12/16/2019
SECTION 301 TARIFFS:
US and China
Reach Phase One Trade Agreement
Today the USTR issued a press release and notice announcing that the US and China have reached a Phase One trade agreement, resulting in immediate changes to the implementation of Section 301 tariffs.
As a result of the agreement, the tariffs on Section 301 List 4B, originally scheduled for December 15, 2019 are suspended indefinitely.
Section 301 List 4A tariffs will be reduced from 15% to 7.5%, but the USTR has not specified when this change will happen or whether it will be retroactively effective. The USTR is expected to issue a notice in the near future reducing the rate. The 25% tariffs on Lists 1, 2 and 3 will remain in place.
The trade agreement reportedly will require “structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange,” in addition to China’s commitment to substantial U.S. goods purchases and a strong dispute resolution system.
LIST 3 EXCLUSIONS GRANTED: On November 29, 2019 and December 12, 2019, the USTR announced additional exclusions granted to products on List 3. CBP will issue instructions on entry guidance and implementation through its Cargo Systems Messaging Service.
All exclusions are available for any product that meets the description in the Annex to each notice and enumerated ten-digit HTSUS classification, regardless of whether the importer filed an exclusion request. The scope of each exclusion is governed by the scope of the product descriptions in the Annex, and not by the product descriptions set out in any particular request for exclusion. Clients may also benefit through filing Post-Summary Corrections or Protests for those entries now covered by a List 3 product exclusion to secure refunds plus interest.
Details of the granted exclusions are below.
LIST 3: The exclusions granted to List 3 products on November 29, 2019 are reflected in 32 specially prepared product descriptions, which cover 39 separate exclusion requests, outlined in the Annex to the notice.
The exclusions granted to List 3 products on December 12, 2019 are reflected in 9 ten-digit HTSUS subheadings and 35 specially prepared product descriptions, which cover 75 separate exclusion requests, outlined in the Annex to the notice.
These exclusions will apply as of the September 24, 2018 effective date of the $200 billion action, and are effective until August 7, 2020.