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U.S. Importers Not Yet Able to Take Advantage of Section 301 Product Exclusions

As previously reported, the Office of the U.S. Trade Representative recently announced the first batch of products that will be excluded from the additional 25 percent duty imposed under Section 301 on some US$34 billion worth of imports from mainland China (the so-called List 1 products). These product exclusions, covering the specific tariff lines and products described below, will be retroactive to 6 July 2018 and remain in place through 27 December 2019.

  • Seven existing 10-digit HTSUS subheadings: 8412.21.0075, 8418.69.0120, 8480.71.8045, 8482.10.5044, 8482.10.5048, 8482.10.5052 and 8525.60.1010; and
  • 24 specially prepared product descriptions, covering such items as certain spark-ignition engines for marine propulsion, stainless steel stretchers, roller machines with dies for embossing paper, plastic salad spinners, water filtration apparatus, winches, elevators, belt conveyors, work stands, radiation therapy systems, thermostats, stainless steel guards, stainless steel scrapers and stainless steel suction boxes.

However, the partial shutdown of the federal government is currently preventing U.S. importers from taking advantage of these product exclusions, including those that apply to a full 10-digit tariff line. The reason for this is that the Automated Commercial Environment is programmed to require a Chapter 99 number (9903.88.01) for all “articles the product of China, as provided for in U.S. note 20(a) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(b)…[List 1].” The exclusion notice provides for a different Chapter 99 number (9903.88.05) that tells ACE that the product imported qualifies for one of the exemptions. Since 9903.88.05 has not yet been programmed into ACE, importers are not able to take advantage of the product exclusions.

U.S. Customs and Border Protection indicated in a 28 December notice that any updates to ACE will be implemented ten business days after the shutdown has ended. Until these updates are completed, entry and entry summaries must be submitted without the applicable Chapter 99 product exclusion number.  Entry and entry summaries will be rejected by ACE if the applicable Chapter 99 product exclusion number is transmitted. Once CBP issues appropriate guidance and implements the necessary ACE enhancements, a post-summary correction or a protest may be submitted for a refund of duties.

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