Section 301 Tariffs Against China Are Now Finalized

Frank R. Samolis

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Section 301 Tariffs – Recent Developments

by: Frank R. Samolis, Rory Murphy of Squire Patton Boggs (US) LLP - Global Supply Chain Law

Tuesday, September 18, 2018

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In the past few months, the United States has rolled out three lists of Section 301 tariffs that it has imposed, or will soon impose, on products being imported from China. For each list there has been, or will soon be, both a public comment period – during which companies could ask for specific tariff lines to be removed from the proposed list of tariffs – followed by a product exclusion process – during which companies can ask that specific products imported under an effected tariff line to be excluded from the higher duty rates.

In the past 24 hours, there have been three significant developments:

The Trump Administration finalized List 3 of the Section 301 tariffs. Approximately 300 of the proposed 6,300 List 3 tariff lines were removed as a result of public comments. From September 24-December 31, 2018, products on List 3 will face an additional 10 percent duty. Starting on January 1, the additional tariffs on these products will increase to 25 percent.
This morning, China announced it would retaliate against the United States’ most recent action by imposing 5 or 10 percent tariffs on approximately 5,200 U.S. products worth $60 billion.
The Office of the U.S. Trade Representative (“USTR”) announced a product exclusion process for List 2 of the Trump Administration’s Section 301 tariffs via the Federal Register. Similar to the product exclusion process for List 1, requesters are encouraged to file using a yet-to-be-released form from USTR and asked to address whether (1) the product is available only from China, (2) the increased duties would cause severe economic harm to the requester or other US interests, and (3) the product is strategically important or related to “Made in China 2025” or other Chinese industrial programs. If an exclusion is granted under this process, it would apply retroactively to August 23. The product exclusion requests will be due December 18.

Finally, there are reports that China may cancel high-level bilateral meetings tentatively planned for later this month.

For your convenience, all of the upcoming deadlines are listed below.

List	Exclusion Process	Public Comment Period
List 1 (818 Tariff lines/$34 billion worth of Chinese products)	Product exclusion process open through October 9, 2018	Public comment period is closed. Tariffs imposed as of July 6.
List 2 (284 tariff lines/$16 billion worth of Chinese products)	Product exclusion process open through December 18, 2018	Public comment period is closed. Tariffs imposed August 23.
List 3 (approximately 6,000 tariff lines/$200 billion worth of Chinese products)	Product exclusion expected, but not announced.	Public comment period closed. Tariffs to be imposed September 24.