On Monday, March 25, the Office of the United States Trade Representative (USTR) granted a second set of exclusions to the first list of Chinese goods subject to a 25% ad valorem duty (84 FR 11152). As part of the Section 301 action on China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation, USTR released the first list of products (Tranche 1) subject to this additional duty on June 20, 2018, totaling $34 billion in Chinese imports. The duty went into effect on July 6, 2018, and the granted exclusions will be applied as of that date and extend for one year after the March 25th publication date.
USTR is reviewing requests on a rolling basis and published the first set of granted exclusions on December 28, 2018 (83 FR 67463). USTR has not issued a publication date for a third round of granted exclusions, however, it will likely be several months before all determinations are made.
Currently, 1,004 exclusion requests have been granted, 5,312 have been denied, and the remaining 4,520 are still under consideration. An exclusion request status report is available on the USTR Section 301 navigation site and is updated on a weekly basis. Requestors should carefully monitor USTR’s updates to determine the status of their exclusion request. If a request is denied, USTR advises there is still a possibility that the product could qualify for an exclusion if a later filed request covering the same 10-digit HTS provision is granted. That said, there are a number of instances where USTR granted a specific request and created a new HTS carve-out limited to the scope of products described in the granted request, and denied all other petitions at the 10-digit level. In such cases, only products meeting the description set forth in the new HTS provision would qualify for the exclusion.
USTR initiated a similar exclusion process for Tranche 2 ($16 billion) on September 18, 2018, which concluded on December 18, 2018. To date, the agency has issued no final determinations on exclusion requests filed for Tranche 2. USTR has not yet initiated an exclusion process for products covered by Tranche 3 ($200 billion), which are subject to a 10% ad valorem duty effective as of September 24, 2018.