Temporary Reprieve in Trade War: Section 301 Exclusions Extended—Again

On December 26, 2023, the Office of the United States Trade Representative (USTR) announced yet another extension to expiring Section 301 tariff exclusions. This is a reprieve for American importers as additional tariffs on hundreds of Chinese products are pushed back to May 31, 2024.

The government is also seeking public comments on specific exclusions, potentially paving the way for further adjustments. This move likely reflects ongoing trade tensions and domestic efforts to diversify sourcing away from China.

Background on China tariffs

The Section 301 China Tariffs were implemented in 2018 after a USTR investigation into China’s trade practices found certain Chinese policies and practices were unreasonable or discriminatory and burdened or restricted U.S. companies and workers.

In response to these findings, the United States imposed tariffs—adding 7.5% and 25% to certain products imported from China—amounting to an estimated $173 billion in assessed duties as of January 4, 2023. The tariffs apply to a broad range of products and have been imposed in four rounds, issued as “Lists” on approximately $550 billion of goods imported from China annually.

Section 301 duty exclusions introduced

The USTR implemented an exclusion process for the Section 301 tariffs in December 2018, which has provided businesses the chance to request an exclusion, and/or submit for duty recovery on exclusions that were already available. Several duty exclusions have since been issued.

Most recently, the USTR again extended the 352 previously reinstated exclusions and 77 COVID-related product exclusions until May 31, 2024, from the previous December 31, 2023 deadline. The exclusions cover various products from medical products like face masks and hand sanitizing wipes, to industrial pumps and electric motors.

The USTR is opening a docket for public comments on whether to further extend particular exclusions. The public comment period will be open from January 22, 2024, through February 21, 2024.

What to expect for China tariffs in the year ahead

Any major revisions to the China tariffs are unlikely to occur until the USTR completes the statutory four-year review. USTR ambassador, Katherine Tai, stated the USTR’s office would be taking a holistic look at the effect the tariffs have on the national economy, specifically U.S. customers, businesses, and production. The USTR wants to focus on analyzing the current structure of the tariffs, as well as any changes that should be explored.

Find a provider that can help you navigate changing tariff rules

The right provider will have experience navigating the changing regulations regarding these and other tariffs on imported goods. When determining what provider is right for you, be sure they can help with the following three areas.

1. Quickly find potential duty exclusions

To see if any exclusions may apply to your products, a quality provider will be able to deliver a comprehensive list of exclusions.

For example, C.H. Robinson offers an easy-to-understand report through our free U.S. Tariff Search Tool. You can also use the tool to see import costs and identify potential opportunities to reduce or eliminate duties and fees.

Labor is challenging to come by these days, and tools like this can save hours of research time, providing clarity in a complex environment. Watch how to get started with the U.S. tariff search tool in less than a minute.

2. Track Section 301 duty spend and potential savings over time

In addition to identifying potential exceptions you’re eligible for, your provider should be able to help you track the exclusions you’ve already claimed.

C.H. Robinson makes it easy for our customers to quickly and easily see these claimed exclusions with Navisphere® U.S. Customs Analytics. The tool shows both the invoice line and SKU-level so it’s easy to identify how much is owed in additional duty under the Section 301 China Tariffs, as well as other additional duties like the Section 232 steel/aluminum tariffs. Users can also determine how renewal or expiration of these exclusions will impact landed costs.

3. Obtain tariff classification and origin review assistance

Do you know how your goods are made—from raw materials to finished goods—by whom and where? Many companies are still adapting their supply chains and manufacturing processes when it comes to Section 301 tariffs. If you’re looking to move manufacturing and/or assembly processes in hopes of averting Section 301 tariffs, consider submitting a binding ruling to definitively confirm the last country where the substantial transformation of goods occurs.

Because verifying your harmonized tariff schedule of the United States (HTSUS) is an important step in the tariff exclusion process, you may need assistance reviewing, classifying, or obtaining a binding ruling for your products. Get in touch with our dedicated classification team to help determine the correct HTSUS classification for a product and if the classification results in fewer duties owed, if any.

Stay informed

Developments in customs and trade continue to evolve—stay informed to be prepared:

Joshua Avalos
Senior Business Analyst
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