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List 3 Goods Exported Prior to 10 May from Mainland China Must Now Be Entered Before 15 June to Avoid Tariff Hike

The Office of the U.S. Trade Representative announced on 31 May that it has agreed to extend by two weeks the deadline for List 3 goods exported from mainland China prior to 10 May to face a 10 percent additional tariff in lieu of the higher 25 percent rate currently in effect. As a result, List 3 goods exported from the mainland prior to 10 May will continue to be subject to an additional tariff of 10 percent as long as they are entered into the United States prior to 15 June. A notice formally adopting this extension will be published in the Federal Register during the week of 3 June.

Many companies were caught off guard with goods on the water when the increased tariffs were announced. USTR initially said that any goods exported before 10 May would be grandfathered in at the 10 percent tariff rate regardless of the import date, but less than 24 hours later the agency modified that notice and imposed an imported-by date of 1 June. This date, only 21 days after the increased tariffs went into effect, would have negatively impacted many companies. Those that clear their goods through East Coast ports were especially disadvantaged, as ships could not possibly leave mainland China, clear the Panama Canal, and arrive in an East Coast port within 21 days. According to USTR, the limited extension will further account for customs enforcement factors and the transit time by sea between mainland China and the United States.

Sandler, Travis & Rosenberg, P.A. discussed these concerns with members of Congress and USTR, explored legal action to prevent the tariff increase on goods shipped in reliance upon USTR’s original notice, and advocated for a revision. USTR subsequently made this favourable change, which will benefit all companies importing List 3 goods from mainland China.

U.S. Customs and Border Protection indicated on 31 May that it had not yet updated the Automated Commercial Environment to reflect the extension. As a result, it is recommending U.S. importers entering subject goods on or after 1 June to consider waiting to file the entry summary pursuant to the ten-day entry summary filing period. This will allow importers to file the appropriate duty rate with the entry summary when CBP updates ACE. CBP added that importers who file entry summaries and retroactively become subject to a lower duty rate may refile the entry summary (if the entry summary is still in trade control) or file a post-summary correction with the appropriate duty rate (if the entry summary is in CBP control).

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