Grace Period for Increase in Section 301 China Tariffs

May 2019

On May 9, 2019, the United States Trade Representative (USTR) published a Federal Register notice increasing the duty rate on the third tranche (List 3) of Section 301 tariffs for goods originating in China to 25 percent, effective May 10, 2019.  In the same notice, the USTR specified that the duty increase applies to goods (i) entered for consumption or withdrawn from warehouse for consumption on or after 12:01 a.m. eastern daylight time on May 10, 2019, and (ii) exported to the U.S. on or after May 10, 2019.  The published notice can be read here.
 
Following the recent duty increase, on May 10, 2019, the U.S. Customs and Border Protection (CBP) issued guidance clarifying that goods “on the water” must be entered before June 1, 2019, to avoid the tariff increase.
 
The 10 percent duty remains in effect for List 3 Chinese goods exported before May 10, 2019, and that entered the U.S. before June 1, 2019.  The 25 percent duty will apply to List 3 Chinese goods entered into the U.S. on or after June 1, 2019 regardless of the export date. The full CBP message can be read here.
 
In addition, the USTR stated in its notice that List 3 goods admitted into a U.S. Foreign Trade Zone (FTZ) in what is called “privileged foreign status” will retain that status and, when entered into the U.S. for consumption, will be subject to the Section 301 additional tariff rate in effect at the time of FTZ admission.
 
For more information, please contact a BDO Customs and International Trade Services professional.
 

CONTACT:
 
Damon V Pike
Principal
  James Pai
Senior Manager

 
Yun Gao
Manager
  Jay Cho
Senior Associate

 
Travis Fournier
Manager