Trade negotiations with China have been ongoing for the past several months, but no agreement has been reached. On May 9, 2019, the United States Trade Representative (USTR) released a Federal Register Notice (“FR Notice”) confirming that the $200 billion lists of goods (“List 3”) would be increased from 10% to 25% as of May 10, 2019, at 12:01 A.M. (84 FR 20459). The USTR pointed to China “retreating from specific commitments” and a “lack of progress” as primary reasons for increasing the tariffs.
In order for goods to be subject to the increase, they must have been both exported to the U.S. and entered for consumption prior to May 10th. After some confusion, CBP provided additional guidance on when the increase would occur. Specifically, it indicated that for goods entered on or after May 10th, but exported from China before that date, importers can pay the 25% tariff and file a post-summary correction (PSC), or wait the standard ten-day entry summary filing period until such guidance is issued.
Although the increase will cause major ramifications for U.S businesses, there will be a process implemented which provides companies with a possibility of having their products excluded from the increased tariff. The FR Notice indicates that the USTR will “establish a process by which interested persons may request that particular product. . . be excluded from the additional duties.” Instructions will be released in a separate notice, likely sometime towards the end of May.
Assuming the instructions are similar to List 1 and List 2, the USTR will be looking for companies to show:
(1) the product is only available in China;
(2) the imposition of these additional duties would cause severe economic harm to the requestor or other U.S. interests; and
(3) the product is strategically important or related to the “Made in China 2025” policy.
Also, on May 9, 2019, the USTR released its fourth Notice of Product Exclusions. To date, Braumiller Law Group has filed over 200 successful exclusion requests for its clients (100+ more are pending in stage 3). Do not miss out on this opportunity to take advantage of the List 3 exclusion process as it could save your company a significant amount of money in the future.
For any additional inquiries on the exclusion process, please contact Adrienne Braumiller at [email protected].
More to come………….stay tuned, stay focused, and above all, stay compliant.
