Most Section 301 Exclusions Expiring Mid-June

May 28, 2024
By: Chaney A. Finn

As any importer will tell you, the trade community was recently hit with the news that most Chinese goods imported into the U.S. will have a continued or increased tariff amount under the Section 301 duties. This announcement came after the Office of the United States Trade Representative (USTR) concluded that China has not eliminated its technology transfer related acts, policies, and practices, which continue to impose a burden or restriction on U.S. commerce, following its four-year review of the Section 301 duties.

382 Harmonized Tariff Schedule (HTS) subheadings and five statistical reporting numbers subject to the increase were recently published. Click here to view the proposed HTS codes subject to the Section 301 increase which is provided for in Annex A of the USTR notice.

The most recent development is the USTR’s announcement that 164 Section 301 tariff exclusions will be extended through May 31, and the other 265 exclusions will expire June 14. The exclusion extensions mostly pertained to COVID-19 pandemic-related goods, and to goods initially granted during the Trump administration which were restored during the Biden administration.

The exclusions will expire for a variety of reasons, including a lack of detail provided for moving sourcing out of China, specifying the Chinese supplier was the lowest price source, and if there were domestic producers that were able to supply buyers with adequate quantity and quality. Some exclusions will expire because importers will be able to source those goods from other countries. Notably, 102 of the 429 exclusions were not even requested to be extended.

The USTR’s notice stated, "Many comments asserted that a product was unavailable outside of China due to costs associated with finding alternative sources or based on the limited availability of certain product specifications or comparable quality outside of China. Without additional explanation of efforts undertaken or how further extending the exclusion would aid efforts to shift sourcing, the U.S. Trade Representative declined to extend these exclusions."

Should you have any questions regarding Section 301 exclusions, or any other trade-related questions, please contact any attorney at Barnes, Richardson & Colburn, LLP.