Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Act Now to Secure Refunds on Goods Excluded From Section 301 China Tariffs

Posted August 16, 2019

As trade tensions between China and the United States continue apace, roiling the markets and prompting fears of a slump in growth, with hopes of reaching an agreement any time soon fading, importers should be factoring the Trump administration’s Section 301 tariffs on most Chinese imports into their longer-term outlook and doing everything possible meanwhile to ensure these surtaxes are being mitigated to fullest extent possible.

As strict deadlines are involved, importers need to keep a close watch on liquidation dates so that possible recovery opportunities are not missed. There is no good reason to put off tackling the recovery process now, even though implementation of the measures the administration hurridly put in place to help defray some of the impacts on manufacturers and other importers in their supply chains have been problematic, to say the least.

Exclusion Process Overview

Up to now, Section 301 tariffs have been imposed against three separate lists of goods imported from China: a 25% tariff on List 1 goods (roughly $34 billion) effective July 6, 2018; a 25% tariff on List 2 goods ($16 billion) effective Aug. 23, 2018; and tariffs of 10% and then 25% on List 3 goods (valued at $200 billion) effective Sept. 24, 2018, and May 10, 2019, respectively.

The Office of the U.S. Trade Representative is currently still digging out from an enormous backlog of requests for tariff exclusions for List 1 and List 2 goods, with some being approved out of the thousands submitted, but many more of denied. Requests for exclusions for List 3 goods are still being accepted and are due by Sept. 30.

An exclusion process for List 4 goods slated to be hit with a 10% duty (including those which have been temporarily delayed until Dec. 15) on September 1, has not yet been announced by the USTR, but is expected to be issued shortly.

Don’t Miss Out — Stay on Top of Things

It is important to note that in a break from normal practice, the Section 301 tariff exclusions are not limited to only those importers who submitted exclusion requests. The scope of the exclusions are governed by the product descriptions in the Annex, not the product description found in exclusion requests.

Therefore, if you are importing an excluded product (or one that may be, subject to a pending request — submitted by a trade association on behalf of its members, for example), that exclusion applies or will apply to your product, even if your company didn’t request the exclusion. With this in mind, it’s important to always be keeping an eye on things to stay current with the status of both the exclusions granted and those still in the works that are waiting to be reviewed by the USTR before making a final determination.

Claims & Protests

It should be noted that while exclusions are retroactive to the date the subject goods were first imported, if the liquidation of an entry of excluded goods is finalized, you will have no options to claim retroactive refunds of tariffs paid on them.

To avoid this happening, companies can request an extension of liquidation from Customs and Border Protection prior to the expiration of the 314-day liquidation cycle. Liquidation can be extended for up to four years in one-year increments. For example, entries of List 3 goods made around the beginning of October 2018 would be scheduled to liquidate around about now unless an extension has been requested.

Alternatively, if entries of excluded goods have already liquidated (List 1 and List 2 goods, for now), importers can file a protest within 180 days of the date of liquidation.

Tariff Recovery - Take Advantage

Our trade experts have the knowlege and capabilities to help you take full advantage of all available tariff recovery options, in addition to assisting you with questions or concerns about the exclusion process, contact our Consutling Dept. today. 


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