Effective May 10, 2019 importations of merchandise covered under the Section 301 third tranche, manufactured in China and entered into the U.S., are subject to the increase in additional duties from 10 to 25%. However, according to U.S. Customs and Border Protection updated guidance, the increased duties of 25% will not apply to goods a) exported from China prior to May 10th and b) entered into the U.S. prior to June 1, 2019. Note that both requirements must be present to secure the earlier additional duty rate of 10%.
All merchandise entered after June 1st will be subject to the 25% rate.
The U.S. Trade Representative also issued a Notice modifying the implementing instructions regarding merchandise in foreign trade zones. According to the May 10th Notice, merchandise subject to the Section 301 third tranche and admitted into a foreign trade zone in “privileged foreign” status will retain that status and will be subject, at the time of entry for consumption (i.e. entered into the commerce of the U.S.) to the additional duty rate that was in effect at the time of FTZ admission of the goods. Therefore, merchandise entered into a foreign trade zone as privileged foreign status prior to May 10th will be locked into the 10% rate.