China: US Tariff Exclusion Process For Chinese Imports

Last Updated: 17 July 2019
Article by Zoey Ye Zhang

Both US and China have imposed additional tariffs on each other's imports in the course of their ongoing trade war. However, both countries have put in place a tariff exclusion process to exclude certain products from additional tariffs.

In this article, China Briefing explains the US tariff exclusion process. (See here for our article explaining China's tariff exclusion process.)

On June 19, the Office of the US Trade Representative (USTR) announced a process by which US interested parties could request the exclusion of certain Chinese products – subject to additional tariffs – as per the September 2018 list (List 3).

This action imposed tariffs on US$200 billion worth of Chinese products.

Tariffs on these products have been in effect from September 24, 2018 and were raised from 10 percent to 25 percent – starting May 10, 2019.

The electronic portal for the submission of exclusion requests for products covered by the September 2018 list will open on June 30, 2019.

Applicants must submit their requests on this website: https://exclusions.ustr.gov.

Background: Five rounds of product exclusion have been granted

Prior to this, similar processes had been launched for 818 products covered by the US$34 billion list (List 1) and 284 products covered by the US$16 billion list (List 2). The submission of exclusion requests for these two lists were closed on October 9, 2018 and December 18, 2018, respectively.

Until now, five rounds of product exclusion affecting items in the US$34 billion list have been granted. The list, shown below, is published on the USTR website.

  • December 28, 2018 – the first batch of granted exclusions (83 FR 67463);
  • March 25, 2019 – the second batch of granted exclusions (84 FR 11152);
  • April 18, 2019 – the third batch of granted exclusions (84 FR 16310);
  • May 14, 2019 – the fourth batch of granted exclusions (84 FR 21389); and
  • June 4, 2019 – the fifth batch of granted exclusions (84 FR 25895).

The period of exclusion will be valid for one year after the date of approval, which can be understood as the release date of the exclusion list as published in the Federal Register.

Application process for tariffs covering US$200 billion of Chinese imports

The web portal for submitting exclusion requests opened at noon (EDT) on June 30, 2019 and the submission deadline is September 30, 2019.

Businesses can refer to the Federal Register (84 FR 29576) published by the USTR on June 24 to learn the procedures to request the exclusion of products and download the exclusion request form.

Interested persons seeking to exclude two or more products must submit a separate request for each product, that is one product per request.

Who can apply for tariff exclusion?

Interested persons in the US, including third parties (such as law firms, trade associations, and customs brokers) can submit requests for exclusion from additional duties.

Which products are eligible for tariff exclusion?

The products classified within the Harmonized Tariff Schedule of the United States (HTSUS) subheadings in Annex A of the notice published at 83 FR 47974 (the Federal Register published on September 21, 2018) as amended and modified by 83 FR 49153 (the Federal Register published on September 28, 2018).

Major considerations by the US government

  • Whether the particular product is available only from China, and whether the company made any efforts to source the product from non-Chinese suppliers.
  • Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requester or other US interests.
  • Whether the particular product is strategically important or related to ''Made in China 2025'' or other Chinese industrial programs.

In addressing each factor, the requester should provide support for their assertions.

Where and how to apply?

To submit an exclusion request, applicants must first register on the USTR portal at http://exclusions.USTR.gov.

After registration, the applicant can fill out and submit one or more exclusion request forms.

The three major steps during the process include:

  • The applicant fills out the Exclusion Request Form and submits requests in the period between the opening of the portal on June 30, 2019 and the September 30 deadline;
  • Other interested parties fill out the Exclusion Response Form to respond to those requests indicating their support or opposition and providing reasons for their respective views – within 14 days after the requests are posted online; and
  • The applicant fills out the Exclusion Reply Form to reply to a response within seven days after the close of the 14-day response period, or seven days after the posting of a response.

Three forms must be submitted using the same USTR online portal: http://exclusions.USTR.gov. The exclusion response/reply form can be accessed here.

Information and documents that will need to be prepared include:

  • Requester information;
  • 10-digit HTSUS item number of the product of concern;
  • A complete and detailed description of the particular product;
  • Requestor's relationship to the product;
  • Product substitutability in the US;
  • Product substitutability in the third country;
  • Requester's attempts to source this product from the US or other third countries;
  • The value in US dollars and quantity (with units) of the Chinese-origin product of concern that was purchased in 2017, 2018, and the first quarter of 2019;
  • The value in US dollars and quantity (with units) of the product of concern that was purchased from any third-country source in 2017, 2018, and the first quarter of 2019;
  • The value in US dollars and quantity (with units) of the product of concern that was purchased from US sources in 2017, 2018, and the first quarter of 2019;
  • Information regarding the company's gross revenue in US dollars for 2018, the first quarter of 2018, and the first quarter of 2019;
  • If the Chinese-origin product of concern is sold as a final product or as an input used in the production of a final product;
  • Whether the imposition of additional duties (since September 2018) on the product has resulted in severe economic harm to the company or other US interests;
  • Whether the requester has submitted exclusion requests for the Section 301 – US$34 billion and/or US$16 billion – tariff actions;
  • Whether the particular product is strategically important or related to " Made in China 2025" or other Chinese industrial programs;
  • Any additional supporting information; and
  • Any additional supporting attachments.

Period for an approved exclusion

Any exclusion of the product(s) if granted will be valid for one year after the notice of the exclusion as published in the Federal Register.

Compared with China's exclusion process, the US tariff exclusion process additionally involves seeking opinions from other relevant interested parties.

USTR also requires a more detailed description of the particular product, including its physical characteristics, function, application, principal use, and any other unique physical features that distinguish it from other products.

USTR will evaluate each request on a "case-by-case basis," taking into account whether the exclusion would undermine the objective of the Section 301 investigation, and whether the request defines the product with "sufficient precision."

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions