On August 16, 2018, the United States implemented retaliatory tariffs of 25 percent on U.S. imports of 279 Chinese products covering an estimated trade value of $16 billion in 2018. This was in addition to the $34 billion in tariffs implemented in June 2018.
With these tariffs in place, the U.S. Trade Representative (USTR) has announced procedures to request the exclusion of products subject to this additional duty. In a notice published today in the Federal Register, the USTR has provided the criteria and detailed guidance for any product exclusion request application. Each request must specifically identify a particular product and provide supporting data and the rationale for the proposed exclusion. The USTR will not consider exclusion requests using criteria that cannot be made available to the public. Each request will be evaluated on a case-by-case basis. The USTR has specified, however, that the following information must be provided:
- Identification of the particular product in terms of the physical characteristics (e.g., dimensions, material composition, or other characteristics) that distinguish it from other products within the covered 8-digit subheading. The USTR will not consider requests that identify the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual use or chief use, or trademarks or tradenames. The USTR will not consider requests that identify the product using criteria that cannot be made available to the public.
- The 10-digit subheading of the HTSUS applicable to the particular product requested for exclusion.
- The annual quantity and value of the Chinese-origin product that the applicant purchased in each of the last three years.
Each exclusion request should address (1) whether the particular product is available only from China or whether a comparable product is available from other sources, (2) whether the imposition of the tariff will cause “severe economic harm to the requestor,” and (3) whether the product is strategically important to the “Made in China 2025” program or other Chinese industrial programs. There is a process for filing requests containing business confidential information; however, such submissions must also be accompanied by a public version of the request.
Parties interested in this Section 301 product exclusion process should be aware of the following dates and features of the process:
- The public will have until December 18, 2018, to file any requests to exclude a particular product.
- After a request is posted on regulations.gov under Docket USTR-2018-0032, the public will have 14 days to file responses to the request for product exclusion. Any replies to a response will be due the later of seven days after the close of the 14-day response period, or seven days after the posting of a response.
- Exclusions will be effective for one year upon the publication of an affirmative exclusion determination in the Federal Register, and will apply retroactively to August 23, 2018, when the tariff went into effect.
Once Docket USTR-2018-0032 is fully activated, the USTR will post an exclusion request form in the “Supporting Documents” section. While the form is not required, the USTR strongly recommends that interested parties use the form to submit exclusion requests.