USTR Extends Exclusions from China Section 301 Tariffs

The Office of the United States Trade Representative (USTR) has announced an extension of reinstated and COVID-related exclusions from the China Section 301 tariffs until May 31, 2024. Originally set to expire on December 31, 2023, this extension allows for public comments and aligns with the ongoing four-year review.

“The extension will enable the orderly sunsetting of the exclusions,” the USTR said.  Additional time could be granted to “enable shifts in sourcing to the United States or third countries.”

The USTR's decision, detailed in a Federal Register Notice, aims to review these exclusions in line with statutory factors and objectives, particularly assessing potential sourcing shifts to the United States or third countries. Public comments are encouraged to inform further extension decisions.

In September 2023, the USTR extended 352 reinstated exclusions and 77 COVID-related exclusions. These measures are part of the U.S.'s response to China's practices in technology transfer, intellectual property, and innovation.

Public comments on the extended exclusions will be accepted from January 22, 2024, to February 21, 2024, via the online portal at http://comments.USTR.gov. Queries regarding customs classification or implementation of the exclusions can be directed to traderemedy@cbp.dhs.gov.

This extension falls under the USTR's broader investigation into China's trade practices, involving additional duties on Chinese products in four tranches since 2018. The USTR has consistently solicited public feedback on exclusions, reflecting its commitment to engaging stakeholders in trade policy decisions.

Each exclusion will be evaluated based on the availability of the products from non-China sources, efforts to source from the U.S. or third countries, and the necessity of additional time for sourcing shifts. The impact of these extensions on U.S. interests, including their effect on addressing China’s acts, policies, and practices under investigation, will also be considered.

The public docket will detail specific procedures for commenting on the exclusions, with required information including contact details, the exclusion under comment, and the reasons for supporting or opposing its extension.

Customs Update:

CSMS # 58869963 - GUIDANCE: Extension of Section 301 China Product Exclusions

The purpose of this message is to provide guidance on the further extension of the 352 reinstated Section 301 exclusions and 77 COVID-related Section 301 exclusions until May 31, 2024.

BACKGROUND

On December 26, 2023, the United States Trade Representative (USTR) issued press release: USTR Extends Exclusions from China Section 301 Tariffs to Allow for Comments on a Review of the Exclusions and Alignment with Four-Year Review | United States Trade Representative, extending the 429 product specific exclusions still in effect (352 reinstated exclusions and 77 COVID-related exclusions) through May 31, 2024. See 88 FR 90225.

The 352 reinstated Section 301 product exclusions are listed in Annex A to FRN 87 FR 17380. The 77 COVID-related exclusions are listed in Annex B to FRN 88 FR 31580. 

Automated Commercial Environment (ACE) functionality for the acceptance of the extended product exclusions will be available on January 4, 2024, as of 7 am eastern standard time.

GUIDANCE

Instructions for importers, brokers, and filers on submitting entries to CBP containing granted exclusions by the USTR from the Section 301 measures are set out below:

• U.S. notes 20(ttt)(i), 20(ttt)(ii), 20(ttt)(iii), and 20(ttt)(iv) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) are modified by deleting ‘‘January 1, 2024,’’ and by inserting ‘‘June 1, 2024,’’ with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on January 1, 2024, and before 11:59 p.m. eastern daylight time on May 31, 2024. 
  • Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.67 is submitted.
• U.S. notes 20(uuu)(i), 20(uuu)(ii), 20(uuu)(iii), and 20(uuu)(iv) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) are modified by deleting ‘‘January 1, 2024,’’ and by inserting ‘‘June 1, 2024,’’ with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on January 1, 2024, and before 11:59 p.m. eastern daylight time on May 31, 2024.
  • Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.68 is submitted.

ADDITIONAL INFORMATION

Imports which have been granted a product exclusion from the Section 301 measures and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146. 

To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe.  If the entry is beyond the PSC filing timeframe, importers may protest the liquidation if within the protest filing timeframe.  The latest guidance on the process for submitting retroactive claims for product exclusions to CBP is found in CSMS 42566154.

Specifically, if importers enter Chinese goods during the gap period, January 1 through January 3, 2024, subject to the extended exclusions under HTSUS 9903.88.67 or HTSUS 9903.88.68, and pay Section 301 duties, importers should file a PSC on or after January 4, 2024 to obtain a refund of duties paid.

Reminder:  importers, brokers, and/or filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise.

For ease of reference, a summary of Section 301 duties and product exclusion notifications is attached.

Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. Questions related to Section 301 entry-filing requirements, please refer to CSMS message #CSMS #52417905 (Information on Trade Remedy Questions and Resources) CSMS #52417905 - UPDATE: Information on Trade Remedy Questions and Resources (govdelivery.com).