BACKGROUND:
In accordance with the advice of the Section 301 Committee, the USTR determined under section 302(b) of the Trade Act of 1974, as amended (19 U.S.C. 2412(b)), that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301. See 83 Federal Register (FR) 14906 (April 6, 2018).
At the direction of the President, the USTR determined to take actions resulting in the imposition of an additional 25 percent duty on products of China with an annual trade value of approximately $250 billion. The additional duties were imposed in three tranches. Tranche 1 covered 818 tariff subheadings, with an approximate annual trade value of $34 billion. See 83 FR 28710 (June 20, 2018). Tranche 2 covered 279 tariff subheadings, with an approximate annual trade value of $16 billion. See 83 FR 40823 (August 16, 2018). Tranche 3 covered 5,745 tariff subheadings, with an approximate annual trade value of $200 billion. See 83 FR 47974 (September 21, 2018); 83 FR 49153 (September 28, 2018); and 84 FR 20459 (May 9, 2019).
On August 20, 2019, the USTR published a Modification of Section 301 Action in 84 FR 43304 introducing another imposition of additional tariffs on products of China with an annual trade value of approximately $300 billion which is referred to as Tranche 4. The tariff subheadings subject to additional duties under Tranche 4 are separated into two lists with different effective dates – Annex A contains the formal Harmonized Tariff Schedule of the United States (HTSUS) language for list 1 and Annex B contains an informal description of the products in list 1. Annex C contains the formal HTSUS language for list 2 and Annex D contains an informal description of the products in list 2.
List 1 includes tariff subheadings where China’s share of U.S. imports from the world is less than 75 percent for each subheading. For list 1, the additional duty of 10 percent ad valorem is effective September 1, 2019.
List 2 includes products where China’s share of U.S. imports from the world is 75 percent or greater for each subheading. To provide a longer adjustment period for U.S. interested persons, the additional duty of 10 percent ad valorem for list 2 is delayed until December 15, 2019. 84 FR 43304, including all annexes, is attached for ease of reference.
GUIDANCE:
Products Covered by Annex A (Described in Annex B)
The additional import duties for Chinese goods covered by Annex A, published in the August 20, 2019 list of products subject to the Section 301 action, are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM eastern daylight time on September 1, 2019. Any article classified in a subheading covered by Annex A that is a product of China is subject to a 10% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading. Therefore, in addition to regular chapter reporting requirements, report the following HTS number and duty rate.
HTS Duty Rate
9903.88.15 10 percent
Products Covered by Annex C (Described in Annex D)
The additional import duties for Chinese goods covered by Annex C, published in the August 20, 2019 list of products subject to the Section 301 action, are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM eastern daylight time on December 15, 2019. Any article classified in a subheading covered by Annex C that is a product of China is subject to a 10% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading. Therefore, in addition to regular chapter reporting requirements, report the following HTS number and duty rate.
HTS Duty Rate
9903.88.16 10 percent
Reminder of Chinese Products Covered by the June 20, 2018, August 16, 2018, and September 21, 2018 Lists subject to Section 301 Action
The instructions for goods covered by the June 20, 2018, August 16, 2018, and September 21, 2018 lists remain unchanged.
- The
additional 25% import duties for Chinese goods covered
by the June 20, 2018 list were effective with respect
to goods entered, or withdrawn from warehouse for consumption,
on or after 12:01 AM eastern daylight time on July 6, 2018.
- In addition
to reporting the Chapters 1-97 HTSUS classification of the
imported merchandise, importers shall also report the
9903.88.01 special tariff number for goods subject to the
additional duty assessment of 25% ad valorem as a result of
the Section 301 trade remedy.
- The
additional 25% import duties for Chinese goods covered
by the August 16, 2018 list were effective with respect
to goods entered, or withdrawn from warehouse for consumption,
on or after 12:01 AM eastern daylight time on August 23, 2018.
- In addition
to reporting the Chapter 1-97 HTSUS classification of the
imported merchandise, importers shall also report the
9903.88.02 special tariff number for goods subject to the
additional duty assessment of 25% ad valorem as a result of
the Section 301 trade remedy.
- The
additional 10% import duties for Chinese goods covered
by the September 21, 2018 list were effective with
respect to goods entered, or withdrawn from warehouse for
consumption, on or after 12:01 AM eastern daylight time on
September 24, 2018.
- The
additional 25% import duties for Chinese goods covered
by the September 21, 2018 list were effective with
respect to goods entered, or withdrawn from warehouse for
consumption, on or after 12:01 AM eastern daylight time on May
10, 2019.
- In addition
to reporting the Chapter 1-97 HTSUS classification of the
imported merchandise, importers shall also report either
9903.88.03 or 903.88.04 special tariff number for goods
subject to the additional duty assessment of 10% or 25% ad
valorem as a result of the Section 301 trade remedy.
Additional Federal Register Notices adjusting for duty
increase and “On the Water Provisions” See 83 FR 47974, 84 FR
20459, 84 FR 21892, and 84 FR 26930.
All Products Covered by Section 301 Duties
The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.
CHAPTER 98
The additional duties imposed by headings 9903.88.01 through 9903.88.04, 9903.88.09, 9903.88.15 and 9903.88.16 do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under headings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80. For headings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed abroad, as described in the applicable heading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80.
CHAPTER 98 FILING INSTRUCTIONS
When submitting an entry in which a heading or subheading in Chapter 98 is claimed on merchandise covered by the Section 301 remedy, the following instructions will apply.
- When
submitting an entry using a Chapter 98 provision that normally
requires the reporting of a secondary Chapter 1-97 HTSUS
classification, a filer must first report subheading
9903.88.01, 9903.88.02, 9903.88.03, 9903.88.04, 9903.88.09,
9903.88.15 or 9903.88.16 as applicable, followed by the
applicable Chapter 98 subheading, and the Chapter 1-97 HTSUS
classification for the commodity being imported.
- When
submitting an entry using a Chapter 98 provision that does not
normally require the reporting of a secondary Chapter 1-97
HTSUS classification, neither 9903.88.01, 9903.88.02,
9903.88.03, 9903.88.04, 9903.88.09, 9903.88.15, 9903.88.16 nor
the Chapter 1-97 HTSUS should be reported.
- When
submitting an entry for a Temporary Importation under Bond
(TIB), a filer must first report the applicable subheading in
Chapter 98 (i.e., in heading 9813), followed by subheading
9903.88.01, 9903.88.02, 9903.88.03, 9903.88.04, 9903.88.09,
9903.88.15, 9903.88.16, and the Chapter 1-97 HTSUS for the
commodity being imported.
TRADE PREFERENCE PROGRAMS AND TEMPORARY REDUCTIONS IN RATES OF DUTY
Products of China that are covered by the Section 301 remedy and that are eligible for special tariff treatment under general note 3(c)(i) to the tariff schedule, or that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99, shall be subject to the additional duty imposed by headings 9903.88.01, 9903.88.02, 9903.88.03, 9903.88.04, 9903.88.09, 9903.88.15, and 9903.88.16.
FOREIGN TRADE ZONES
Any product listed in Annex A, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and that is admitted into a U.S. foreign trade zone on or after 12:01 am eastern daylight time on September 1, 2019, only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
Any product listed in Annex C, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and that is admitted into a U.S. foreign trade zone on or after 12:01 am eastern daylight time on December 15, 2019, only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
DRAWBACK
Section 301 duties are eligible for duty drawback.
PRODUCT EXCLUSIONS
The USTR will establish a process by which interested persons may request that particular products classified within an HTSUS subheading covered by Annex A and Annex C may be excluded from the additional duties. USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request. CBP will also provide additional guidance on the matter as it becomes available.
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