United States Trade Representative Robert Lighthizer has indicated that his office will set up a process whereby interested parties may seek to exempt Chinese-origin products from the Third Tranche of retaliatory tariffs imposed against Chinese goods pursuant to Section 301 of the Trade Act of 1974. These tariffs, currently set at the rate of 10 percent ad valorem, apply to approximately $200 billion in annual imports from China.
The USTR had previously argued that, while exemption procedures were established for products in the first two Tranches of retaliation (imposing 25% ad valorem tariffs on $50 billion worth of Chinese goods), there was no need for an exemption procedure for those tariffs set at 10% ad valorem. Bowing to Congressional pressure, the USTR now agreed to set up such a procedure by the end of May, 2019.
According to press reports, bilateral trade negotiations between China and the United States, should they come to a fruitful conclusion, could result in the rapid elimination of these 10 percent tariffs [Section 301 tariffs previously imposed at a rate of 25 percent ad valorem are likely to remain in place even longer]. However, even if the 10 percent tariffs were to disappear in the near future, an exemption process would provide a way for interested parties to pursue refunds of Section 301 duties paid to date.
Our firm has assisted a number of clients in successfully securing Section 301 exemptions. We can provide assistance to firms seeing exemption from these tariffs.
Given the large volume of exemption requests which USTR has received to date, interested parties are well advised to apply sooner rather than later for exemptions.
Please contact one of our attorneys if you have questions or require assistance on this matter.