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Section 301 Trade Remedies to be Assessed on Certain Products from China

UPDATE - Change in Effective Date of Duty Increase of Goods Subject to Section 301 (Tranche 3) DutiesUPDATE - Change in Effective Date of Duty Increase of Goods Subject to Section 301 (Tranche 3) DutiesUpdate: Change in Effective Date of Duty Increase of Goods Subject to Section 301 (Tranche 3) Duties

UPDATE - Change in Effective Date of Duty Increase of Goods Subject to Section 301 (Tranche 3) DutiesSee related CSMS:  18-000409, 18-000419, 18-000493, 18-000498, 18-000554, 18-000621, 18-000606, 18-000624, 18-000642, 18-000752, 18-000757, 19-00095, 19-000236, 19-000238, 19-000244

BACKGROUND

NEW On May 14, 2019, the U.S. Trade Representative published Federal Register Notice 84 FR 21389 announcing the decision to grant the fourth round of certain exclusion requests from the 25 percent duty assessed under the Section 301 investigation related to goods from China (Tranche 1).  The product exclusions announced in this notice will apply as of the July 6, 2018 effective date and will extend for one year after the publication of this notice.

The exclusions are available for any product that meets the description in the Annex to Federal Register Notice 84 FR 21389, regardless of whether the importer filed an exclusion request.  Further, the scope of each exclusion is governed by the scope of the 10-digit headings and product descriptions in the Annex, and not by the product descriptions set out in any particular request for exclusion.

The functionality for the acceptance of the third round of products excluded from Section 301 duties is available in the Automated Commercial Environment (ACE) as of May 14, 2019.


On May 9, 2019, the USTR published a Notice of Modification of Action (84 FR 20459) in the Section 301 investigation increasing the duty rate to 25 percent on imports from China on the over 5,700 full and partial eight-digit subheadings of the HTSUS listed in Annex A to the USTR’s September 21, 2018 Notice, as amended.


On September 21, 2018, the U.S. Trade Representative (USTR) published a Notice of Modification of Action in the Section 301 investigation providing for the imposition of additional import duties on over 5,700 full and partial eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) on goods imported from the People’s Republic of China (China). See Federal Register 83 FR 47974.

The rate of additional duties was initially 10 percent.  Those additional duties were effective starting on September 24, 2018, and are currently in effect.  Under Annex B of the September 21 notice, the rate of additional duty was set to increase to 25 percent on January 1, 2019.  On December 19, 2018, USTR published a Federal Register notice changing the effective date of the duty increase to March 2, 2019.  See Federal Register 83 FR 65198, December 19, 2018. On February 24, 2019, the President directed a further delay in the duty increase.


On September 21, 2018, the USTR published a Notice of Modification of Action providing for the imposition of 10 percent additional import duties on a third list (Tranche 3) of 5,745 HTSUS numbers representing $200 billion of imports from China effective September 24, 2018. The September 21, 2018 list of products can be found in Annex A to the USTR’s September 21, 2018 notice of action.. See Federal Register 83 FR 47974. Under Annex B of the September 21 notice, the rate of additional duty was set to increase to 25 percent on January 1, 2019. On December 19, 2018, USTR published a Federal Register notice changing the effective date of the duty increase to March 2, 2019. See Federal Register 83 FR 65198.


On August 16, 2018, the USTR published a Notice of Action providing for the imposition of 25 percent additional import duties on a second list (Tranche 2) of 279 eight-digit HTSUS numbers, representing $16 billion worth of imports from China, effective August 23, 2018. The August 16, 2018 list of products can be found in Annex A to the USTR’s August 16, 2018 notice of action.  See Federal Register 83 FR 40823.


On June 20, 2018, the USTR published a Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301, imposing an additional 25 percent ad valorem rate of duty on a list (Tranche 1) of 818 eight-digit HTSUS numbers, representing $34 billion of imports from China, effective July 6, 2018. See Federal Register 83 FR 28710.


On August 18, 2017, the Office of the United States Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.  On March 22, 2018, pursuant to Section 301 of the Trade Act of 1974, the President issued a Presidential memorandum directing USTR to consider whether to increase tariffs on imported goods from China.


GUIDANCE

Products Covered by the June 20, 2018 List (Tranche 1) for the Section 301 Action

The additional import duties for Chinese goods covered by the June 20, 2018 list were effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on July 6, 2018.

In addition to reporting the Chapters 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.01 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy.

9903.88.01: 25% ad valorem additional duty for articles the product of China.

Products Covered by the August 16, 2018 List (Tranche 2) for the Section 301 Action

The additional import duties for Chinese goods covered by the August 16, 2018 list of products subject to the Section 301 action are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on August 23, 2018.

Any article classified in a subheading covered by the August 16 list that is a product of China is subject to a 25% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading.

In addition to reporting the Chapter 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.02 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy.

9903.88.02: 25% ad valorem additional duty for articles the product of China.

Products Covered by the September 21, 2018 List (Tranche 3) for the 301 Action

The additional import duties for Chinese goods covered by the September 21, 2018 list of products subject to the Section 301 action are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM eastern daylight time on September 24, 2018.

Any article classified in a subheading covered by the September 21 list that is a product of China is subject to a 10% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading.

There are two special tariff numbers that will apply to goods covered by the September 21, 2018 list, 9903.88.03 and 9903.88.04. Heading 9903.88.03 covers all subheadings listed in U.S. note 20(f) to Subchapter III to Chapter 99 (5,734 eight-digit HTSUS subheadings); heading 9903.88.04 covers all subheadings listed in U.S. note 20(g) to Subchapter III to Chapter 99 (11 eight-digit HTSUS subheadings with partial exceptions at the 10-digit level).

In addition to reporting the Chapter 1-97 HTSUS classification of the imported merchandise, importers shall also report the relevant 9903.88.03 or 9903.88.04 special tariff number for goods subject to the additional duty assessment of 10% ad valorem as a result of the Section 301 trade remedy.

9903.88.03: 10% ad valorem additional duty for articles the product of China,… as enumerated in U.S. note 20(f) to Subchapter III to Chapter 99.

9903.88.04: 10% ad valorem additional duty for articles the product of China,… as enumerated in U.S. note 20(g) to Subchapter III to Chapter 99.

Please note that in accordance with Annex B to the September 21, 2018 notice of action, effective 12:01 AM Eastern Standard Time on January 1, 2019, the additional rates of duty imposed by headings 9903.88.03 and 9903.88.04 will increase to 25% ad valorem. However, on December 19, 2018, USTR published a Federal Register notice changing the effective date of the duty increase to March 2, 2019. See Federal Register 83 FR 65198.

The product descriptions provided in Annex C to the September 21, 2018 notice of action are provided for informational purposes only, and are not legally controlling. The provisions of the relevant HTSUS subheadings listed in Annex A are controlling for the purpose of determining whether a good is subject to the Section 301 remedy.

Update: Change in Effective Date of Duty Increase of Goods Subject to Section 301 (Tranche 3) Duties 

The increase in additional import duties for Chinese goods covered by the September 21, 2018 Federal Register notice, as amended, is now effective on May 10, 2019.  Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, the rate of additional duties on imported articles classified in a subheading covered by the September 21, 2018 Federal Register notice, as amended, will be 25 percent ad valorem.

For subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, report the following HTS numbers and duty rates:

 
HTS Duty Rate
9903.88.03 and 9903.88.04 25 percent 

For subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and before June 1, 2019, and exported to the United States before May 10, 2019, report the following HTS number and duty rate:

HTSHTS Duty Rate
9903.88.03 and 9903.88.049903.88.09 25 percent 10 percent
 
The subject imports of China that are entered into the United States on or after June 1, 2019 are subject to the 25 percent rate of additional duty under HTS 9903.88.03 and 9903.88.04.
The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.

All Products Covered by Section 301 Duties

The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.

New Statistical Reporting Number for Subheading 8517.62.00, HTSUS

U.S. note 20(g)(2) to Subchapter III to Chapter 99 indicates that heading 9903.88.04 applies to articles classified in subheading 8517.62.00, except for machines provided for in statistical reporting number 8517.62.0090. 8517.62.0090 is a new statistical reporting number that will be added to the HTSUS on or before September 24, 2018.  For more information, see https://www.usitc.gov/tariff_affairs.htm.

Submitting Imports of Fourth Group of Products Excluded from Section 301 Duties (Tranche 4)

INSTRUCTIONS FOR FILING ENTRIES SUBJECT TO PRODUCT EXCLUSIONS:
Instructions on submitting entries to CBP containing products granted exclusions by the USTR from the Section 301 measures in Federal Register Notice 84 FR 21389 are as follows:

In addition to reporting the regular Chapters 84, 85 & 90 classification of the Harmonized Tariff Schedule of the United States (HTSUS) for the imported merchandise, importers shall report the HTSUS classification 9903.88.08 (Articles the product of China, as provided for in U.S. note 20(k) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative) for imported merchandise subject to the exclusion.

Do not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.08 is submitted.
 

Additional Information

Chapter 98
The additional duties imposed by headings 9903.88.01 through 9903.88.04 do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under headings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80.  For headings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed abroad, as described in the applicable heading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80.  

Chapter 98 Filing Instructions
When submitting an entry in which a heading or subheading in Chapter 98 is claimed on merchandise covered by the Section 301 remedy, the following instructions will apply.

When submitting an entry using a Chapter 98 provision that normally requires the reporting of a secondary Chapter 1-97 HTSUS classification, a filer must first report the applicable chapter 98 provision, then subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04, as applicable, followed by the applicable Chapter 1-97 HTSUS classification for the commodity being imported.

Trade Preference Programs and Temporary Reductions in Rates of Duty
Products of China that are covered by the Section 301 remedy and that are eligible for special tariff treatment under general note 3(c)(i) to the tariff schedule, or that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99, shall be subject to the additional 25 percent ad valorem rate of duty imposed by headings 9903.88.01 and 9903.88.02, or the additional 10 percent ad valorem rate imposed by heading 9903.88.03 and 9903.88.04.

Foreign Trade Zones
Per the Federal Register notices published by the USTR, any product listed in the Federal Register notices, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by these determinations, and that is admitted into a U.S. foreign trade zone on or after 12:01 am eastern daylight time on July 6, 2018, (for products on the June 20 list), August 23, 2018 (for products on the August 16 list), or September 24, 2018 (for products on the September 21 list) only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.

Drawback
Section 301 duties are eligible for duty drawback.

Submitting Imports of Fourth Group of Products Excluded from Section 301 Duties
Duty exclusions granted by the USTR are retroactive on imports to the initial effective date of July 6, 2018.  To request an administrative refund for previous imports of duty-excluded products granted by the USTR, importers may follow the same entry filing instructions as above to file a Post Summary Correction (PSC) on unliquidated entry summaries.  If an entry summary liquidates prior to the filling of a PSC, importers may file a protest.

Reminder:  When submitting an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise, please refer to CSMS 18-000657 (Entry Summary Order of Reporting for Multiple HTS in ACE).

Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.

 

FOR FURTHER INFORMATION

For further information, please refer to the USTR’s Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 FR 28710 (June 20, 2018); and the August 16, 2018 Notice of Action Pursuant to Section 301, 83 FR 40823 (August 16, 2018).
 
Questions related to Section 301 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to their Client Representative.
Last modified: 
May 15, 2019