Restoration of Certain Chinese Tariff Exclusions by the USTR – International Trade & Investment

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On March 23, 2022, the Office of the United States Trade Representative (USTR) announced its decision to renew tariff exclusions for 352 categories of goods (approximately two-thirds of goods previously benefiting from exemptions) covered by the tariffs of Article 301 on Chinese products. The reinstated rate exclusions will come into effect retroactively from October 12, 2021 to December 31, 2022.

The renewed tariff exclusions cover a wide range of products, including auto parts, motors, electrical equipment, chemicals, textiles, consumer electronics, electrical equipment, LED/LCD, bicycles, motorcycles, seafood, medical equipment, building materials, robots, bags, pillows and household products. Renewed exclusions are available for any product that meets the product exclusion description, whether or not the specific importer has previously filed an exclusion request with the USTR. A full list of fare exclusions is available here.

In a statement released by the USTR last year, the USTR explained that key factors and criteria to consider in decisions about possible reinstatement include (1) whether the particular product and/or a comparable product is available from sources in the United States and/or third countries; (2) any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry development; (3) efforts, if any, that U.S. importers or buyers have undertaken since September 2018 to source products from the United States or third countries; and (4) domestic capacity to produce the product in the United States. The USTR also considered whether or not reinstating the exclusion would impact or result in serious economic harm to the commentator or other U.S. interests, including impact on small businesses, jobs, production manufacturing and critical supply chains.

At this time, there is no indication from the USTR that it will expand the list to include other products that were previously included in now-expired exclusions or that had not previously been granted an exclusion. However, it is possible that Congress will force the USTR’s hand. The House and Senate have announced that they will establish a conference committee to negotiate a bill that could potentially reinstate more expired Section 301 exclusions and require the USTR to consider new exclusion requests for any product covered by Section 301 tariffs.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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