Recently, in connection with the quickly and significantly escalating trade war between the United States and China relating to Chinese technology transfer and intellectual property practices found by the Trump Administration in a Section 301 investigation to be unfair to U.S. companies (the “China 301 Investigation”), the U.S. Trade Representative (“USTR”) has: (1) promulgated the final second list of Chinese products that soon will be subject to a special tariff of 25 percent when imported into the U.S. (the “Final Second China 301 List”); and (2) announced a modified schedule for the consideration of the proposed third list of Chinese products that may be subject to special tariffs pursuant to the China 301 Investigation (the “Proposed Third China 301 List”). As discussed below, the special tariff on items on the Final Second China 301 List will take effect on goods imported on or after August 23, 2018, and the comment period relating to the Proposed Third China 301 List will now span from August 13 – September 6, 2018.
The Final Second China 301 List, which was released by the USTR on August 6, 2018, can be accessed HERE. Estimated to account for approximately $16 billion worth of imports from China, the Final Second China 301 List includes items covered under 279 tariff subheadings set forth under the Harmonized Tariff Schedule of the United States (“HTSUS”) and relates to a wide range of chemicals, machinery, and industrial items. Imports of products covered by the Final Second China 301 List will be subject to a special 25 percent tariff – in addition to other applicable tariffs (including ordinary duties and, in some instances, antidumping and countervailing duties) – effective August 23, 2018. As in the case of the first round of Chinese products upon which the USTR imposed a special tariff of 25 percent (the “Final First China 301 List”), which is estimated to account for $34 billion worth of goods imported from China on or after July 6, 2018, the USTR is expected to announce in the near future a process by which interested persons may request the exclusion of particular products covered by HTSUS subheadings appearing in the Final Second China 301 List. Exclusion requests related to products covered under the Final First China 301 List must be filed with the USTR by October 9, and we expect that the USTR will establish a due date soon thereafter for exclusion requests related to the Final Second China 301 List.
In addition, on August 7, 2018, the USTR published a notice in the Federal Register in which it announced that President Trump has directed the USTR to consider whether the special tariff to be imposed on the Proposed Third China 301 List, which would cover approximately $200 billion in imports from China, should be 25 percent instead of 10 percent, and that the USTR was modifying the comment period relating to the Proposed Third China 301 List in light of this development (the “August 7 FR Notice”). The August 7 FR Notice can be found HERE, and the Proposed Third China 301 List can be found HERE.
Under the modified schedule, the USTR plans to hold a hearing at the U.S. International Trade Commission in Washington, DC that would commence on August 20 and could continue through August 23 (the “Hearing”), depending on the number of Hearing participation requests that are received by the USTR by August 13. Significantly, the deadline for filing written comments with the USTR by parties not participating in the Hearing is September 6, 2018.
The International Trade team at FisherBroyles has extensive experience in representing and advising clients on tariff matters, and we are currently helping clients address issues arising from the China 301 Investigation. We can assist your company by reviewing your line of products in an effort to help mitigate the impact of the China 301 Tariffs, by preparing comments and/or providing testimony as to why certain products on the Proposed Third China 301 List should not appear on the Final Third China 301 List, and by filing exclusion requests with respect to products that make it onto any of the final lists. If you have any questions regarding the China 301 Tariffs or would like to discuss possible strategies relating to them, please contact any of the following FisherBroyles partners.
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