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Lawmakers Seek Exclusion Process for Latest Mainland China Tariffs

Nearly 200 lawmakers wrote to U.S. Trade Representative Robert Lighthizer recently requesting the establishment of a process allowing U.S. companies to request exclusions from the additional tariffs imposed on US$200 billion worth of goods imported from mainland China. These goods were assessed an additional 10 percent duty beginning on 24 September and the tariff is slated to rise to 25 percent as of 1 January 2019.

Following a Section 301 determination that mainland China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory, the Trump administration has levied higher tariffs on mainland Chinese goods in stages. The first phase imposed a 25 percent additional tariff on US$34 billion worth of imports as of 6 July, and exclusion requests were due by 9 October. The administration extended that tariff to another US$16 billion worth of goods as of 23 August and is accepting exclusion requests through 18 December. The so-called List 3 goods were assessed a 10 percent additional tariff as of 24 September but no exclusion request process has yet been announced.

In a 15 October letter, more than 150 Republican and Democrat members of the House of Representatives said the lack of an exclusion process for the List 3 goods “is a glaring omission, particularly given its size in relation to the first two lists.” The lawmakers explained that an exclusion process “is vital to ensuring that U.S. companies can seek relief in the event that there are no alternative suppliers or if other special circumstances exist that could harm their ability to compete in the global marketplace.”

Eleven Democrat senators sent a similar letter to Lighthizer on 18 October. They noted that the goods on List 3, unlike those on the previous two lists, appear to have little to do with the Section 301 investigation’s focus on technology and instead are products that “Americans use each day,” thus making it more important to include an exclusion process for them. The letter asked Lighthizer to indicate whether the administration intends to offer such a process; if so, how; and if not, why.

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