Some Section 301 Importers Given Opportunity for Exclusions

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Oct. 18,2021

The Office of the United States Trade Representative (USTR) is formally requesting comments on the possible reinstatement of certain Section 301 duty exclusions. As discussed here, this Federal Register Notice follows U.S. Trade Representative Katherine Tai’s announcement that the United States will restart the exclusion process for U.S. companies seeking exemptions from tariffs on Chinese products.

The USTR seeks comments on whether to reinstate particular exclusions that were previously extended. The agency also seeks comments on the appropriate length of reinstated exclusions. Each possible reinstatement will be evaluated on a case-by-case basis. This means that if you had an extended exclusion, it will be necessary to file comments to have it reinstated.

As with the original exclusion process, the USTR will focus their analysis on whether the product remains only available in China. Commenters are encouraged to address:

- Whether the product is available from sources in the United States or in third countries.
- Any changes in the global supply chain with respect to the particular product or any other relevant industry developments.
- Any efforts U.S. imports have made to source the product from the United States or third countries.
- Domestic capacity for producing the product in the United States.
- If a failure to reinstate the exclusion will cause severe economic harm to the commenter or other U.S. interests, including
  damage to small businesses, employment, manufacturing output, and critical U.S. supply chains
- The overall impact of the exclusions towards the goal of eliminating of China’s acts, policies, and practices covered in the Section 301 investigation.

Any exclusions reinstated under this comment period review would be retroactive with respect to merchandise entered, or withdrawn from warehouse, for consumption on or after the opening of the docket on October 12, 2021, for which the entries are not liquidated at the time the claim to apply the reinstated exclusion is made to U.S. Customs and Border Protection in accordance with their procedures. Comments on the possible reinstatement of particular exclusions are due December 1, 2021.

While this round of comments is targeted at previously extended exclusions, there have been some indications that further rounds of exclusion review are possible. Savvy importers subject to 301 duties should be considering how their import experience would measure up to the factors above if additional comments are solicited by the USTR.

The comment process is similar to the original Section 301 exclusion request process and the attorneys at Barnes, Richardson & Colburn, LLP have significant experience applying for and receiving exclusions. Please do not hesitate to contact us.