Industry News

Section 301 China Imports

Section 301 China Imports

updated 04/04/2020

Let’s debrief the Section 301 situation

On August 18, 2017, The United States Trade Representative initiated an investigation into certain acts, policies and practices of the Government of China related to technology transfer, intellectual property and innovation (82 FR 40213). During the investigation, the Trade Representative determined that the acts, policies and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act of 1974, as amended (Trade Act).

In response, President Trump initiated a number of actions which imposed ad valorem tariffs on certain imports originating in China.

List 1, effective July 6, 2018 places an additional duty rate of 25% on $34 billion worth of goods from China. Several product exclusions have been announced.
List 2, effective August 23, 2018 places an additional duty rate of 25% on $16 billion worth of goods from China. Several product exclusions have been announced.
List 3, effective September 24, 2018 places an additional 10% on $200 billion worth of goods from China, and an increase up to 25% of these goods was imposed on June 15, 2019. Several product exclusions have been announced.
The jump from 25% to 30% on List 1, 2, and 3 was canceled on October 15, 2019.
List 4a went into effect on September 1, 2019 at 15%.  Tariffs for this list decreased to 7.5% effective February 14, 2020.  Product exclusions have been announced.
List 4b
 was originally scheduled for December 15, 2019 with a 15% ad valorem duty rate, but has been canceled due to a Phase One Trade deal between U.S. and China.

To search the Tariff List, click here.


View More Details on each List below:


List 1

Download List 1

List 2

Download List 2

List 3

  • effective September 24, 2018
  • originally placed an additional 10%
  • and increased to 25% on May 10, 2019 June 15, 2019
  • on $200 billion worth of goods from China
  • Several exclusion sets have been announced.  View the List 3 Product Exclusions Fact Sheet.
  • increase to 30% on October 15, 2019
    No increase from 25% to 30% on October 15 as indicated in U.S. China “Phase 1” Agreement

Download List 3

List 4

  • List 4a effective September 1, 2019 @ 15%
  • List 4a effective February 14, 2020 decreases from 15% to 7.5%
  • List 4b effective December 15, 2019
    List 4b canceled according to Signed U.S. – China “Phase One” Trade Deal
  • on $267 billion worth of goods from China
  • List 4 essentially encompasses all other goods originating from China.
  • Several exclusion sets have been announced.  View the List 4 Product Exclusions Fact Sheet.

View List 4a

View List 4b

Download List 4


What to do

There are a number of things you can do.  Scarbrough Consulting, Inc. is offering a free 30-minute consultation to any company that may be affected by the Section 301 announcements.  Please send an email to consulting@scarbrough-intl.com or fill out the form below.  Our Global Trade Experts and Licensed Customs brokers are here to help, whether it’s duty drawback, product exclusions via post summary corrections or protests, or simply helping you to optimize your supply chain and add to your bottom line.  We have listed just a couple below, but there are other things to think about when it comes to your overall supply chain, and we are here to help.

Consulting Request

Enter your information below and our team will be in touch with you via email. Thanks!

Want to Recover Duty paid to CBP?

Duty Drawback is allowed on Section 301 products (but not on Section 232).  Ask our team for more information if you are using Chinese components to produce items that are re-exported out of the USA.  There are other ways to save money on duty.  Check out our recorded Duty Savings Opportunities Q&A Session.

Product Exclusions

The exclusion process can be applied to qualified HTS numbers, regardless if the importer was the petitioner or not.  If the number qualifies within the correct time frame, an importer can receive a refund for duties already paid on those HTS numbers via post summary corrections or protests.  Scarbrough can file those entries on your behalf. To view more about the process and what items are approved product exclusions, click here.

Check out the MTB Act

On September 13, 2018, President Trump signed into law: H.R. 4318, the “Miscellaneous Tariff Bill Act of 2018,” which provides for duty suspensions and reductions for certain products entered into consumption on October 13, 2018 through December 31, 2020.

The Miscellaneous Tariff Bill (MTB) reduces or completely eliminates duty on 1,660 imported products not manufactured or available domestically.  This is BIG news for manufacturers!  Even if you’re a manufacturer importing from China, you can benefit!

Because several of the products that qualify for a reduced duty rate are from China, they are still subject to Section 301 additional tariffs.  So, although an importer may have just discovered its qualification for duty reduction, it will still need to consider the additional 25% on required HTS numbers from China…. but at least the importer will still benefit since it is not required to pay the entire sum of the two duty rates had the MTB Act not passed. You can view a valid example and download a handy spreadsheet from this blog post.


Other ways to Learn More about Duty Savings

If the Section 301 tariffs are affecting your company, watch this webinar recording to learn more.  Scarbrough’s President and COO, Adam Hill, along with Patrick Caulfield, an attorney at GDLSK, an international trade and customs law firm, talk about legal opportunities to recover or avoid paying duty to CBP.  This is an interactive webinar set up as a question/answer forum.

Consulting

Scarbrough is offering a FREE 30-minute consultation to any importer affected by the Section 301 Tariffs. Email consulting@scarbrough-intl.com or fill out the form below.

Consulting Request

Enter your information below and our team will be in touch with you via email. Thanks!

Resources

To read more about Section 301, visit USTR.gov

To search the tariff list, click here.


About Scarbrough

The Scarbrough Group of Companies, headquartered in Kansas City with local presence in every major port in the world, is a complete international and domestic supply chain service provider, offering U.S., Mexican, and Canadian Customs brokerage, Import & Export Transportation Solutions, Domestic brokerage and asset-based trucking, Warehouse fulfillment and distribution services, Trade Compliance Consulting, Large Equipment and Project Cargo moves, as well as Parcel Audit Savings.  Scarbrough is widely known for its trade experts, training, personalized customer service, customized solutions, and data analytics tools.  Since 1984, Scarbrough has continued to satisfy its clients by following its motto on a daily basis: “It is our job to make your job easier.”  Moreover, our team of experts is available at your disposal.  We offer free consultations on any topic from supply chain optimization and duty savings opportunities to the basics, helping to guide new importers and exporters as they jump into the world of global trade.  Contact us now.