On August 20, 2019, the Office of the US Trade Representative (USTR) published in the Federal Register a notice of modification of the Section 301 action imposing additional tariffs on Chinese goods. The Modification imposes additional duties of 10 percent ad valorem on products of China classified in the tariff subheadings set out in the Annexes to the notice (List 4). [An advance copy of the notice was originally posted on the USTR website on August 14, 2019] The additional 10% duties on the tariff subheadings set out in Annexes A and B to the notice are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after September 1, 2019. The additional 10% duties on the tariff subheadings set out in Annexes C and D to the notice are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after December 15, 2019.
The proposed list of products was published in the Federal Register on May 17, 2019 (84 Fed. Reg. 22564) for public comment. Certain tariff subheadings proposed in the May 17 notice have been removed from the final list of tariff subheadings subject to additional duties, based on health, safety, national security, and other factors. In addition, the tariff subheadings subject to the 10 percent additional duties are separated into two lists with different effective dates – Annex A contains the formal Harmonized Tariff Schedule of the United States (HTSUS) language for list 1, and Annex B contains an informal description of the products in list 1. List 1 includes tariff subheadings where China’s share of US imports from the world is less than 75 percent for each subheading. For list 1, the additional duty of 10 percent ad valorem is effective for products of China that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on September 1, 2019. Annex C contains the formal HTSUS language for list 2, and Annex D contains an informal description of the products in list 2. List 2 includes products where China’s share of US imports from the world is 75 percent or greater for each subheading. To provide a longer adjustment period for US interested persons, the additional duty of 10 percent ad valorem for list 2 is delayed and will apply to products of China that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am eastern daylight time on December 15, 2019.
In order to implement this determination, effective September 1, 2019, subchapter III of chapter 99 of the HTSUS is modified by Annexes A and C of the notice. Any product listed in Annex A, except any product that is eligible for admission under ‘domestic status’ as defined in 19 C.F.R. 146.43, which is subject to the additional duty imposed by the determination, and that is admitted into a US foreign trade zone on or after 12:01 am eastern daylight time on September 1, 2019, only may be admitted as ‘privileged foreign status’ as defined in 19 C.F.R. 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
Any product listed in Annex C, except any product that is eligible for admission under ‘domestic status’ as defined in 19 C.F.R. 146.43, which is subject to the additional duty imposed by the determination, and that is admitted into a US foreign trade zone on or after 12:01 am eastern daylight time on December 15, 2019, only may be admitted as ‘privileged foreign status’ as defined in 19 C.F.R. 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
USTR will establish a process by which interested persons may request that particular products classified within an HTSUS subheading covered by Annex A and Annex C be excluded from the additional duties. USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request.
