US Trade Representative Reinstates Certain Exclusions from Section 301 Tariffs on Products of China
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On March 23, 2022, the Office of the US Trade Representative (USTR) published a Federal Register notice reinstating tariff exclusions for 352 categories of products covered by the United States’ Section 301 tariffs on China-origin goods. The reinstated tariff exclusions cover certain types of machinery, motors, electrical equipment, chemicals, plastics, textiles, bicycles, motorcycles, and automotive parts, among other items. The reinstated tariff exclusions will apply retroactively to October 12, 2021 and will extend through December 31, 2022.
USTR’s decision to reinstate these tariff exclusions is the result of the "targeted tariff exclusion process" that USTR initiated in October 2021.1 Under this process, USTR allowed interested parties to request the reinstatement of certain tariff exclusions that USTR had previously granted and then extended, and that later expired between December 31, 2020 and April 18, 2021.2 Only 549 expired tariff exclusions were eligible for reinstatement under this process. USTR did not consider requests for the reinstatement of other expired exclusions, nor did it accept requests to establish new product exclusions.
The 352 tariff exclusions that USTR has determined to reinstate are listed in the Annex to USTR’s Federal Register notice. These reinstated exclusions will apply to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on October 12, 2021, that are not liquidated, or to entries that are liquidated, but within the period for protest described in section 514 of the Tariff Act of 1930, as amended.3 USTR has determined to extend the reinstated exclusions through December 31, 2022 and “may consider further extensions as appropriate.” As with all Section 301 tariff exclusions, the reinstated exclusions are available for any product that meets the description in the product exclusion, regardless of whether the importer filed an exclusion request with USTR.
Despite pressure from the US business community and some Members of Congress, USTR has given no indication that it intends to initiate a broader Section 301 exclusion process covering other expired exclusions (i.e., those that never received an extension from USTR), or products that have not previously received an exclusion. In June 2021, the US Senate approved legislation that would reinstate all expired Section 301 exclusions and require USTR to consider new exclusion requests for any product covered by the Section 301 tariffs. The Senate approved this legislation as part of a broader bill focused on US economic competitiveness, entitled the US Innovation and Competition Act (S.1260). However, the House of Representatives omitted the Section 301 legislation from its proposed alternative to S.1260 (the America COMPETES Act, H.R. 4521), based on the view that USTR should retain discretion over the Section 301 exclusion process.
In the coming weeks, the House and Senate are expected to form a conference committee that will attempt to reconcile differences between S.1260 and H.R. 4521. The Senate’s proposed language regarding Section 301 exclusions is likely to be a subject of debate in conference.
1 For an overview of this process, please refer to the W&C US Trade Alert dated October 6, 2021.
2 The list of expired exclusions that were eligible for reinstatement under this process can be viewed here.
3 19 U.S.C. 1514.
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