USTR Announces Product Exclusion Process for China 301 Tranche #3

On June 30, 2019, at noon EDT: The web portal for submitting exclusion requests - http://exclusions.USTR.gov - will open.

September 30, 2019, is the deadline for submitting exclusion requests.

Responses to individual exclusion requests are due 14 days after the request is posted on USTR’s online portal. Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14-day response period, or 7 days after the posting of a response.

In a notice published on September 21, 2018 (83 FR 47974), the Trade Representative, at the direction of the President, announced a determination to modify the action being taken in the Section 301 investigation by imposing 10 percent additional duties on products of China with an annual trade value of approximately $200 billion. On September 28, 2018 (83 FR 65198), the Trade Representative issued a conforming amendment and modification of the September 21 action. The current notice refers to the September 21 action, as modified by September 28 notice, as the “September 2018 action.” In a notice published on May 9, 2019 (84 FR 20459), the Trade Representative, at the direction of the President, increased the rate of additional duty for the September 2018 action to 25 percent.

USTR invites interested persons, including trade associations, to submit requests for exclusion from the additional duties under the September 2018 action. USTR will evaluate each request on a case-by-case basis, taking into account the asserted rationale for the exclusion, whether the exclusion would undermine the objective of the Section 301 investigation, and whether the request defines the product with sufficient precision. Any exclusion will be effective starting from the September 24, 2018 effective date of the September 2018 action, and extending for one year after the publication of the exclusion determination in the Federal Register. USTR will periodically announce decisions on pending requests.

Set out below is a summary of the information to be entered on the exclusion request form.

Each requester has to provide contact information, including the full legal name of the organization making the request, whether the requester is a third party (law firm, trade association, or customs broker) submitting on behalf of an organization or industry, and the primary point of contact (requester and/or third party submitter). The requester may report whether the requester’s business satisfies the Small Business Administration’s size standard for a small business, which are identified by North American Industry Classification Systems Codes and are found in 13 CFR 121.201.

With regard to product identification, any request for exclusion must include the following information:

• The 10-digit subheading of the HTSUS applicable to the particular product requested for exclusion. If no 10-digit subheading is available (i.e. the 8-digit subheading does not contain breakouts at the 10-digit level), requesters should use the 8-digit subheading and add “00”. Different models classified under different 8-digit or 10-digit subheadings are considered different products and require separate exclusion requests.
• Product name and a detailed description of the product. A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.). Requesters may submit a range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.
• The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requesters may submit attachments that help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a requester’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the product using criteria that cannot be made available for public inspection. Requesters must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the requester purchased, in 2017, 2018, and the first quarter of 2019. Requesters must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019. For imports sold as final products, requesters must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product accounted for. For imports used in the production of final products, requesters must provide the percentage of the total cost of producing the final product(s) the Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for.

With regard to the rationale for the requested exclusion, each requester will be asked to address the following:

• Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries. The requester must provide an explanation if the product is not available outside of China or the requester is not sure of the product availability.
• Whether the requester has attempted to source the product from the United States or third countries.
• Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requester or other U.S. interests.
• Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs. In addressing each factor, the requester should provide support for their assertions. To provide information about the possible cumulative effects of the Section 301 tariff actions, requesters also may submit information about any exclusion requests submitted by the requester under the initial $34 billion tariff action (Docket ID: USTR2018-0025) or the additional $16 billion tariff action (Docket ID: USTR-2018-0032) and the value of the requester’s imports applicable to the previous tariff actions. Requesters also may provide any other information or data that they consider relevant to an evaluation of the request.