Recent Trade & Tariff Perspectives

November 10, 2021 | Kevin Koch  Senior Manager

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Section 301 (China) Duty Exclusions—the Opportunity Clock is Ticking

How well do you know your landed costs to import into the United States? Do you know which products are subject to additional duties, ranging from 7.5% to 25%? Do you know there are just under three weeks remaining to petition the United States Trade Representative (USTR) to extend tariff exclusions that were previously granted, but have since expired?

The time to act is now—since there may be money on the line for your business. Read more about these trade events and see how C.H. Robinson's new HTS Search Tool can help you gain clarity and potentially seize opportunities to reduce your landed costs.

Time is running out on the chance to request the USTR extend previous duty exclusions

The USTR said that the Biden Administration intends to conduct an in-depth review of China’s performance under the Phase One Agreement as part of its overarching vision to realign the United States’ trade policy. In addition, the USTR started a targeted tariff exclusion process and stated that they will keep open the potential for additional exclusion processes in the future.

Right now, there is a limited-scope, limited-time opportunity to potentially avoid some of these tariffs going forward, while also having the opportunity to recover duties previously paid on some of your imports during the last few months of this year.

The USTR comment period is open until December 1

The USTR is allowing the public to comment on whether to reinstate certain Section 301 China tariff product exclusions. As published within the Federal Register notice, the agency intends to evaluate 549 product exclusions—on a case-by-case basis—with the possibility of granting extensions. Most of these expired as of December 31, 2020. If reinstated, the exclusions would be retroactive for eligible entries on or after October 12, 2021.

The primary factors the USTR will focus on whether to reinstate the exclusions are similar to those of the previous administration, such as:

  • Whether the product and/or a comparable product is available from sources in the United States and/or in third countries
  • Any changes in the global supply chain since September 2018 with respect to the product or any other relevant industry developments
  • The efforts, if any, the importers, or U.S. purchasers have undertaken since September 2018 to source the product from the United States or third countries
  • Domestic capacity for producing the product in the United States

How might the U.S. Innovation and Competition Act (USICA) affect tariff exclusions?

The U.S. Innovation and Competition Act (USICA) was passed through the Senate on June 8, 2021, and has made its way to the House of Representatives. Notably, the USICA addresses Section 301 China duty exclusions. If the USICA is passed by the House, and subsequently signed by the President, it can largely impact the import trade community.

In particular, all previous duty exclusions would be reinstated from the date of passage of the legislation through December 2022. Moreover, according to the bill, the specific duty exclusions that expired on December 31, 2020, would be retroactively reinstated between January 1, 2021, and the date of passage.

Could my company become eligible for duty refunds and/or duty exclusions under the USICA?

Under USICA, there may be potential to collect refunds on duties you previously paid to U.S. Customs and Border Protection, and you could potentially benefit going forward from Section 301 duty exclusions.

Take advantage of these possible reinstated exclusions if and when the legislation becomes law. Please note, though, that duties would be refunded without interest.

How can C.H. Robinson help?

Understanding that there is still significant work to do on the path towards realigning the United States – China trade relationship, the key takeaway that the USTR shared recently is that the trade measures currently in effect (the additional 7.5% to 25% duties on Chinese products) do not appear to be going away anytime soon. In fact, the USTR said that it is the Administration’s objective to explore all options and means to continue enforcing a significant trade reform in its path forward.

There are approaches that your company can take to navigate the trade environment and better understand your true landed cost. For instance, be proactive in this seemingly ever-changing trade environment, by using C.H. Robinson’s HTS Search Tool to help gain clarity into your costs to import, while also identifying opportunities to potentially reduce or eliminate duties and fees through various trade preference or duty exclusion programs.

This new tool can help you understand the effect that either of these two trade policy events—extension of previously granted exclusions from the USTR and/or the USICA—may have on your business if they come to fruition.

In addition, C.H. Robinson’s team can assist you with reviewing your options to effectively navigate these events. Connect with one of our trade policy experts to learn more.

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