On January 22, 2020, the US Trade Representative (USTR) published in the Federal Register a notice of modification of action (an advance copy of which was previously posted on the USTR website on Jan. 15) reducing the rate of additional duty on certain products of China (List 4A) from 15 percent to 7.5 percent. The reduction will be applicable as of 12:01 am Eastern Standard Time on February 14, 2020, for products covered by Annex A of the August 20, 2019 notice (84 Fed. Reg. 43304).
On August 20, 2019, the USTR, at the direction of the President, determined to modify the action being taken in the Sec. 301 investigation by imposing an additional 10 percent ad valorem duty on products of China with an annual aggregate trade value of approximately $300 billion. The tariff subheadings subject to the 10 percent additional duties were separated into two lists with different effective dates. The list in Annex A had an effective date of September 1, 2019. The list in Annex C had an effective date of December 15, 2019.
Subsequently, at the direction of the President, USTR determined to increase the rate of the additional duty applicable to the tariff subheadings covered by the action announced in the August 20 notice from 10 percent to 15 percent. See 84 Fed. Reg. 45821 (August 30, 2019). On December 18, 2019, at the direction of the President, USTR determined to suspend indefinitely the imposition of the additional 15 percent ad valorem duty on products covered by Annex C of the August 20 notice. See 84 Fed. Reg. 69447 (December 18, 2019) because China and the United States were engaging with the goal of obtaining the elimination of the acts, policies, and practices covered in the investigation. On December 13, 2020 a phase one agreement was reached.
The United States and China signed a phase one agreement on January 15, 2020 [see article above], and the agreement is scheduled to enter into force 30 days thereafter on February 14, 2020. In light of the scheduled entry into force of the phase one agreement, and at the direction of the President, the USTR has determined that the action announced on August 20, 2019, as modified by the August 30 notice, no longer is appropriate. Specifically, and in accordance with the President’s direction, the USTR has determined to reduce the level of additional duties from 15 percent to 7.5 percent on products of China covered by Annex A of the August 20 notice, effective February 14, 2020.
Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am (EST) on February 14, 2020, the Annex to the notice amends subchapter III of chapter 99, HTSUS:
- By amending U.S. Note 20(r), as established by the U.S. Trade Representative in a determination contained in 84 FR 43304 (August 20, 2019), and as modified by 84 FR 45821 (August 30, 2019), by deleting “15 percent” each place that it appears, and inserting “7.5 percent” in lieu thereof; and
- By amending the Rates of Duty 1-General column of heading 9903.88.15, as established by the U.S. Trade Representative in a determination contained in 84 FR 43304 (August 20, 2019), and as modified by 84 FR 45821 (August 30, 2019), by deleting “15%”, and inserting “7.5%” in lieu thereof
