US Trade Representative seeks comments on possible reinstatements of previously extended exclusions to Section 301 tariffs
On October 5, 2021, the Office of the US Trade Representative (USTR) released a notice inviting public comments on whether to reinstate certain exclusions to Section 301 tariffs and the appropriate length of any reinstated exclusion (the USTR Notice). The USTR Notice can be found here. Concurrently, USTR released a list identifying the 549 previously extended exclusions that are subject to the USTR Notice. The list with the exclusions can be found here. Interested parties have the opportunity to submit by December 1, 2021, written comments either supporting or opposing the possible reinstatement of the relevant exclusions to Section 301 tariffs.
Following an investigation into Chinese acts, policies and practices of concern to the United States initiated in 2017, USTR imposed Section 301 tariffs on products originating from China under Section 301(b) of the Trade Act of 1974 in four separate tranches.
For each one of the tranches, USTR established processes for interested parties to apply for product-specific exclusions from the Section 301 tariffs. In the exclusion requests, interested parties were asked to address the following three factors: (i) whether the particular product was available only from China, or whether it was available from sources in the United States and/or in third countries; (ii) whether the imposition of additional duties on the particular product would cause severe economic harm to the requester or other US interests; and (iii) whether the particular product was strategically important or related to “Made in China 2025” or other Chinese industrial programs.
As a result of the exclusion requests, USTR granted exclusions for Chinese-origin products on each of the four tranches and thereafter extended 549 exclusions. However, the 549 exclusions all expired by April 18, 2021. Thus, all imports originating from China listed in the four tranches are currently subject to the Section 301 tariffs.
Possible reinstatement of the 549 extended exclusions to Section 301 tariffs
The USTR Notice sets forth the process for public comments on whether to reinstate the 549 extended exclusions listed here and the appropriate length of the reinstated exclusions. Interested parties will have until December 1, 2021 to present their views on the reinstatements at issue. The comments must be submitted electronically after completing a registration process detailed on USTR’s website. If USTR reinstates any exclusion, it will apply retroactively as of October 12, 2021 to entries that are unliquidated at the time an importer formally applies to US Customs and Border Protection for implementation of the reinstated exclusion.
USTR will evaluate requests for reinstatement on a case-by-case basis. In its analysis, USTR will focus on “whether, despite the imposition of additional duties beginning in September 2018, the particular product remains available only from China.” To this end, the USTR Notice requests that the comments address the following:
- whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries;
- any changes in the global supply chain since September 2018 with respect to the particular product or any other relevant industry developments;
- the efforts, if any, the importers or US purchasers have undertaken since September 2018 to source the product from the United States or third countries; and,
- the domestic capacity for producing the product in the United States.
In addition, USTR is asking commenters to provide information regarding (i) the annual quantities and values for the Chinese-origin product subject to the exclusion request sourced from China, the United States and other third countries that the commenters purchased over the last three years; (ii) the commenter’s gross revenue for the last three years, if applicable; (iii) whether Chinese suppliers have lowered their prices for the products subject to the exclusion as a result of the Section 301 tariffs; (iv) whether the Chinese origin product is sold as a final product or as an input; (v) whether the reinstatement in question would result in severe economic harm to the commenter or other US interests; and (vi) the number of employees the commenter’s company employs in the United States and whether the Section 301 tariffs had any impact on employment at the commenter’s company, among other information.
Commenters may also provide any other data or information that they consider relevant for USTR’s reinstatement evaluation.
Any party impacted by the Section 301 tariffs and/or the related 549 exclusions should consider submitting comments in support or opposition to any possible reinstatement. Moreover, importers of Chinese-origin products covered by the prior exclusions in question now have a new avenue to seek relief from Section 301 tariffs. As noted, all parties, including importers, can file written comments up to the deadline of December 1, 2021.
DLA Piper attorneys have extensive experience in assisting clients with preparing and submitting Section 301 exclusion requests and related comments. If you have any questions or would like to discuss your company’s situation, please contact any of the authors or your regular DLA Piper contacts.
 As of today, the October 5, 2021 notice has not been published on the Federal Register. See Request for Comments on the Possible Reinstatement of Certain Exclusions in the Section 301 Investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation (Oct. 5, 2021).
 See Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 28,710 (June 20, 2018) (“List 1 Notice”); Notice of Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 40,823 (August 16, 2018) (“List 2 Notice”); Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 47,974 (Sept. 21, 2018) (“List 3 Notice”); Notice of Modification of Section 301 Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 84 Fed. Reg. 43,304 (Aug. 20, 2019) (“Lists 4A and 4B”).
 See, eg, Procedures To Consider Requests for Exclusion of Particular Products From the Determination of Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 Fed. Reg. 32,181, 32,182-83 (July 11, 2018).