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USTR CONSIDERING APPLYING A 25% DUTY RATE TO SECTION 301 PROPOSED LIST 3

At the direction of the President, the Office of the United States Trade Representative (USTR) has announced that it is considering increasing the proposed rate of additional duty from 10% to 25% for the third proposed list of tariff items on goods from China (“List 3”) to become subject to additional duties under Section 301 of the Trade Act of 1974.

When USTR released Proposed List 3 on July 10, 2018, it indicated that covered tariff items would become subject to an additional 10% duty. Now, USTR is stating that the proposal to increase the duty rate to 25% is intended to encourage China to change its adverse trade practices that were identified in USTR’s Section 301 report.

In light of this significant proposed change, USTR has amended the time frames for commenting on Proposed List 3. Most importantly, the deadline for submitting written comments has been extended and USTR has reopened the period for requesting to appear at the public hearing. The revised schedule is as follows:

• Requests to testify at the public hearing must be filed by August 13, 2018.

• Written comments must be filed by September 5, 2018.

• The public hearing will take place August 20-23, 2018.

• Rebuttal/post-hearing comments will be due on September 5, 2018.

Parties intending to participate in the public hearing should consider submitting their comments by August 17 so that they can be reviewed by the Section 301 Committee in advance of their testimony. We anticipate that the public hearing will be extended past August 23 in light of the large number of interested parties that have already requested to appear.

Proposed List 3 covers over 6,000 tariff lines and is available at:

https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

We are available to discuss options for responding to these developments such as comment submissions to USTR, requests to appear at the public hearing, exclusion requests, classification reviews, and valuation strategies. If you have specific questions, please contact our office.

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