The Trump Administration Initiates a Tariff Exclusion Process for Chinese Imports Provided in List 3
On May 21, the Office of the United States Trade Representative (USTR) established a process through which U.S. stakeholders may exclude products included in List 3 from a 25% tariff imposed pursuant to the investigation of China’s intellectual property practices under Section 301 of the Trade Act of 1974 (“Section 301”) (discussed here). The window to submit exclusion requests will open “on or around” June 30.
Similar to the product-exclusion procedures for Lists 1 and 2, USTR is requesting that each product exclusion request be tailored to a specific product. In other words, a single request cannot identify more than one unique product even if the products fall within the same 10-digit tariff classification (HTSUS) code.
In connection with its evaluation of the requests, USTR has requested information regarding the following factors:
- Whether the particular product is available only from China, i.e. whether the product or a comparable product is available from sources in the U.S. or other third countries;
- Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests; and
- Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
With respect to (1), USTR has requested more detailed information than that requested in prior product exclusion rounds. For example, the form to be used for List 3 exclusion requests (“Form”) asks for specific information on the availability of the product from non-Chinese manufacturers and attempts to source the product from such firms. It also requests the value and quantity of purchases of the subject product from domestic sources as well as third countries.
The Form also requires additional information regarding the impact of the tariff actions. For example, a requester must indicate whether it filed an exclusion request for the Section 301 List 1 and and/or List 2 tariff actions and the value of the requesting company’s imports subject to the tariff actions for which it previously submitted requests. These questions are in addition to those that have been requested in prior forms regarding the value of the Chinese-origin product as a share of the requesting company’s gross sales.
Within 14 days after USTR posts a request for exclusion, interested persons will be allowed to submit a response with reasons they support or oppose the request. A reply to the response may be submitted seven days after the response is posted.