On November 13, 2019, the US Trade Representative (USTR) published in the Federal Register a notice (previously posted as an advance copy) that announces USTR’s determination to grant certain exclusion requests, as specified in the annex to the notice from the additional duties on goods of China with an annual trade value of approximately $200 billion (Tranche 3) as part of the action in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
Effective September 24, 2018, USTR imposed additional 10 percent duties on goods of China classified in 5,757 full and partial subheadings of the Harmonized Tariff Schedule of the United States (HTSUS), with an approximate annual trade value of $200 billion. See 83 Fed. Reg. 47974, as modified by 83 Fed. Reg. 49153. In May 2019, USTR increased the additional duty to 25 percent. See 84 Fed. Reg. 20459. On June 24, 2019, USTR established a process by which U.S. stakeholders may request exclusion of particular products classified within an 8-digit HTSUS subheading covered by the $200 billion action from the additional duties. See 84 Fed. Reg. 29576 (the June 24 notice).
The June 24 notice required submission of requests for exclusion from the $200 billion action no later than September 30, 2019, and noted that USTR would periodically announce decisions. In August 2019, USTR granted an initial set of exclusion requests. USTR granted additional exclusions in September and October 2019. USTR regularly updates the status of each pending request on the USTR Exclusions Portal at https://exclusions.ustr.gov/s/PublicDocket.
Based on the evaluation of the factors set out in the June 24 notice, USTR has determined to grant the product exclusions set out in the Annex to the notice. USTR’s determination also takes into account advice from advisory committees and any public comments on the pertinent exclusion requests.
As set out in the Annex, the exclusions are reflected in 2 ten-digit HTSUS subheadings and 34 specially prepared product descriptions, which cover 42 separate exclusion requests.
In accordance with the June 24 notice, the exclusions are available for any product that meets the description in the Annex, regardless of whether the importer filed an exclusion request. Further, the scope of each exclusion is governed by the scope of the product descriptions in the Annex, and not by the product descriptions set out in any particular request for exclusion.
- Paragraph A, subparagraphs 1 and 2 establish a new subheading, 9903.88.34 and a new US note 20(mm) to subchapter III of chapter 99 to cover the products granted exclusions;
- Paragraph A, subparagraphs 3–5 are conforming amendments to the HTSUS reflecting the modification made by the Annex. As stated in the September 20, 2019 notice, the exclusions will apply from September 24, 2018, to August 7, 2020.
U.S. Customs and Border Protection will issue instructions on entry guidance and implementation.
USTR will continue to issue determinations on pending requests on a periodic basis.
