Scarbrough, Industry News.
It was announced on May 5, 2019 that an additional 25% tax for the third tranche of Section 301 tariffs, also known as List 3, would go into effect on May 10, 2019, and that effective date is now official….. However, with one change. The USTR has added additional verbiage that allows importers to pay 10% instead of 25% for a limited time based on when the shipment exported from China.
Any imports from China that export on or after May 10
Any Chinese export destined to the United States on or after May 10, 2019 is subject to an additional 25% tariff rate. What is considered the “export date” (ie. sailing date, berthing date) is still unconfirmed, but will most likely be pulled from the date of sailing in AMS. HTS number for these imports are still 9903.88.03 and 9903.88.04.
Any imports from China that export before May 10
The limited time frame applicable to 10% mentioned above is applied to any Chinese export destined for the United States before May 10, 2019, but also entered for consumption before June 1, 2019. These shipments will still incur the 10% additional tariff rate using a new HTS #9903.88.09, which indicates to U.S. Customs that the shipment falls into this specific scenario. In other words, if a U.S. import went into consumption between May 10 – June 1, 2019 but was also exported before May 10, it will only incur the 10% increase in duty.
Any imports from China that enter on June 1 and after
The subject imports of China that are entered into the United States on or after June 1, 2019 are subject to the 25 percent rate of additional duty under HTS 9903.88.03 and 9903.88.04.
Country of Origin
The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.
Duty Savings
If the Section 301 tariffs are affecting your company, please consider joining us in a free webinar on June 19, 2019 @ 1:30 pm CST. Scarbrough’s President and COO, Adam Hill, along with Patrick Caulfield, an attorney at GDLSK, an international trade and customs law firm, will talk about legal opportunities to recover or avoid paying duty to CBP. This is an interactive webinar set up as a question/answer forum. Please submit your questions ahead of time or via live chat. Can’t make it? Register anyway and receive a recording.
Consulting
If you feel the need to talk to someone sooner, Scarbrough Consulting, Inc. is offering a free 20-minute consultation. If you are interested in taking advantage, please email consulting@scarbrough-intl.com. Furthermore, if you would like to speak with an international trade attorney, Patrick Caulfield with GDLSK is also available. You can email him at PCaulfield@GDLSK.COM.
View the full text from U.S. Customs below:
Visit Site BACKGROUND: On August 18, 2017, the Office of the United States Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. On June 20, 2018, the USTR published a Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301(83 Federal Register (FR) 28710), imposing additional import duties on a list of Chinese products. On August 16, 2018, the USTR published a Notice of Action (83 FR 40823) providing for the imposition of additional import duties on a second list of Chinese Products. On September 21, 2018, the USTR published a Notice of Modification of Action in the Section 301(83 FR 47974) investigation providing for the imposition of additional import duties on over 5,700 full and partial eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) on goods imported from the People’s Republic of China (China). The September 21, 2018 list of products can be found in Annex A to the USTR’s September 21, 2018 Notice, and was amended on September 28, 2018 (83 FR 49153). The rate of additional duties was initially 10 percent and the duties were effective starting on September 24, 2018. The duty rate on these imports was originally scheduled to increase to 25 percent, but the increase was subsequently postponed. On May 9, 2019, USTR published a Notice of Modification of Action (84 FR 20459) in the Section 301 investigation increasing the duty rate to 25 percent on imports from China on the over 5,700 full and partial eight-digit subheadings of the HTSUS listed in Annex A to the USTR’s September 21, 2018 Notice, as amended. USTR will also shortly publish a Federal Register Notice announcing the duty rate for such imports exported before May 10, 2019. GUIDANCE: The increase in additional import duties for Chinese goods covered by the September 21, 2018 Federal Register notice, as amended, is now effective on May 10, 2019. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, the rate of additional duties on imported articles classified in a subheading covered by the September 21, 2018 Federal Register notice, as amended, will be 25 percent ad valorem. For subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, report the following HTS numbers and duty rates: HTS: 9903.88.03 and 9903.88.04 Duty Rate: 25 percent For subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and before June 1, 2019, and exported to the United States before May 10, 2019, report the following HTS number and duty rate: HTS: 9903.88.09 Duty Rate: 10 percent The subject imports of China that are entered into the United States on or after June 1, 2019 are subject to the 25 percent rate of additional duty under HTS 9903.88.03 and 9903.88.04. The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export. FOR FURTHER INFORMATION: For further information, please refer to the USTR’s web site at USTR.gov and the Federal Register for official announcements on this matter. Questions related to Section 301 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to their Client Representative.
