On May 27, 2021, the Senate passed the ENDLESS FRONTIER ACT including a process for exclusion of articles from Section 301 duties.
TITLE III--IMPROVING TRANSPARENCY AND ADMINISTRATION OF TRADE PROGRAMS
AND OVERSIGHT AND ACCOUNTABILITY OF TRADE AGENCIES
SEC. 73001. PROCESS FOR EXCLUSION OF ARTICLES FROM DUTIES
UNDER SECTION 301 OF THE TRADE ACT OF 1974.
(a) Establishment of General Exclusion Process.--
(1) In general.--Title III of the Trade Act of 1974 (19
U.S.C. 2411 et seq.) is amended by inserting after section
305 the following:
``SEC. 305A. PROCESS FOR EXCLUSION OF ARTICLES FROM DUTIES.
``(a) Analysis of Alternative Action.--Subject to
subsection (d), before taking action under section 301(b),
the Trade Representative shall analyze the impact of the
action on United States entities, particularly small
entities, and consumers in the United States with a goal of
mitigating the impact of duties on United States entities and
consumers in the United States, including by evaluating
alternatives or modifications to particular actions.
``(b) Process for Exclusion From Duties.--
``(1) In general.--Subject to subsection (d), the Trade
Representative shall establish and maintain a process for
exclusion requests from duties under section 301(b) unless
the Trade Representative determines and certifies to the
appropriate congressional committees that maintaining an
exclusion process--
``(A) would impair the ability of the United States to
maintain effective pressure to remove unreasonable or
discriminatory practices burdening commerce in the United
States; or
``(B) is impractical due to the low value of the duties
imposed.
``(2) Briefing.--If the Trade Representative makes a
certification under paragraph (1), not later than 3 days
before making the certification, the Trade Representative
shall brief the appropriate congressional committees
regarding the reasons for the certification.
``(3) Continued certification.--If the Trade Representative
makes a certification under paragraph (1) with respect to
duties under section 301(b), not less frequently than once
every 180 days while those duties are in effect, the Trade
Representative shall determine and certify to the appropriate
congressional committees that the reasons for forgoing an
exclusion process with respect to those duties continue to be
present.
``(c) Implementation of Exclusion Process.--
``(1) In general.--In implementing an exclusion process
required under subsection (b)(1), the Trade Representative
shall consider whether and which criteria described in
paragraph (2), and such other criteria as the Trade
Representative considers appropriate under the circumstances,
are appropriate to apply in the exclusion process.
``(2) Criteria described.--The criteria described in this
paragraph for exclusion of articles from duties under section
301(b) include the following:
``(A) Whether the failure to grant the exclusion would
result in severe economic harm to the requester.
``(B) Whether the article or a reasonable substitute is not
commercially available to the requester.
``(C) Whether the imposition of the duty with respect to
the article would unreasonably increase consumer prices for
day-to-day items consumed by low- or middle-income families
in the United States.
``(D) Whether the imposition of the duty would have an
unreasonable impact on manufacturing output of the United
States.
``(E) Whether the imposition of the duty would have an
unreasonable impact on the ability of an entity to fulfill
contracts or to build critical infrastructure.
``(F) Whether the failure to grant the exclusion is likely
to result in a particular entity or entities having the
ability to abuse a dominant market position.
``(d) Exclusion of Certain Duties.--This section shall not
apply to duties imposed under section 301(b) pursuant to a
dispute resolution process under the World Trade
Organization.
``(e) Publication of Notice.--Subject to subsection (d),
not later than 90 days after imposing any duty under section
301(b), the Trade Representative, in consultation with such
other Federal agencies as the Trade Representative considers
appropriate, shall publish a notice in the Federal Register
regarding the criteria that the Trade Representative will
apply and the evidence it will evaluate in determining
whether a request for exclusion from such duty satisfies the
requirements of the exclusion process under subsection
(b)(1).
``(f) Definitions.--In this section:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means--
``(A) the Committee on Finance of the Senate; and
``(B) the Committee on Ways and Means of the House of
Representatives.
``(2) Severe economic harm.--The term `severe economic
harm', with respect to an exclusion from duties requested by
a United States entity, includes circumstances under which
failure to grant the exclusion would--
``(A) render the business of the entity unprofitable; or
``(B) result in a significant number or proportion of the
workers employed by the entity becoming totally separated
from employment.
``(3) Small entities.--The term `small entities' has the
meaning given the term `small entity' in section 601 of title
5, United States Code.
``(4) United states entity.--The term `United States
entity' means an entity organized under the laws of the
United States or of any jurisdiction within the United
States, including a foreign branch of such an entity.''.
(2) Clerical amendment.--The table of contents for the
Trade Act of 1974 is amended by inserting after the item
relating to section 305 the following:
``Sec. 305A. Process for exclusion of articles from duties.''.
(b) Establishment of Exclusion Process for Certain Duties
Relating to People's Republic of China.--
(1) In general.--Notwithstanding any other provision of
law, the United States Trade Representative shall establish a
process pursuant to which United States entities and
associations of those entities may request the exclusion of
articles from duties described in paragraph (2).
(2) Duties described.--The duties described in this
paragraph are duties imposed pursuant to the investigation
initiated under section 301 of the Trade Act of 1974 (19
U.S.C. 2411) on August 18, 2017, and with respect to which
notice was published in the Federal Register on August 24,
2017 (82 Fed. Reg. 40213).
(3) Implementation of exclusion process.--In implementing
the process established under paragraph (1) for exclusion of
articles from duties described in paragraph (2), if the
exclusion of the article can likely be administered by U.S.
Customs and Border Protection--
(A) the Trade Representative shall exclude that article
from the imposition of such a duty if the Trade
Representative determines, following a request from a United
States entity or an association of those entities, that the
failure to grant the exclusion would result in severe
economic harm to the requester;
(B) unless the Trade Representative determines that
granting the exclusion would impair the ability of the United
States to maintain effective pressure to remove an
unreasonable or discriminatory practice burdening United
States commerce, the Trade Representative shall exclude that
article from the imposition of such a duty if the Trade
Representative determines following a request from a United
States entity or an association of those entities that--
(i) the article or a reasonable substitute is not
commercially available to the requester;
(ii) the imposition of the duty with respect to the article
would unreasonably increase consumer prices for day-to-day
items consumed by low- or middle-income families in the
United States;
(iii) the imposition of the duty would have an unreasonable
impact on manufacturing output of the United States;
(iv) the imposition of the duty would have an unreasonable
impact on the ability of an entity to fulfill contracts or to
build critical infrastructure; or
(v) the failure to grant the exclusion is likely to result
in a particular entity or entities having the ability to
abuse a dominant market position; and
(C) the Trade Representative may identify other criteria
relevant to determining whether the article shall be excluded
from the imposition of such a duty.
(4) Timeframe of exclusion and renewal.--
(A) Period of exclusion.--An exclusion of an article
requested under paragraph (1) from duties described in
paragraph (2)--
(i) shall be for a period of 18 months; and
(ii) shall be decided--
(I) not later than 90 days before the duty is due to be
paid; or
(II) if the Trade Representative determines that the
request presents exceptionally complex issues or requires
additional evidence, not later than 120 days before the duty
is due to be paid.
(B) Renewal.--The Trade Representative shall allow
applications for renewal of an exclusion under paragraph (1)
to be submitted not later than 90 days before the exclusion
is set to expire.
(C) Failure to act.--If the Trade Representative fails to
decide an exclusion request under subparagraph (A)(ii) during
the appropriate period set forth under that subparagraph, the
exclusion request will be deemed to have been granted until
the date that is 30 days after the Trade Representative
publishes in the Federal Register a decision not to grant the
request.
(5) Written reasoning.--
(A) In general.--If the Trade Representative denies a
request for an exclusion under paragraph (1), the Trade
Representative shall provide to the requester of the
exclusion a reasoned determination for denying the request.
(B) Substantial evidence.--A determination under
subparagraph (A) shall be supported by substantial evidence
from the administrative record.
(6) Review.--
(A) In general.--Not later than 180 days after the date of
the enactment of this Act, and annually thereafter, the
Comptroller General of the United States shall conduct an
audit of the exclusion process established under paragraph (1).
(B) Elements of audit.--Each audit required by subparagraph (A) shall--
(i) include a review of the process for--
(I) receiving and reviewing exclusion requests under
paragraph (1);
(II) determining eligibility for an exclusion;
(III) applying relevant criteria for an exclusion; and
(IV) making determinations regarding whether to grant an
exclusion;
(ii) examine the information provided to applicants prior
to seeking an exclusion, as well as throughout the exclusion
application process; and
(iii) analyze the timeliness of decisions, the consistency
of decisions, and the internal review process for making
decisions with respect to an exclusion.
(7) Regulations.--
(A) Implementation of process.--Not later than 120 days
after the date of the enactment of this Act, The Trade
Representative, in consultation with such other Federal
agencies as the Trade Representative considers appropriate,
shall prescribe regulations regarding the criteria that the
Trade Representative will apply and the evidence the Trade
Representative will evaluate in deciding whether any of the
conditions in paragraph (3) have been satisfied with respect
to an exclusion request under paragraph (1).
(B) Severe economic harm.--The Trade Representative shall
prescribe regulations regarding the definition of severe
economic harm under paragraph (8), including by setting forth
the evidence necessary to establish that a business is
unprofitable, that workers will be separated, and other
circumstances in which severe economic harm may be
demonstrated.
(8) Definitions.--In this subsection:
(A) Severe economic harm.--The term ``severe economic
harm'', with respect to an exclusion from duties requested by
a United States entity or an association of those entities,
includes circumstances under which failure to grant the
exclusion would--
(i) render the business of the entity or entities
unprofitable; or
(ii) result in a significant number or proportion of the
workers employed by the entity or entities becoming totally
separated from employment.
(B) United states entity.--The term ``United States
entity'' means an entity organized under the laws of the
United States or of any jurisdiction within the United
States, including a foreign branch of such an entity.
(c) Treatment of Certain Exclusions Relating to People's
Republic of China.--
(1) Reauthorization of exclusions.--All covered duty
exclusions shall be reinstituted for entries filed on or
before December 31, 2022.
(2) Retroactive application for certain liquidations and
reliquidations.--
(A) In general.--Notwithstanding section 514 of the Tariff
Act of 1930 (19 U.S.C. 1514) or any other provision of law
and subject to subparagraph (B), any entry of a covered
article on which duties were paid under section 301(b) of the
Trade Act of 1974 (19 U.S.C. 2411(b)) and to which a covered
duty exclusion would have applied if the entry were made on
December 31, 2020, that was made--
(i) after December 31, 2020, and
(ii) before the date of the enactment of this Act,
shall be liquidated or reliquidated as though such entry
occurred on such date of enactment.
(B) Requests.--A liquidation or reliquidation may be made
under subparagraph (A) with respect to an entry of an article
only if a request therefor is filed with U.S. Customs and
Border Protection not later than 180 days after the date of
the enactment of this Act that contains sufficient
information to enable U.S. Customs and Border Protection--
(i) to identify and reconstruct the entry, if necessary; and
(ii) to verify that the article is a covered article.
(C) Payment of amounts owed.--Any amounts owed by the
United States pursuant to the liquidation or reliquidation of
an entry of a covered article under subparagraph (A) shall be
paid, without interest, not later than 90 days after the date
of the liquidation or reliquidation (as the case may be).
(3) Definitions.--In this subsection:
(A) Covered article.--The term ``covered article'' means an
article that qualifies for a covered duty exclusion from
duties paid under section 301(b) of the Trade Act of 1974 (19
U.S.C. 2411(b)) that was not granted by the United States
Trade Representative within 180 days of the date of
liquidation of an entry containing such an article.
(B) Covered duty exclusion.--The term ``covered duty
exclusion'' means a specific article exclusion that was--
(i) granted in the investigation initiated under section
301 of the Trade Act of 1974 (19 U.S.C. 2411) on August 18,
2017, and with respect to which notice was published in the
Federal Register on August 24, 2017 (82 Fed. Reg. 40213); and
(ii) published in the Federal Register.
(C) Entry.--The term ``entry'' includes a withdrawal from
warehouse for consumption.
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