The USTR Publishes Final Section 301 Duty List With An Eye Towards Adding More

The first list (Sec. 301 – Tariff List 1) is a culmination of a process that started on April 13, 2018 when the USTR published an initial list of products that would be subject to an additional 25 percent ad valorem tariff. Products from China that are on Tariff List 1 will be subject to the additional 25 percent duty, effective July 6, 2018. The second list (Sec. 301 – Tariff List 2) contains 284 additional product lines that will now undergo further review. Pharmaceutical products, textiles, apparel, and footwear do not appear on the two lists released today.

Sec. 301 – Tariff List 1

This list covers 818 product lines worth approximately $34 billion in Chinese imports. Approximately 515 product lines from the initial proposed list were removed. The 25 percent tariff on products imported from China under the 8-digit HTS subheadings included on the final list will take effect on July 6, 2018. The final list removed items from HTSUS Chapters 29, 30, 72, 73, 76, 93, and other products. We have prepared an analysis of the products that were removed from the initial list, and those that remain on  the final list. To receive a copy, please contact any of the authors of this Alert or the Arent Fox professional that usually handles your matters.

Sec. 301 – Tariff List 2

The USTR has also recommended adding 284 product lines to the Section 301 tariffs which cover approximately $16 billion Chinese imports. This list will now undergo further review through a public notice and comment process, which will include another hearing. After the completion of this process, USTR will issue final determination on the products listed on Tariff List 2 that will be subject to additional duties.

Product Exclusion Request Process

The USTR has indicated that it will provide an opportunity for US companies to request the exclusion of particular products from the Section 301 tariffs. The details regarding this process have not yet been released, but the USTR press release notes that a Federal Register notice with additional details will be published “within the next few weeks.”

Importers should be aware that additional tariffs imposed under Section 232 and 301 are included in the calculation for continuous bond sufficiency limits. As a result, companies paying Section 232 and 301 tariffs may be getting notices from Customs and Border Protection in the next few months requiring importers to raise the amount/coverage on their customs bond.