Industry News

$55 Billion Collected in China Section 301 China Tariffs

By Margaret Lange

Following the findings of the investigation into China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property, and Innovation under Section 301 of the Trade Act of 1974, the U.S. Trade Representative (USTR) began actions to impose additional ad valorem tariffs on certain imported goods from China. July 6th marks the two-year date since the first Section 301 action went into effect with three additional actions taken. The four actions cover $550 Billion in imported of goods from China.

List 1 – $34 Billion Trade Action effective July 6, 2018

List 2 – $16 Billion Trae Action effective August 23, 2018

List 3 – $200 Billion Trade Action effective September 24, 2018

List 4 – $300 Billion Trade Action effective September 1, 2019

The additional tariff rate for Lists One (1) and List Two (2) is 25%. The tariff rate for List Three (3) started at 10% and was later increased to 25%. And, List Four (4A) started at 15% and was later reduced to 7.5% as a result of the Phase One deal. According to the U.S. Customs and Border Protection (CBP) Trade Statistics posted June 17, 2020, CBP has collected $54.6 Billion in Section 301 tariffs on subject imported goods from China since the implementation of these actions.

As part of the Section 301 hearings and comment periods, interested parties were able to express their concerns regarding the impact of the additional tariffs on their businesses. As a result, the USTR implemented an Exclusion process for each of the Section 301 actions, which allowed interested parties to request particular product specific exclusions from the Section 301 tariffs. The exclusion request periods for all four lists are now closed; however, the USTR is still reviewing requests submitted for List Four (4A).  Additionally, the USTR opened a comment period related to exclusions of medical-care products needed to address the COVID–19 outbreak. That comment period closed on June 25, 2020 and the USTR is reviewing those comments.

According to the June 19, 2020 Congressional Research Service report on the Section 301 China Tariff Exclusions, the USTR received a total of 52,746 product exclusion requests for the four Section 301 action list. As of this report, only 6,450 requests (12.2%), covering 2,073 products, have been granted exclusion from the additional tariffs. The USTR published 30 different lists of granted exclusions covering requests for all four tariff actions. The granted exclusions include approximately 77 ten-digit HTS subheadings and 1,996 exclusions based on specific product descriptions. See a complete list of all granted exclusions here.

The exclusions have been granted for up to 12 months from the date of posting in the Federal Register. As the exclusions expire, the USTR has opened comment periods, for any interested party, to submit comments concerning the extension of the granted exclusions. The first five lists of exclusions have already expired, and the USTR granted only 54 products extensions for up to 12 months based on the submitted comments. The remaining 25 exclusion lists are set to expire between July and October of this year. A comment period has been opened for 24 of these lists. The USTR provides directions on submitting comments concerning the expiring exclusions on their website.

See our Section 301 Whitepaper here for more information regarding the status of the China Section 301 tariff actions.