On October 15, 2024, the Office of the United States Trade Representative (USTR) announced that it is opening a process for interested persons to request that certain machinery be temporarily excluded from Section 301 duties in the Investigation of China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.
301 Investigation Background
In August 2017, USTR initiated an investigation into China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The agency released a report of its findings in March 2018 and in June 2018 began imposing additional duties on products of China in four tranches.
Under the Trade Act of 1974, the USTR is required to conduct a four-year review if they receive an appropriate request to continue an action taken under Section 301. The agency is required to review:
- (A) the effectiveness in achieving the objectives of section 301 of (i) such action, and (ii) other actions that could be taken (including actions against other products or services), and
- (B) the effects of such actions on the United States economy, including consumers.
In accordance with this requirement, USTR announced in May 2022 that it was commencing this review and opened a docket for interested persons to submit comments.
The agency received nearly 1,500 comments. Throughout 2023 and early 2024, USTR and the Section 301 Committee (a USTR-led, interagency Trade Policy Staff Committee) held numerous meetings with agency experts to consider the comments received.
In May 2024, USTR issued a formal proposal in the Federal Register to increase tariffs on specific products in strategic sectors. The agency considered more than 1,100 public comments.
On September 18, 2024, the U.S. Trade Representative announced certain modifications to the actions taken in the Section 301 investigation including a list of subheadings eligible for consideration of temporary exclusion under an exclusion process for certain machinery used in domestic manufacturing.
Machinery Exclusions
This announcement sets forth the process to request exclusions for certain machinery used in domestic manufacturing. The exclusion process covers particular machinery used in domestic manufacturing classified within a subheading under chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (HTSUS). A list of eligible subheadings is available here.
The docket for submitting exclusions opened on October 15, 2024. The deadline for submitting exclusion requests is March 31, 2025.
Each request must identify a particular product, and provide supporting data and the rationale for the exclusion. USTR will evaluate each request on a case-by-case basis. USTR will accept exclusion requests on a rolling basis and will periodically announce decisions on pending requests.
What Importers Should Do
Importers can make their voices heard by filing an exclusion request with USTR. Diaz Trade Law can help prepare filings and assist importers in understanding how these exclusions may impact their business.
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.
