Industry News

Section 301 China Imports

Section 301 China Imports

updated 11/26/2019

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.
List 2, effective August 23, 2018 places an additional duty rate of 25% on $16 billion worth of goods from China.
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.
List 1, 2, and 3 tariffs currently at 25%.  The jump from 25% to 30% on October 15, 2019 has been cancelled. There are some exceptions to these tariffs through a product exclusion process.
List 4a went into effect on September 1, 2019 and List 4b is scheduled for December 15, 2019, both currently at a 15% ad valorem duty rate.


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
  • 5 sets of exclusions have been announced
  • 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
  • List 4b effective December 15, 2019
  • places an additional duty rate of 15%
  • on $267 billion worth of goods from China
  • List 4 essentially encompasses all other goods originating from China.
  • Exclusion Process open October 31, 2019 until January 31, 2020

View List 4a Effective Sept 1

View List 4b Effective Dec 15

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 and 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.

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.

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.

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.

 


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 review Section 301, visit this helpful Resource Page

Download each Section 301 List below:

View List 4a Effective Sept 1

View List 4b Effective Dec 15


Section 301 List 1
Section 301 List 2 Section 301 List 3

 


Last Chance to Talk to the Experts

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!