Section 301 Exclusion Reinstatement:
Will this Affect your Company?
By Brandon French, Associate Attorney, Braumiller Law Group
The United States Trade Representative (USTR) recently released a notice and comment period for the possible reinstatement of certain Section 301 exclusions. The majority of all Section 301 exclusions expired on December 31, 2020. For a former Section 301 exclusion to be open for comment, it must have been previously extended at some point. For example, if an exclusion was originally set to expire in December 2019 and was never extended, then it was not eligible for this comment period. On the other hand, if an exclusion was set to expire in December 2019, and was subsequently extended through December 2020, a comment could have been submitted for the exclusion to be reinstated.
This comment period applied to all four Section 301 lists and closed on December 1, 2021. Some of the information that the USTR was looking for in each comment included (among other information):
- Availability of the merchandise outside of China;
- Changes in global supply chains since 2018;
- Efforts to source domestically since 2018; and
- Overall severe economic harm the Company will face without the reinstatement of the exclusion.
If an exclusion is reinstated, it will be retroactive with respect to merchandise entered on or after October 12, 2021, for entries that are not liquidated. Meaning, if an exclusion is reinstated, companies will be able to obtain refunds dating back to October 12th, as well as avoid paying the additional tariffs going forward (the USTR has not made it clear how long an exclusion would be reinstated for). While any refunds would be welcomed, many companies were hopeful that a successful exclusion reinstatement would yield a refund dating back to at least January 1, 2021, rather than the shorter time period.
For companies that did not submit individual comments, a quick review of the comment portal will show whether a different company supported (or opposed) the reinstatement of certain exclusions. For a searchable list of submitted comments, follow this link: https://comments.ustr.gov/s/docket?docketNumber=USTR-2021-0019. Once on the USTR’s comment portal, you can also search by submission ID (if you submitted your own comment), organization name, published exclusion number, exclusion product description, or date posted.
Although the time frame to submit a comment has recently expired, companies should be aware of the potential opportunity if certain exclusions are reinstated. For instance, even if a company did not submit a comment in support of reinstating certain exclusions, it could still take advantage of a successful reinstatement in the future. While the USTR has not provided a timetable for when it may release the list of reinstated exclusions, it seems likely it will occur sometime in the next 4-6 weeks.
For any additional inquiries, or if you would like to discuss the Section 301 reinstatement comment period in more detail, please contact Brandon French at Brandon@braumillerlaw.com.
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