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March 20, 2023

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USTR Finalizes Third List of Products from China that Are Subject to Additional Duties and Exclusion Process for List 2

Following a directive from the president, the United States Trade Representative (USTR) announced late on September 17 a finalized third list (List 3) of products from China that will be subject to additional retaliatory duties pursuant to USTR’s Section 301 Report findings.

These retaliatory duties cover an estimated $200 billion in imported Chinese products and entail 5,745 full and partial tariff line items. The subject products will be initially subject to a 10 percent tariff effective September 24, 2018, which will increase to 25 percent on January 1, 2019. The three-month window before escalating to a 25 percent tariff is intended to give U.S. businesses the opportunity to make necessary adjustments to ensure “alternative supplies.”

It is interesting to note that List 3 consists of two parts. Part 1 includes products classified at the eight-digit level within the Harmonized Tariff Schedule of the United States (HTSUS) that will be subject to the full 10/25 percent tariff assessment described above. Part 2 removes from List 3 a subset of products within certain tariff lines (e.g., at the 10-digit level).

Not surprisingly, China immediately countered that it will retaliate against President Trump’s new round of tariffs by assessing tariffs on an additional $60 billion in U.S. goods. If China retaliates in response to the new tariffs, President Trump has pledged to impose similar tariffs on another $267 billion in Chinese goods.

It is unknown at this time whether the USTR will permit interested parties to submit one-year exclusion requests from this new round of tariffs. Thus far, the USTR has offered this relief mechanism to Chinese products that are covered on List 1 and List 2 of the Section 301 proceedings.

List 2 Exclusion Request

As a related development, on August 16, 2018, the USTR published a formal notice for Section 301 List 2 tariffs. These products involve approximately $16 billion of Chinese goods, which, on August 23, 2018, became subject to a 25 percent tariff.

USTR formally announced on September 18 a procedure for interested parties to request that certain imported products on List 2 be excluded from the additional tariffs. The deadline for submitting exclusion requests for products on List 2 is December 18, 2018. As with the exclusion process for List 1, interested parties can formally comment on exclusion requests within 14 days of the date that the exclusion request is posted on Any replies to the responses are due the later of seven days after the close of the 14-day response period, or seven days after the posting of a response.

© 2023 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume VIII, Number 261

About this Author

Kathleen Murphy, International trade Lawyer, Drinker Biddle

Kathleen M. Murphy counsels clients on maximizing trade benefits, making informed global procurement decisions and developing domestic and international trade compliance programs. She represents clients in duty-recovery initiatives and customs challenges concerning tariff classification, valuation, Free Trade Agreements and country of origin determinations, among other areas. She guides clients through compliance audits and validations, as well as penalty investigations conducted by U.S. or foreign customs authorities. She also represents clients in...

Douglass Heffner, International trade lawyer, Drinker Biddle

Douglas J. Heffner litigates customs and international trade matters including antidumping duty, countervailing duty and safeguard cases. He represents foreign companies in Canada, Europe, Japan and Mexico, as well as domestic producers in industries that range from high-tech to heavy industry, to consumer and industrial goods. He also represents trade associations, government agencies and embassies in a broad range of matters.

William Rucker, Drinker Biddle Law Firm, International Trade and Customs Specialist

William R. “Randy” Rucker assists clients with all aspects of U.S. Customs law, including the classification and valuation of merchandise, country of origin and marking determinations, quantitative import restraints, duty-preference and savings programs, understanding and receiving the benefits of free trade agreements, compliance audits, enforcement actions and other trade-related matters.

In order to assist clients with their compliance efforts and satisfy "reasonable care" requirements, Randy frequently performs reviews of companies' internal...

Luke Karamyali, Drinker Biddle Law Firm, Chicago, International Trade Law Attorney

Luke J. Karamyalil assists his clients in all aspects of international trade laws and regulations, including import and export compliance. He also assists clients in ensuring their internal processes meet Customs’ “reasonable care” standard. Luke has experience helping clients navigate specific trade laws and regulations, including those that arise under the Foreign Agents Registration Act, the Trade Adjustment Assistance Program, anti-boycott compliance, Foreign Ownership, Control, or Influence (FOCI) mitigation, and anti-dumping and countervailing duties.