United States: USTR Releases Additional List of Chinese Products Potentially Subject to Section 301 Duties; Sets Out Product Exclusion Process

On July 10, the Office of the United States Trade Representative (USTR) released a list of Chinese products that may become subject to an additional duty of 10% ad valorem, pursuant to Section 301 of the Trade Act of 1974. The proposed product list covers a broad array of products with an annual trade value of approximately $200 billion, ranging from frozen meats to beauty products, chemicals, textiles, minerals and furniture, among others. It is the latest step in the ongoing USTR investigation into the Chinese technology transfer, intellectual property and innovation-related laws, policies and practices that USTR determined in its Section 301 report to be "unreasonable or discriminatory" and that "burden or restrict U.S. commerce."

The announcement came just three weeks after USTR stated that it would subject a first set of Chinese products—covering 818 tariff lines of approximately $34 billion in annual imports—to an additional duty of 25%, effective July 6, 2018, and published a second set of proposed Chinese products—also subject to an additional 25% duty, and covering an additional 284 tariff lines of $16 billion in annual trade—that is currently subject to a public notice and comment process.

China responded to the initial set of US duties by imposing increased duties on an equivalent volume of exports of the United States. USTR cited China's action in its latest announcement, asserting that it was responding to "China's decision to respond to the [Section 301] investigation by imposing duties on U.S. goods," rather than "addressing U.S. concerns with the unfair practices found in the investigation."

As with the prior two product lists, USTR will subject this third list to a public notice and comment process, including a hearing, before determining which of the proposed products will be subjected to the additional 10% duty. The applicable dates for the notice and comment process are as follows:

  • July 27 – Deadline to request to appear at the hearing and provide a summary of testimony
  • August 17 – Comments due
  • August 20 – Hearing
  • August 30 – Post-hearing rebuttal comments

As WilmerHale has previously reported, China has responded to the previous Section 301 duties by imposing similar duties on an equivalent amount of US exports. That will not be possible here, as the amount of potentially impacted Chinese trade exceeds annual US exports to China. Consequently, it is possible that China will look for other means to pressure US interests, including obstruction of pending transactions, Customs clearance rejections or delays, licensing and administrative delays or denials, and various other measures, in addition to tariff actions.

Establishment of Product Exclusion Process for First Set of Chinese Products

In addition to the July 10 announcement, USTR has also published a Federal Register notice setting out procedures for companies wishing to seek product-specific exclusions from the initial $34 billion product list that took effect on July 6. Key procedural details include the following:

General Information

  • Interested parties have until October 9, 2018, to file exclusion requests.
  • Interested persons, including trade associations, may submit exclusion requests. This is a departure from the approach that the US Department of Commerce took in the product exclusion process for the "Section 232" tariffs on imports of steel and aluminum, which had attracted significant criticism.
  • An exclusion will apply to a particular product classified within one of the relevant US Harmonized Tariff Schedule (HTSUS) subheadings. Interested persons seeking to exclude two or more products must submit a separate request for each product (i.e., one product per request).
  • An exclusion will be effective starting from July 6, 2018 (the effective date of the additional duties), and will extend for one year after the publication of the exclusion determination in the Federal Register. In other words, an exclusion, if granted, will apply retroactively to the July 6 date of the imposition of the additional duties.
  • USTR will periodically announce decisions on pending requests.

Specific Information on Exclusion Requests

  • With regard to product identification, any request for exclusion must include the following information:
    • Identification of the particular product in terms of the physical characteristics (e.g., dimensions, material composition or other characteristics) that distinguish it from other products within the covered eight-digit subheading. USTR will not consider requests that identify the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual use or chief use, or trademarks or tradenames.
    • The 10-digit subheading of the HTSUS applicable to the particular product requested for exclusion.
  • Requesters may also submit information on the ability of US Customs and Border Protection to administer the exclusion.
  • Requesters must provide the annual quantity and value of the Chinese-origin product that the requester purchased in each of the past three years (trade associations may provide aggregated data for their members).
  • With regard to the rationale for the requested exclusion, each request for exclusion should address the following factors:

    • Whether the particular product is available only from China. The notice instructs requesters to address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
    • Whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other US interests.
    • Whether the particular product is strategically important or related to "Made in China 2025" or other Chinese industrial programs.
    • Requesters may also provide any other information or data that they consider relevant to an evaluation of the request.
  • After a request for exclusion of a particular product is posted on www.regulations.gov, interested persons will have 14 days to respond to the request, indicating support or opposition and providing reasons for their view.
  • After a response is posted on regulations.gov, interested persons will have seven days to reply to the response.
  • All submissions must include a statement that the submitter certifies that the information provided is complete and correct to the best of his or her knowledge.
  • USTR has prepared a request form for use in submitting requests. USTR strongly encourages interested persons to use the form, though use of the form is not required.

WilmerHale continues to monitor these developments closely.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions