By Jennifer Horvath, Senior Associate Attorney, BLG
Today, June 15th, 2018, the Office of the United States Trade Representative (USTR) released the list of products which will become subject to the additional Section 301 tariff. The tariffs were announced to become effective beginning July 6, 2018. The government is imposing an additional 25% ad valorem duty on products imported under the tariff lines in the Section 301 list. U.S. Customs and Border Protection will begin collecting the additional 25% on the effective date, and will likely shortly release guidance on entering items subject to Section 301.
It is important to note that the Section 301 additional duty is assessed based solely on the identified tariff numbers in the published list, which covers a range of items. Unlike reviewing antidumping or countervailing duty applicability to determine if a specific product is covered under the order scope, products imported under a tariff number included in the Section 301 list are automatically subject to the additional tariff.
Products subject to 301 tariffs are being identified in two phases. There is an initial list of 818 tariff lines covering items which are officially listed as subject to the tariffs beginning July 6th. The finalized tariff lines for subject items were reduced from the originally proposed set of 1,333 tariff lines covering products. This initial list represents $34 billion of imports from China, and includes the products which were initially proposed in April to be subject to Section 301 impositions. Televisions and cell phones were removed from this initial list, although some automotive parts including clutches, along with aircraft parts, and items relating to information and communications technology, robotics, industrial machinery, and new materials sectors and other industry items, are included in the official list of subject tariff lines. This initial list can be found here: https://ustr.gov/sites/default/files/enforcement/301Investigations/List%201.pdf
The USTR will also review a secondary list of items proposed to be subject to the 301 tariffs. This list comprises 284 tariff lines, which cover approximately $16 billion worth of imports from China. The second list will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties. The secondary list of proposed items is here: https://ustr.gov/sites/default/files/enforcement/301Investigations/List%202.pdf
The USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. It will issue a notice in the Federal Register with details regarding this process within the next few weeks.
As background, Section 301 tariffs are aimed at products imported from China as part of the U.S. response to China’s unfair trade practices related to improperly obtaining U.S. technology and intellectual property. The proposed list of 1,333 tariff lines for products was first introduced on April 6, 2018.