Tag: USTR

USTR Finalizes New Section 301 Tariffs

The United States Trade Representative (USTR) published a Federal Register notice detailing its final modifications to the Section 301 tariffs on China-origin products. USTR has largely retained the proposed list of products subject to Section 301 tariffs announced in the May 2024 Federal Register notice (see our previous alert here) with a few modifications, including adjusting the rates and implementation dates for a number of tariff categories and expanding or limiting certain machinery and solar manufacturing equipment exclusions. USTR also proposes to impose new Section 301 tariff increases on certain tungsten products, polysilicon, and doped wafers.

The notice, published on September 18, 2024, clarifies that tariff increases will take effect on September 27, 2024, and subsequently on January 1, 2025 and January 1, 2026 (Annex A). The final modifications to Section 301 tariffs will apply across the following strategic sectors:

  • Steel and aluminum products – increase from 0-7.5% to 25%
  • Electric vehicles (EVs) – increase from 25% to 100%
  • Batteries
    • Lithium-ion EV batteries – increase from 7.5% to 25%
    • Battery parts (non-lithium-ion batteries) – increase from 7.5% to 25%
    • Certain critical minerals – increase from 0% to 25%
    • Lithium-ion non-EV batteries – increase from 7.5% to 25% on January 1, 2026
    • Natural graphite – increase from 0% to 25% on January 1, 2026
  • Permanent magnets – increase from 0% to 25% on January 1, 2026,
  • Solar cells (whether or not assembled into modules) – increase from 25% to 50%
  • Ship-to-shore cranes – increase from 0% to 25% (with certain exclusions)
  • Medical products
    • Syringes and needles (excluding enteral syringes) – increase from 0% to 100%
    • Enteral syringes – increase from 0% to 100% on January 1, 2026
    • Surgical and non-surgical respirators and facemasks (other than disposable):
      • increase from 0-7.5% to 25%; increase from 25% to 50% on January 1, 2026
    • Disposable textile facemasks
      • January 1, 2025, increase from 5% to 25%; increase from 25% to 50% on January 1, 2026
    • Rubber medical or surgical gloves:
      • increase from 7.5% to 50% on January 1, 2025; increase from 50% to 100% on January 1, 2026
    • Semiconductors – increase from 25% to 50% on January 1, 2025

USTR adopted 14 exclusions to temporarily exclude solar wafer and cell manufacturing equipment from Section 301 tariffs (Annex B), while rejecting five exclusions for solar module manufacturing equipment proposed in the May 2024 notice. The exclusions are retroactive and applicable to products entered for consumption or withdrawn from warehouse for consumption on or after January 1, 2024, and through May 31, 2025. USTR also granted a temporary exclusion for ship-to-shore gantry cranes imported under contracts executed before May 14, 2024, and delivered prior to May 14, 2026. To use this exclusion, the applicable importers must complete and file the certification (Annex D).

With respect to machinery exclusion, USTR added five additional subheadings to the proposed 312 subheadings to be eligible for consideration of temporary exclusions. USTR did not add subheadings outside of Chapters 84 and 85 or subheadings that include only parts, accessories, consumables, or general equipment that cannot physically change a good. USTR will likely issue additional guidance to seek exclusions of products under these eligible subheadings.

Importers should assess the (i) table of the tariff increases for the specified product groups (Annex A), (ii) temporary exclusions for solar manufacturing equipment (Annex B), (iii) the Harmonized Tariff Schedule of the United States (HTSUS) modifications to impose additional duties, to increase rates of additional duties, and to exclude certain solar manufacturing equipment from additional duties (Annex C), (iv) Importer Certification for ship-to-shore cranes entering under the exclusion (Annex D), and (v) HTSUS subheadings eligible for consideration of temporary exclusion under the machinery exclusion process (Annex E). The descriptions set forth in Annex A are informal summary descriptions, and importers should refer to the HTSUS modifications contained in Annex C for the purposes of assessing Section 301 duties and exclusions.

Importers should also carefully review the final list of products subject to the increased Section 301 tariff, with their supply chains, to identify products subject to increases in tariff rates as a result of the recent of USTR and consider appropriate mitigation strategies.

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USTR Seeks Comments on Section 301 Tariffs on Chinese Goods; Portal Opens Nov. 15

The Office of the U.S. Trade Representative (USTR) announced Oct. 17 that starting Nov. 15, it will begin soliciting comments on the effectiveness of Section 301 tariffs the Trump administration placed on Chinese goods. The notice and request for comments relate to USTR’s ongoing four-year statutory review of the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.

In the Federal Registrar Notice, USTR said it is seeking “public comments on the effectiveness of the actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.”

The USTR is specifically interested in comments on the following:

  • The effectiveness of the actions in obtaining the elimination of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • The effectiveness of the actions in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • Other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation.
  • The effects of the actions on the U.S. economy, including on U.S. consumers.
  • The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits.
  • The effects of the actions on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development.
  • The effects of the actions on U.S. workers, including with respect to employment and wages.
  • The effects of the actions on U.S. small businesses.
  • The effects of the actions on U.S. supply chain resilience.
  • The effects of the actions on the goals of U.S. critical supply chains.
  • Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the United States than the additional duties on particular downstream product(s) or finished good(s) incorporating those inputs.

The continuing assessment of these additional duties has been criticized by some business groups and lawmakers who believe they have hurt both U.S. businesses and U.S. consumers but have not checked China’s behavior. They also have called for the reinstatement of previously issued exclusions and for a new, robust tariff exclusion process. Some labor and civil society groups, however, want the tariffs to remain in place. The fate of these tariffs is closely tied to the Biden administration’s ongoing review and the overall U.S.–China trade relationship. The controversial tariff program that covers upwards of $300 billion worth of imports from China has sparked lawsuits from more than 3,500 importers.

The comment period begins on Nov. 15 and extends until Jan. 17. USTR said it will post specific questions on its website Nov. 1 before the portal opens.

Article By Laura Siegel Rabinowitz, Donald S. Stein, and Madeline Orlando of Greenberg Traurig, LLP

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©2022 Greenberg Traurig, LLP. All rights reserved.

U.S. Increases Tariffs On Chinese Imports

The president announced this week that special Section 301 tariffs on $200 billion of Chinese imports (List 3) will increase from 10% to 25%. The Office of United States Trade Representative (USTR) issued the official notice of the tariff increase May 8. The rate increase is effective on May 10, 2019.

List 3 is composed of about 6,000 different Harmonized Tariff Schedule of the United States (HTSUS) codes and $200 billion worth of imports; comparatively, the previously imposed List 1 and List 2 collectively cover approximately 1,000 HTSUS codes and $50 billion worth of imports from China.

This rate increase will have a massive effect on almost all industries that rely on imports from China, including agriculture, automotive, electronics, textiles, and energy, just to name a few.

Two other things of particular note from the notice:

(1) increased tariffs will be applied to goods entered for consumption (or withdrawn from warehouse for consumption) on or after 12:01 a.m. Eastern time on May 10, 2019, and exported from China on or after May 10, 2019, so goods that were on the water prior to May 10 will not be affected.

(2) USTR indicates that it will promulgate a product exclusion process in the near future so importers, purchasers, trade associations and other interested parties can request that certain products be excluded from the tariff. Domestic producers will also have the opportunity to object to such exclusion applications.

 

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