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USTR Says No Section 301 Tariff Exclusions on List 3 Goods Until March

The Trump administration will not initiate a process for excluding goods from the Section 301 additional tariff on US$200 billion worth of imports from mainland China until at least March, according to U.S. Trade Representative Robert Lighthizer. In addition, Lighthizer said, those goods cannot be exempted from the tariff by being entered into a foreign-trade zone.

The so-called List 3 goods were hit with an additional 10 percent tariff as of 24 September 2018 as part of the administration’s response to a determination that mainland China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory. USTR has accepted requests for exclusions from the Section 301 additional 25 percent tariff on US$50 billion worth of goods from the mainland (which was imposed on 6 July 2018 on so-called List 1 items and on 23 August 2018 on List 2 items) and, according to Lighthizer, has granted nearly 1,000 exclusions for List 1 goods. Despite requests from industry and hundreds of lawmakers, however, USTR has not provided for exclusions for List 3 goods.

In letters to lawmakers this week, Lighthizer said USTR will only initiate an exclusion process for these goods if on-going negotiations with mainland China fail and the additional tariff increases from 10 percent to 25 percent on 2 March.

Regarding mainland Chinese goods admitted into FTZs and subsequently entered into U.S. commerce, Lighthizer said “longstanding rules and practices governing such entries continue to apply.” As a result, he said, “as of this time we have not found a basis for exempting U.S. importers who use FTZs from the additional duties, when those duties apply to all other U.S. importers.”

Content provided by Picture: HKTDC Research
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