First Exclusions Granted for List 2 China Duties

On July 31, 2019, the Office of the United States Trade Representative (USTR) published a Federal Register notice granting the first exclusions of products from the 25-percent duty imposed on the second tranche (List 2) of Section 301 tariffs on goods worth approximately $16 billion. The published notice can be read here.
These exclusions will retroactively apply to goods entered into the U.S. as of August 23, 2018, and will extend for one year after the publication of this notice.
The exclusions are available for any importer whose product meets the specified product description set forth in the Annex to this notice, regardless of whether the importer filed any exclusion request or the exclusion has been previously denied.
The List 2 duties went into effect August 23, 2018, imposing additional 25-percent duties on goods of China classified in 279 different eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS). USTR subsequently announced a process to request product exclusions on September 18, 2018, which closed three months later on December 18.  Requestors were required to submit product information relating to the product’s physical characteristics and its principal use or function, the most applicable 10-digit subheading of the HTSUS, as well as the quantity and value of the Chinese-origin product that the requestor had purchased over the last three years. Additionally, USTR required requestors to address the following factors in the exclusion requests:

  • Whether the product is available only from China and specifically whether the product and/or a comparable product is available from sources in the United States and/or third countries.
  • Whether the imposition of additional duties on the product would cause severe economic harm to the requestor or other U.S. interests.
  • Whether the product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

Based on the evaluation of the above factors, USTR granted the product exclusions set out in the Annex to this notice. The exclusions are reflected in 69 specially-prepared product descriptions, which cover 292 separate exclusion requests.

For more information, please contact a BDO Customs and International Trade Services professional.