Since the inception of the Trade War with China, the Office of the United States’ Trade Representative (USTR) has provided citizens, primarily those in industries directly affected by the imposition of ad valorem duties (tariffs), the opportunity to request that certain products be granted exclusions. Each list of tariffs has its own specific process to ensure that concerned citizens may voice their opinions as to why given products should not be subjected to additional duties upon importation, as prescribed in the Section 301 investigation.
Many exclusions relating to the same item (HTS) are submitted on behalf of different parties. We highly encourage industry to work together in requesting exclusions (this is a great benefit of industry associations – as long as your HTS is one they are fighting for). Once a specific HTS is granted the exclusion, all products within that same HTS, regardless of who submitted the request, are granted the exclusion benefits. This means competitors are able to work together to alleviate the impact of the trade war on their industry as the request for an exclusion is HTS specific, not product-specific.
While the USTR has denied the majority of exclusion requests submitted, many of these denials are based on technicalities. To avoid redundant exclusion requests the USTR constantly provides the public with spreadsheets detailing every submitted request, per tariff list, as well as the status of each listed HTS.
USTR’s website not only provides general information regarding the Section 301 Investigation but also breaks down each individual list, as well as the product description relating to each exclusion. Here is an outline where these sources are available and what each provides:
- List 1–
- The first list of items, which became effective on July 6, 2018, levied a 25% ad valorem on 800 HTS’s, worth approximately $34 Billion.
- Since the exclusion process opened in July 2018, USTR granted exclusions to “110 specially prepared product descriptions, which cover 362 separate exclusion requests”.
- List 2–
- The second list, which became effective on August 23, 2018, also levied a 25% ad valorem on 279 HTS’s, totaling an estimated $16 Billion.
- Since this exclusion opened up in September of 2018, USTR has officially granted exclusions to “69 specially prepared product descriptions, which cover 292 separate exclusion requests”.
- List 3–
- The third list, which became effective September 17, 2018, initially imposed a 10% ad valorem on 5700 HTS’s, totaling roughly $200 Billion. Then on May 10, 2019, the ad valorem increased to 25%.
- The exclusion process for list 3 only opened up on June 30, 2019, and will remain open until September 30, 2019, so be sure to submit your request ASAP!
- USTR has already granted exclusions to “10 specially prepared product descriptions, which cover 15 separate exclusion requests”.
- List 4
- The fourth list is technically a proposed list covering 3,805 HTS’s. While the initial proposal set out 25% ad valorem on $300 billion worth of goods, President Trump announced that when imposed, the ad valorem will start at 10% and will potentially increase. However, there has yet to be any official federal register notice detailing the specifics of the tariffs or the comment and exclusion processes. Once this information is available, Diaz Trade Law will make it available to you!
- Section 232:
- The tariffs relating to steel and aluminum products (section 232) are enforced and managed under a different executive agency than those covered in the Section 301 tariffs.
- As opposed to USTR handling the matters, Section 232 enforcement falls on the Department of Commerce’s Bureau of Industry and Security.
- Similar to Section 301 tariffs, importers subjected to additional importation duties under 232 have the ability to request exclusion from the list.
- All submitted requests and their status are detailed and are available for inspection on the Section 232 Steel and Aluminum exclusion request portal. However, despite being imposed earlier than any of the section 301 lists, DOC has granted less than 20 exclusions.
DTL helps clients strategize on how to identify the strongest arguments to persuade the government to grant exclusion requests. USTR has already published tens of thousands of responses either granting or denying previous exclusion requests for products included in lists 1,2 and 3. For background information on China Tariffs and numerous ways to mitigate the effect of the China tariffs, check out our previous blogs. Diaz Trade Law has assisted clients in assessing their best options to prepare for, or mitigate the China tariffs and has submitted both comments and exclusions. Our Customs and International Law attorneys are available at 305-456-3830 or firstname.lastname@example.org.