Companies may apply to extend their exclusions for an additional year through the public comment process. 

As the trade dispute between the United States and China continues, some companies that have received a reprieve may have an opportunity to seek another. On March 2, 2020, the United States Trade Representative (USTR) announced that it would open a process for one month only―March 12 through April 12, 2020―to permit public comment on whether it should allow companies who have received May 2019 exclusions for their Chinese-origin products to extend those exclusions for one year.

Although exclusions were initially set to expire on May 14, 2020, companies may apply to extend their exclusions for an additional year through the public comment process. The May 14, 2019, notice includes a complete list of excluded products and their 10-digit Harmonized Tariff Schedule numbers.

Products excluded in the May 14, 2019, action include various steel tools, filtering machinery, AC electric products, microscopes and other equipment. Without an exclusion extension for their Chinese-origin products, affected importers will begin paying additional duties of 25 percent on imports from China on May 14, 2020.

The USTR will evaluate the possible extension of each exclusion on a case-by-case basis. USTR’s evaluation will primarily focus on whether the particular product in question remains available only from China. In addressing this factor, commenters should discuss:

• Whether the product (or a comparable product) is available in the United States or from countries other than China;
• Any changes in the global supply chain for that product since July 2018 (or any other relevant industry developments);
• The efforts, if any, by affected importers or U.S. purchasers since July 2018 to source the product from the United States or third countries; and
• If the imposition of additional duties will result in severe economic harm to the commenter or other U.S. interests.

Importers and purchasers of Chinese products should also be prepared to discuss the quantity and value of their Chinese-imported goods from 2018 and 2019, as well as the values of quantities of the same product purchased domestically or from third countries. In disclosing the value of Chinese-origin products, commentators should also be prepared to discuss whether their Chinese suppliers have lowered prices for products covered by the exclusion following the imposition of the July 2018 duties. 

About Duane Morris

Attorneys in the firm’s International Group have considerable experience in assisting clients in developing duty-saving strategies. Toward this end, Duane Morris attorneys have prepared numerous Section 301 product exclusion requests that have been granted by the USTR.

For More Information

If you would like further information about this Alert and the process for seeking to have Section 301 product exclusions be extended, please contact Brian S. Goldstein, Geoffrey M. Goodale, J. Manly Parks, Nathan B. Reeder, any of the attorneys in our International Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.