In response to China’s imposition of retaliatory duties on goods from the United States, the Office of the United States Trade Representative (USTR) has released a third proposed list of tariff items to become subject to an additional 10% duty under Section 301 of the Trade Act of 1974.
The first list (“List 1”) covers 818 tariff lines. List 1 became effective on July 6, 2018. Goods covered on List 1 are now subject to an additional 25% duty. List 1 can be accessed at: https://ustr.gov/sites/default/files/enforcement/301Investigations/List%201.pdf
The second proposed list (“List 2”) consists of 284 tariff items and is currently in the notice and comment phase. Upon becoming final, items covered by List 2 would become subject to an additional 25% duty. List 2 can be accessed at: https://ustr.gov/sites/default/files/enforcement/301Investigations/List%202.pdf
On July 10, 2018, USTR released a third proposed list (“List 3”) covering over 6,000 tariff lines that, if implemented, would subject these goods to an additional 10% duty. According to USTR, this list targets imports from China having approximately $200 billion in annual trade value. List 3 products include meat, fish and foods; tobacco; chemicals; rubber goods; leather (but not footwear); luggage and bags; certain apparel items; articles of wood (including paper); textiles; carpets; cutlery; metals; machinery; motor vehicle parts; and many other items. The full proposed List 3 is available at: https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf
Like Lists 1 and 2, proposed List 3 will be subject to comment process prior to being finalized. The critical dates of the comment process are as follows:
• Requests to testify at the public hearing must be filed by July 27, 2018.
• Written comments must be filed by August 17, 2018.
• The public hearing will take place August 20-23, 2018.
• Rebuttal comments will be due on August 30, 2018.
Importers and other interested parties should consider filing comments and appearing at the public hearing to make the case that particular tariff items should be excluded from List 3. Following the comment period for List 1, over 500 tariff lines were removed from the original proposed list. USTR requests that commenters address specifically whether imposing increased duties on a particular tariff item would be practicable or effective to obtain the elimination of China’s current (adverse) acts, policies, and practices that were identified in USTR’s initial Section 301 determination, and whether maintaining or imposing additional duties on a particular listed product would cause disproportionate economic harm to U.S. interests, including small or medium-sized businesses, and consumers.
In the event that List 3 is implemented, we anticipate that there will be a process for applying for product-specific exclusions, as there is currently for List 1 items. (For details, see http://www.gdlsk.com/ustr-releases-exclusion-request-process-for-chinese-products-subject-to-section-301-tariffs/).
We are available to discuss options for responding to these developments such as classification reviews, comment submissions to USTR, exclusion requests, and valuation strategies. If you have specific questions, please contact our office.