USTR Establishes Product Exclusion Process for Fourth List of China-Origin Goods Subject to Section 301 Tariffs

11 min read

On October 21, 2019, the Office of the US Trade Representative (USTR) released a Federal Register notice inviting interested persons to request the exclusion of particular products from the 15 percent ad valorem tariff imposed on "List 4A" goods from China as of September 1, 2019, pursuant to Section 301 of the Trade Act of 1974.  The notice establishes the schedule and requirements for requesting product exclusions for List 4A goods and describes the criteria that USTR may consider when determining whether to exclude products.  The List 4A exclusion process is similar to the exclusion process for List 3 goods (please see the W&C US Trade Alert dated June 20, 2019) but does include some important changes.  Most notably, USTR has shortened significantly the effective period for List 4A exclusions, limiting it to one year from the tariffs’ September 1, 2019 implementation date (August 31, 2020).  This hard deadline removes an incentive for requesters to delay submission of their exclusion requests in an attempt to extend the duration of granted exclusions.

The List 4A exclusion request system will open at noon on October 31, 2019 and close at 11:59pm on January 31, 2020.  We provide below an overview of the List 4A exclusion process and key deadlines.


Product Exclusion Requests

USTR is inviting "interested persons," including trade associations, to submit requests for the exclusion of particular products from the additional duties imposed by the United States on approximately $112 billion worth of annual imports from China since September 1, 2019 (List 4A).  The list of products currently subject to such duties is set forth in Annex A to USTR’s Federal Register notice of August 20, 2019 (84 FR 43304) and is provided in the attached PDF.  An additional 15 percent duty on a second list of products set forth in the August 20 notice ("List 4B") is currently scheduled to take effect on December 15, 2019, and USTR may establish another exclusion process for this list should the tariffs go into effect.  

Unlike Section 301 Lists 1-3, Lists 4A and 4B cover significant quantities of consumer goods from China, including toys and sports equipment, footwear, textiles and clothing, and electronics (in addition to certain intermediate inputs and capital equipment, which were a primary focus of Lists 1-3).  A list of the general product categories covered by Lists 4A and 4B is provided below.  

Product Category Percentage of US Imports from China Affected by List 4A (Sept. 1)  Percentage of US Imports from China to be Affected by List 4B (Dec. 15) 
Toys and sports equipment 18% 82%
Footwear 45% 47%
Textiles and clothing 77% 13%
Electronics and electrical machinery 17% 41%
Stone and glass 30% 20%
Machinery 13% 36%
Vegetable products 41% 3%
Plastics and rubber 23% 20%
Wood products 20% 14%
Metals 17% 13%
Fuel 27% 0%
Chemicals 6% 13%
Prepared foodstuffs 12% 1%
Animal products 11% 2%
Transportation equipment 2% 2%
Miscellaneous 12% 6%

Source: Peterson Institute for International Economics (August 2019)

The schedule for the List 4A exclusion process is as follows:

  • USTR will begin accepting exclusion requests for List 4A goods on October 31, 2019 at noon EDT.
  • The deadline for submitting exclusion requests is January 31, 2020 at 11:59 PM EST.
  • Responses to individual exclusion requests are due 14 days after USTR posts the request on the online portal.
  • Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response.

Like the Section 301 exclusion process for List 3 goods, the new exclusion process for List 4A will utilize the online portal established by USTR at The web portal must be used to submit exclusion requests, responses to exclusion requests, and replies to responses. 


Exclusion Request Form and Information Requirements

Parties seeking an exclusion will be required to provide information regarding, among other things, the specific product in question, the requester’s efforts to source the product from US and third country sources, and the impact of the Section 301 duties on the requester and other US interests.  The information required by USTR is largely the same as that required for the List 3 exclusion process, except that, as noted below, USTR will now require requesters to disclose whether the product in question is subject to an antidumping or countervailing duty order issued by the US Department of Commerce.  

Product identification

Requests must include:

  • The 10-digit HTSUS subheading for the product subject to the exclusion request.  If no 10-digit subheading is available (i.e. the 8-digit subheading does not contain breakouts at the 10-digit level), requesters should use the 8-digit subheading and add "00".  USTR states that "[d]ifferent models classified under different 8-digit or 10-digit subheadings are considered different products and require separate exclusion requests."
  •  The product name and a detailed description of the product.  A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.)  Requesters may submit "a range of comparable goods within the product definition set out in an exclusion request.  Thus, a product request may include two or more goods with similar product characteristics or attributes."  USTR further states that "[g]oods with different SKUs, model numbers, or sizes are not necessarily different products." 
  • The product’s function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading.  Requesters may submit attachments that help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation).  Documents submitted to support a requester’s product description must be made available for public inspection and contain no business confidential information (BCI).  USTR will not consider requests that identify the product using criteria that cannot be made available for public inspection.
  •  Whether the product is currently subject to an antidumping or countervailing duty order issued by the US Department of Commerce.

Company-specific information

Requests must include:

  • Requester’s relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other); 
  • Specific data on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product that the requester purchased in 2017, 2018, and the first half of 2019. 
  • Requester’s gross revenues for 2018 and the first half of 2019.
  • Whether requester’s business meets the size standards for a small business as established by the Small Business Administration.
  • For imports sold as final products: the percentage of requester’s total gross 2018 sales for which sales of the Chinese-origin product accounted.
  • For imports used in the production of final products: (i) the Chinese-origin input’s share (%) of requester’s total cost of producing the final product(s); and (ii) the final product(s)’ share (%) of the requester’s total gross 2018 sales.

The required information regarding the requester’s purchases and gross sales and revenue is BCI, and the information entered will not be publicly available.

Rationale for exclusion

Each requester must address:

  • Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.  The requester’s responses will be made public.  If the product is not available outside of China or the requester is not sure of the product availability, the requester must provide an explanation for this conclusion and can determine whether this information is BCI or public.
  • Whether the requester has attempted to source the product from the United States or third countries.  The requester’s response will be made public. 
  • Whether the imposition of additional duties on the particular product will cause severe economic harm to the requester or other US interests.  The requester’s response will be treated as BCI. 
  • Whether the particular product is strategically important or related to "Made in China 2025" or other Chinese industrial programs.  The requester’s response will be made public. 

Requesters also must submit information about any exclusion requests they have submitted for products covered by the initial $34 billion tariff action (List 1), the additional $16 billion tariff action (List 2), and the additional $200 billion tariff action (List 3).  

Responses to Requests for Exclusions and Replies Thereto

After a request for exclusion of a particular product is posted on USTR’s online portal, interested persons will have 14 days to respond to the request, indicating support or opposition and providing reasons for their view.  After a response is posted on USTR’s online portal, the requester will have the opportunity to reply to the response using the same portal.  Any reply must be submitted within the later of 7 days after the close of the 14 day response period, or 7 days after the posting of a response.  All responses and replies to responses will be publicly available. 

Exclusion Determinations’ Retroactivity and Applicability

Exclusions granted for products on List 4A will have a shorter duration than those granted for products on Lists 1-3.  The FR notice states that any exclusions granted for List 4A goods "will be effective for one year, starting from the September 1, 2019 effective date of [the List 4A tariffs]," thus establishing a hard deadline of August 31, 2020 for a List 4A exclusion, regardless when it is requested or approved.  By contrast, exclusions granted for List 1 and 2 goods apply retroactively to the effective date of the applicable tariff and extend for one year past the date of publication of USTR’s exclusion determination in the Federal Register.  As a result, List 1 and 2 exclusions have had effective periods of substantially longer than one year.  USTR initially adopted this same rule for List 3 exclusions, but later amended the process "so as to adopt a uniform expiration date for exclusions granted for the [List 3 tariff action]" whereby "all exclusions from the [List 3 tariff action] will be effective from September 24, 2018, to August 7, 2020."  As a result of these changes, the effective periods for Section 301 exclusions vary significantly depending on the list on which the product is included:

  • List 1 and 2 exclusions are valid for substantially longer than one year (at least 17 months for List 1 exclusions and at least 23 months for List 2 exclusions);
  • All List 3 exclusions will be valid from September 24, 2018, to August 7, 2020 (a period of approximately 22.5 months); and
  • All List 4A exclusions will be valid for one year, from September 1, 2019 to August 31, 2020.   

USTR’s adoption of a hard deadline for List 4A exclusion requests may alter the strategies of requesters seeking to maximize the benefits of Section 301 exclusions.  Under the previous system, requesters had an incentive to delay submission of their exclusion requests, as exclusions granted later in the process have a longer effective period than those approved early in the process (for example, a List 1 exclusion granted in December 2018 will have an effective period of approximately 18 months, whereas a List 1 exclusion granted in October 2019 will have an effective period of approximately 27 months.)  However, under the new system for List 4A, requests granted later in the process will not enjoy any additional benefit.  

USTR has not stated whether exclusions granted for List 4A will be party-specific.  USTR has made exclusions for Lists 1-3 applicable to all imports of the product at issue regardless of whether the importer filed an exclusion request.  However, the List 4A exclusion notice does not specifically address this point.   

USTR will evaluate each exclusion request "on a case-by-case basis, taking into account the asserted rationale for the exclusion, whether the exclusion would undermine the objective of the Section 301 investigation, and whether the request defines the product with sufficient precision."  USTR will periodically announce decisions on pending requests, but is under no set timeframe to do so.



It is likely that USTR will receive a large volume of exclusion requests for products on List 4A, as it has during the exclusion processes for Lists 1-3.  Given the high volume of requests expected, the amount of information sought by USTR in connection with exclusion requests, and the significant delays experienced in the prior exclusion processes, it is expected that obtaining a decision on List 4A exclusion requests will be a lengthy process.  Given this possibility and the new hard deadline for granted exclusions, interested persons should begin preparing now to submit exclusion requests as soon as possible once the process opens on October 31. 

USTR’s notice may also indicate that the Trump administration does not intend to terminate the List 4A tariffs as part of the "Phase One deal" between the United States and China that President Trump announced on October 11 (please refer to the W&C US Trade Alert dated October 14, 2019.) If so, any such deal – and its economic effects – could end up being even more modest than initially reported.

USTR’s Federal Register notice is available here.  

This publication is provided for your convenience and does not constitute legal advice. This publication is protected by copyright.
© 2019 White & Case LLP

Service areas