China is considering a product exclusion process for the retaliatory tariffs it imposed on certain US-origin goods in response to the recent US Section 301 tariffs. The product exclusion process under development aims to show that China intends to use a public and transparent process to make decisions on which tariff items and/or products should be excluded from the retaliatory tariffs.

Limited details are available at this point. The Ministry of Finance and certain industry organizations or "chambers" might play important roles in the exclusion process. Parties eligible to submit an exclusion request may be limited to Chinese interested parties. The exclusion is likely to be granted on a product-specific basis, with due consideration given to whether the related 8-digit code is generally proper for exclusion. Whether there exists an adequate substitute for the US product could be a consideration. These details are subject to change until an official announcement is made, which may happen soon.

Originally published 30 August 2018

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