[US-China Trade War] Mainland China Tariff Exclusion Request Denials Increase Amid Limited Approvals

Over the last month the Office of the U.S. Trade Representative has denied hundreds more requests for exclusions from the Section 301 additional tariffs on imports from mainland China. USTR is continuing to review outstanding exclusion requests for List 1 and List 2 goods, imports of which are collectively worth about US$50 billion, and has set a 30 September deadline for requests for List 3 goods, which are worth about US$200 billion.

Approved exclusions are available for any product that meets the specific product description, regardless of whether the importer filed an exclusion request. In addition, the scope of each exclusion is governed by the scope of the 10-digit subheading or the specific product description to which it applies, not by the product descriptions set out in any particular request. Exclusions are effective for one year, retroactive to a specified date, and importers of excluded goods may apply for refunds of tariffs paid on covered goods since the associated date.

List 1

Information from USTR indicates that of the 10,823 exclusion requests submitted for List 1 goods, as of 23 August there were 6,877 denials and 2,813 approvals. One exclusion request is still at the initial stage of review and all of the remaining requests (1,132) are being reviewed with U.S. Customs and Border Protection to determine whether the exclusions would be administrable.

List 2

USTR has denied 1,484 of the 2,928 exclusion requests received for List 2 goods but has issued 292 approvals, which are retroactive to 23 August 2018. Eight requests are at the initial stage of review, one request is still undergoing substantive review and 1,143 are being reviewed for administrability.

List 3

USTR began accepting tariff exclusion requests for List 3 goods as of 30 June and all such requests must be submitted by 30 September. USTR has already announced the first ten products excluded from List 3 but has released no information about the status of other requests. Any exemptions granted will be retroactive to 24 September 2018.

List 4

An additional 15 percent tariff is set to be imposed on US$300 billion worth of goods imported from mainland China on 1 September (List 4A) and 15 December (List 4B). No plans have yet been announced to accept requests to exclude specific products from this tariff.

(2019-08-30  Source: HKTDC RESEARCH)