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China Section 301 Investigation and Actions to Address Intellectual Property Violations

Date: March 10, 2020

MEMA Staff Contacts:  Bill Frymoyer and Leigh Merino

Background:

In 2018, the Office of the U.S. Trade Representative (USTR) took actions to impose tariffs on billions of dollars’ worth of imports from China. These tariffs are based on findings of IP theft and technology transfer in the USTR’s Section 301 investigation report.

Beginning in July 2018 and throughout 2019, the USTR rolled out tariff actions in four tranches (a.k.a. Lists 1, 2, 3 and 4A/4B). The progressive nature of the actions was aimed at keeping China at the negotiating table to work out a trade deal with the United States.

On October 11, 2019, President Trump announced a preliminary “Phase 1” agreement was reached and then on December 13, 2019, the two nations officially announced the details of the “Phase 1” agreement. Although the U.S. did decrease tariffs for List 4A and suspended taking any action on List 4B, the 25% tariffs on Lists 1, 2 and 3 remain.

What You Need to Know – Section 301 China Tariff Essentials:

To date, there are 4 tranches of tariffs on Chinese imports. On December 13, 2019, U.S. and China signed a “Phase 1” Agreement. At last update, the 25% tariffs on goods from Lists 1, 2 and 3 are still active except for a limited number of products that were granted a 12-month exclusion by the USTR. USTR approves product exclusions on a rolling basis, notifications for which are officially published in the Federal Register and posted on the USTR website.

Key Actions on Lists 1 – 4

Note:The USTR split the action on List 4 into two groups – “4A” and “4B” – after which President Trump and the USTR took the following actions:

  • Officials from the United States and China announced a “Phase 1” Agreement on December 13, 2019. As a result:

  • The complete text of the Agreement was published January 15, 2020; the title is: “Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China”

  • List 4A product exclusion submissions process closed on January 31, 2020

For more general details and information about Section 301 China actions, please visit the USTR Section 301 Investigations website. From the main landing page, you can visit each of the Lists 1-4 to access all of the related notices and documentation.
https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions

NOTE:  For expiring exclusions, the USTR has published several Federal Register notices generally titled “Request for Comments Concerning the Extension of Particular Exclusions” differentiated by the expiration date. USTR has specific comment submission instructions associated with this action that submitters must heed, including the use of Form A (preferred) or Form B (business confidential information). Links to these notices, forms and related documents are all posted on the USTR website under the various Lists.

For “Section 301 Trade Remedies to be Assessed on Certain Products from China,” please visit the U.S. Customs and Border Protection website for details and links to CBP guidance documents.
https://www.cbp.gov/trade/programs-administration/trade-remedies/section-301b-trade-remedies-be-assessed-certain-products-china

NOTE: Importers should be aware that additional tariffs imposed under Section 232 and 301 are included in the calculation for continuous bond sufficiency limits. As a result, companies paying Section 232 and 301 tariffs may be getting notices from U.S. CBP requiring importers to raise the amount/coverage on their customs bond.

Additional Resources:

This page is not intended to be all inclusive, although MEMA makes every effort to update this page when new information and/or resources are made available. If you have questions or need other information, please contact the MEMA staffers listed at the top of the page.

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