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Trump Open to Delaying Tariff Hike on Mainland Chinese Products

President Trump said on 12 February that he might postpone a planned tariff increase on US$200 billion worth of imports from mainland China if the two sides are “close to a deal.” The so-called List 3 goods were hit with an additional 10 percent tariff as of 24 September 2018 as part of the Trump administration’s response to a Section 301 determination that mainland China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory.

This tariff was scheduled to increase to 25 percent on 1 January but the United States agreed to postpone it to 2 March while the two sides work toward an agreement on issues such as forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Several rounds of negotiations have been held to date, and senior officials are meeting in Beijing this week in an effort to make further progress.

According to press sources, Trump told reporters on 12 February that talks “are going well” and that “at some point” (though likely not until next month) he plans to meet with mainland Chinese President Xi Jinping “and make the parts of the deal that the group is unable to make.” Trump added that if the talks progress to the point that “we think we can make a real deal, and it’s going to get done,” the planned tariff increase could “slide for a little while.” However, he added that in general he is “not inclined to do that.”

In other news of potential interest, as of 10 February U.S. Customs and Border Protection is accepting in the Automated Commercial Environment entries of products that have been excluded from the Section 301 additional tariffs on imports from mainland China. The exclusions granted thus far, which apply only to so-called List 1 goods subject to a 25 percent additional tariff, are retroactive to 6 July 2018 and will be effective until 28 December 2019.

The scope of each exclusion is governed by the scope of the 10-digit HTSUS subheadings and product descriptions in the official notice, not by the product descriptions set out in any particular exclusion request. Moreover, exclusions are available for any product that meets the description in the official notice, regardless of whether the importer filed an exclusion request.

CBP states that when submitting entries for excluded products, importers should report HTSUS 9903.88.05 in addition to the regular HTSUS chapters 84, 85 and 90 classification. However, importers should not submit the corresponding Chapter 99 number for the Section 301 duties when HTSUS 9903.88.05 is submitted. Refunds of Section 301 tariffs paid on imports of excluded products on or after 6 July 2018 will not be automatic. Instead, importers can request such refunds by filing post-summary corrections following the instructions set forth above. If the entry has already liquidated, importers may protest the liquidation.

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