office of the United States Trade Representative (USTR), faced with the current COVID-19 pandemic, has moved quickly to grant numerous exclusion requests in March 2020; many of which are for medical supplies. USTR is also seeking comments from industry on whether products are necessary to combat COVID-19 spread and should be excluded from the additional duties. DTL has assisted clients in submitting comments to the USTR – this is the time to let your voice be heard.

Below is a chart summarizing recent changes to Section 301 Tariffs:

The chart is available via PDF here: Updated Tariff Chart - 3.27.20.

All granted exclusions apply to any product that meets the USTR’s product description provided for in the relevant Federal Register Notice (FRN), regardless of whether the importer filed its own exclusion request. For those importers who did not file exclusion requests or received a denial, now is the time to review granted exclusion requests for your HTS(s) to determine whether you may rely upon the excluded product descriptions outlined in the FRNs and strategize on how to timely file protests and post summary corrections to get refunds from CBP of paid Section 301 duties.

March 2020 Request for Comments (in descending order): 

March 25, 2020 – Available for List 1, 2, 3, and 4:

• On March 25, 2020, the USTR , via a FRN, confirmed removing additional duties from medical-care products subject to Section 301 tariffs because of the need to address the COVID–19 outbreak.
• The FRN calls upon industry to voice whether their products are necessary to combat COVID-19 spread and should be excluded from the additional duties.
  • Each comment specifically must identify the particular product of concern and explain precisely how the product relates to the response to the COVID–19 outbreak.
  • For example, the comment may address whether a product is directly used to treat COVID– 19 or to limit the outbreak, and/or whether the product is used in the production of needed medical-care products.
• USTR is accepting comments until June 25, 2020 (this time frame may be extended as appropriate).
• Comments may be submitted regarding any product covered by the action in the investigation, regardless of whether the product is subject to a pending or denied exclusion request.
• Interested persons may also submit responses to comments. To be assured of consideration, any responses to comments should be submitted within three business days after a comment is posted in the docket.
• USTR will review comments on a rolling basis.

March 20, 2020 – Available for List 3:

• On Friday, March 20, 2020, USTR published a FRN requesting comments on whether certain exclusions from List 3 that were granted under the June 2019 product exclusion notice and scheduled to expire on June 4, 2020 should be extended an additional year.
• The following are topics that commentators should address specifically:
  • Whether the particular product and/or a comparable product is available from sources in the U.S. and/or in third countries.
    • The main factor evaluated is whether the particular product remains available only from China.
  • Any changes in the global supply chain since July 2018 with respect to the particular product or any other relevant industry developments.
  • The efforts, if any, the importers or U.S. purchasers have undertaken since July 2018 to source the product from the U.S. or third countries.
  • Comments may be submitted as early as April 1, 2020 until April 30, 2020.

March 2, 2020 – Available for List 3:

• On March 2, 2020, USTR published a FRN requesting comments on whether certain exclusions from List 3 that were granted under the May 2019 product exclusion notice and scheduled to expire on May 14, 2020 should be extended an additional year.
• The following are topics that commentators should address specifically:
  • Whether the particular product and/or a comparable product is available from sources in the U.S. and/or in third countries.
    • The main factor evaluated is whether the particular product remains available only from China.
  • Any changes in the global supply chain since July 2018 with respect to the particular product or any other relevant industry developments.
  • The efforts, if any, the importers or U.S. purchasers have undertaken since July 2018 to source the product from the U.S. or third countries.
  • Comments may be submitted until April 12, 2020.

MARCH 2020 Exclusions (in descending order): March 26, 2020 – Exclusions Granted for List 3:

• The most recent FRN published on March 26, 2020, excluded 177 HTS classifications from List 3 (entered under the secondary HTS 88.03) and are no longer subject to the additional 25% tariff. Importers of goods described in the FRN should use the secondary HTS 9903.88.43 to indicate to CBP that their product falls within the granted exclusion product description. To determine whether your product may rely on the exclusions, DTL can assist in navigating the USTR’s product description provided for in the FRN and guide you through the Protest or Post Summary Correct processes to get refunds).
• The product exclusions announced in this notice will apply as of September 24, 2018, the effective date of the $200 billion action, to August 7, 2020.
• USTR additionally amended the product description of 5 exclusions that were previously granted. The amendments announced in this notice are retroactive to the date the original exclusions were published.

March 17, 2020 – Exclusions Granted for List 1:

• On March 19, 2020, USTR announced in a FRN that eleven List 1 exclusions will be extended until March 25, 2021. U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
• The USTR determined that the eleven HTS classifications under List 1 now should be entered under the relevant secondary subheading 88.06.

March 17, 2020 – Exclusions Granted for List 4A:

• The FRN from March 17, 2020, the USTR determined 19 HTS classifications subject to List 4A (entered under the secondary HTS 88.15) would be excluded from additional 7.5% duties and now should be entered under the relevant secondary subheading 9903.88.42.

March 16, 2020 – Exclusions Granted for List 3:

• On March 16, 2020, an FRN detailing which HTS classifications subject to List 3 (entered under the secondary HTS 88.03) were excluded was released. These HTS classifications now can use the secondary HTSUS 9903.88.41 to indicate to CBP that the product is not subject to List 3. To determine whether your product may rely on the exclusion based on HTS subheading classifications excluded DTL can assist in navigating the USTR’s product description provided for in the FRN.

March 10, 2020 – Exclusions Granted for List 4A:

• The first notice from March 10, 2020, the USTR established a process by which particular products subject to List 4A (entered under the secondary HTS 88.15) are excluded from additional 7.5% duties and now should be entered under the secondary subheading 9903.88.39. To determine whether your product may rely on the exclusion based on HTS subheading classifications excluded DTL can assist in navigating the USTR’s product description provided for in the FRN.

For background information on China Tariffs and numerous ways to mitigate the effect of the China tariffs, check out 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 exclusions as well as assisted in filing post summary corrections. Our Customs and International Law attorneys are available at 305-456-3830 or info@diaztradelaw.com.