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MEMA Staff Contacts: Ann WilsonCatherine Boland, and Leigh Merino

Background

On March 22, President Donald Trump announced actions against China to impose tariffs on billions of dollars’ worth of imports (USTR Press Release). These tariffs are based on findings of IP theft and technology transfer in the Office of the U.S. Trade Representative’s (USTR) Section 301 investigation report. These tariffs are one of a set of various planned remedies.

On March 23, the USTR also launched a new WTO challenge against China.

Additionally, Treasury Secretary Mnuchin was directed to deliver a list of restrictions on Chinese investment, including state-sponsored investment funds, acquiring American companies to gain access to their technology.

Status

To date, there are 3 tranches of tariffs on Chinese imports

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 in the coming months requiring importers to raise the amount/coverage on their customs bond.

View MEMA's Section 301 tariffs timeline here

View USTR Section 301 Investigations information here

1st Tariff List - $34 Billion

25 percent tariffs went into effect on July 6, 2018 on $34 billion worth of Chinese imports

  • View list here – Annex A/B

  • China concurrently announced 25 percent retaliatory tariffs on 545 American items.

  • U.S. Customs posted guidance about the Sec. 301 25 percent tariffs on its website.

Product Exclusions Process:

The product exclusion process for the 1st list of tariffs closed on October 9, 2018. 

Responses to a request for exclusion of a particular product are due 14 days after the request is posted in docket number USTR-2018-0025 on www.regulations.gov. Any replies to responses to an exclusion request are due 7 days after the close of the 14 day response period.  USTR is not notifying companies of exclusion request responses, so please remember to check the docket regularly. 

Any exclusion granted will apply retroactively to the July 6 date of the imposition of the duties.  

2nd Tariff List - $16 Billion

​25 percent tariffs went into effect on August 23, 2018 on $16 billion worth of Chinese imports

Product Exclusions Process:

Companies can file for product exclusions from the second round of China 301 tariffs through the USTR.

USTR must receive requests to exclude a particular product by December 18, 2018 (this will be the only opportunity for members to submit exclusion requests for the second tranche, it's not a rolling submissions process like steel and aluminum).

Responses to a request for exclusion of a particular product are due 14 days after the request is posted in docket number USTR-2018-0032 on www.regulations.gov.  Any replies to responses to an exclusion request are due 7 days after the close of the 14 day response period. 

Any exclusion granted will apply retroactively to the August 23 date of the imposition of the duties.  

3rd Tariff List - $200 billion

10 percent tariffs went into effect on September 24, 2018 on roughly $200 billion worth of Chinese imports.  These tariffs will increase to 25 percent on January 1, 2019.

  • View Federal Register notice here;  View list here.  The final list has 5,745 full or partial lines of the original 6,031 tariff lines proposed back in July. The Federal Register notice does not mention an exclusions process.  

  • The President indicated in his announcement of the tariffs that "if China takes retaliatory action … we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."  

  • China has announced 5 / 10 percent tariffs on $60 billion worth of U.S. goods on Sept. 24, the same day the third round of Sec. 301 tariffs went into effect.

Actions MEMA Has Taken on Your Behalf

Additional Resources

​MEMA Media Coverage

​FAQs

What products are subject to the tariff? Are vehicle parts included? The list of products subject to the 25 percent tariff can be found here (Annex A/B).  HTS Subheading 8708, which covers motor vehicle parts, is not included in this list. However, imports under other categories of parts and materials that are purchased by suppliers to make components are included. It is recommended you consult the list to see what is included.

​USTR also announced 25 percent tariffs on $16 billion of additional products, listed in Second Tranche, which went into effect on August 23, 2018 and 10 percent tariffs on an additional list of $200 billion of Chinese imports went into effect on September 24, 2018 (10 percent tariffs will increase to 25 percent on Jan. 1, 2018).

When do the tariffs take effect? Products listed in Annex A/B are subject to a 25 percent tariff effective July 6, 2018.  Products listed in the second tranche are subject to a 25 percent tariff effective August 23, 2018.  Products listed in the third tranche are subject to a 10 percent tariff effective September 24, 2018 (these will increase to 25 percent on January 1, 2019).

When do the tariffs expire? There is no sunset date for the Sec. 301 tariffs on Chinese imports. The administration can cancel the tariffs by proclamation.

Were there new products included in the USTR action? In the President's September 17 announcement on the third tranche of tariffs, he indicated that "if China takes retaliatory action … we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."

Will there be an exclusions process? Yes. Product exclusion requests for Annex A/B were due by October 9, 2018.  Product exclusion requests for the second tranche are due by December 18, 2018. 

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