The Office of the U.S. Trade Representative (USTR) reinstated 352 product exclusions applicable to certain Chinese-origin goods subject to Section 301 tariffs in a notice published on March 28, 2022. USTR reinstated more than half of previously available exclusions, covering a range of manufactured, mechanical and consumer goods. USTR weighed several factors in assessing whether to reinstate the exclusions, namely economic harm, impacts on small businesses, employment, manufacturing output, critical supply chains and the impact of the exclusions on the goal of eliminating China’s harmful trade policies and practices. A complete list of reinstated exclusions is available in the Annex to the March 28 Federal Register notice, See it HERE.
The reinstated exclusions apply to any product that meets the relevant product exclusion description and do not require the U.S. importer to have previously requested a product exclusion. However, the exclusions continue to be highly specific, meaning importers must carefully consider whether their goods meet the relevant specifications.
The reinstated exclusions are retroactive to Oct. 12, 2021, and are available through Dec. 31, 2022. Importers of qualifying Chinese-origin products can request refunds of Section 301 tariffs paid on entries made on or after Oct. 12, 2021, so long as those entries are unliquidated or within 180 days of liquidation. Importers of qualifying goods should therefore act promptly to secure refunds. Any importers of qualifying Chinese-origin products will not need to pay additional tariffs through Dec. 31, 2022, so long as the proper paperwork is completed.
USTR’s decision is part of the agency’s ongoing effort to realign U.S. trade policies toward China under President Biden. The House Committee on Ways and Means on the President’s 2022 Trade Policy Agenda, Ambassador Katherine Tai said that it is time to turn the page on the old playbook with China; that rather than seek to change China’s behavior, the U.S. must develop new domestic tools to defend its economic interests. Whether such tools will include elements of the “old playbook,” such as tariffs, remains unclear. However, some lawmakers are keen to have an established exclusion process available if the tariffs remain for the foreseeable future.
Although the reinstated exclusions are set to end in December of this calendar year, USTR remains open to “further extensions, as appropriate.” The agency, however, would likely prefer to maintain flexibility to adjust the tariff toggle in the ongoing Section 301 dispute with China.
Another avenue of relief available to importers is to participate, as a plaintiff, in the ongoing Section 301 litigation (currently awaiting decision from the U.S. Court of International Trade, before likely being appealed to the U.S. Court of Appeals for the Federal Circuit). Importers not currently party to the litigation may still join the 4,000-plus plaintiff class, so long as they import/imported Chinese-origin products, appearing on the so-called Lists 3 and 4A, and have paid Section 301 duties thereon.
If you have any questions about how USTR’s action may impact your imports or Section 301 litigation, please Contact Us anytime.