United States Trade Representative (USTR)

On October 4, 2021, United States Trade Representative (USTR) Katherine Tai delivered a speech at the Center for Strategic and International Studies (CSIS) detailing the Biden Administration’s new strategy for managing U.S.-China trade relations. Tai announced that the USTR will restart a targeted tariff exclusion process for Section 301 duties. Today (October 6) the USTR published a request for comments regarding possible reinstatement of certain exclusions to the Section 301 tariffs visible here. The exclusion process covers 549 products for which the prior Administration granted exclusion extensions, most of which expired on December 31, 2020.  See here for the list of covered products   The USTR is seeking public comments on whether or not to further extend the exclusion from 301 tariffs on these products.  The comment period opens October 12 and closes December 1 and 11:59 PM EST and can be accessed here.

The factors the USTR will consider in deciding whether or not to extend exclusions are similar to those considered in the prior Administration, including:

  1. whether the particular product is available in the United States or other countries;
  2. how changes in the global supply chain since September 2018 or any other relevant industry developments have impacted product availability;
  3. the efforts the importers or U.S. purchases have undertaken since September 2018 to source the product from the U.S. or other countries; and
  4. domestic capacity for production in the United States.

The USTR is also considering additional criteria for granting exclusions, such as whether or not reinstating the exclusion will impact or result in severe economic harm to the commenter or to other U.S. interests, such as small businesses, employment, manufacturing, or critical supply chains. It remains to be seen if other criteria, possibly relevant to broader administration goals such as promoting efforts to advance climate change, might also be considered.

If the USTR reinstates exclusions, then such exclusions would be reinstated retroactively. Importers may seek 301 duty refunds on all subject entries that are not “liquidated” by U.S. Customs and Border Protection (CBP) at the time the importer makes a claim for a refund with CBP.  CBP typically liquidates an entry 314 days after entry, so the sooner importers file for and receive an exclusion extension the greater the potential duty refunds.
Continue Reading U.S.-China Trade: USTR Restarts Tariff Exclusion Process for Section 301 Duties