GDLSK: Grunfeld Desiderio Lebowitz Silverman & Klestadt LLP
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On May 7, 2019, the U.S. Trade Representative is expected to announce an increase in the additional duty rate applicable to Chinese-origin products listed on Section 301, Tranche 3. Currently those products are subject to an additional duty rate of 10% ad valorem. However, on May 6, 2019, U.S. Trade Representative Robert Lighthizer announced that on May 7, 2019 the USTR would publish a Federal Register Notice, raising the additional tariff rate to 25%.

The 25% duty would be assessed in addition to any regular duty rates that apply to the goods. In his May 6, 2019 statement, Ambassador Lighthizer indicated that the increase would be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01AM Eastern Standard Time on Friday, May 10, 2019.

Importers are permitted to elect the date of a vessel’s arrival in the port limits to serve as the entry date, pursuant to Customs’ Regulations at 19 C.F.R. Sec. 141.68(a)(3). For goods which are scheduled to arrive in the United States prior to May 10, 2019, this strategy can be used to accelerate the date of entry, and avoid the duty increase. The importer must specifically request that the date of arrival be deemed the date of entry when the entry documentation is filed with U.S. Customs. Accordingly, importers should contact their customs brokers to confirm that the appropriate declarations are made prior to entry.

To put this news in context, Section 301 of the Trade Act of 1974 grants the President authority to retaliate against foreign unfair trade practices. Under this authority, the Trump Administration has imposed additional duty rates on products of Chinese origin. The additional tariffs have been rolled out in three phases. Products covered by Tranche 1 and Tranche 2 were subject to an additional 25% duty rate, as of July 6, 2018 (Tranche 1) and August 23, 2018 (Tranche 2). Tranche 3 was subject to an additional 10% duty rate as of September 24, 2018. The third list would be the subject of the USTR notice and increase to 25%.

The Trump Administration has also signaled a willingness to apply Section 301 tariffs to all remaining Chinese-origin products, and products of the European Union. The process is already underway for goods imported from the EU and the USTR has published a list of products which could be subject to additional tariff rates of up to 100%. Information regarding the EU products and timeline is available here:

Our office is available to discuss opportunities for mitigating or eliminating the effects of the Section 301 tariffs.


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