Section 301 China Tariff Actions Take Effect Sept. 27
Trade Update • Sept 16, 2024
he Office of the United States Trade Representative (USTR) has announced final action to increase Section 301 tariffs on imports from China and allow certain tariff exclusions. These increases are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after September 27, 2024.
Products Affected
The modifications include increasing Section 301 duties on 382 HTSUS subheadings and 7 statistical reporting numbers of the HTSUS under 14 product groups (please refer to see Annex A in the USTR notice for full details). Additionally, the U.S. Trade Representative is modifying the actions to temporarily exclude from additional duties certain solar manufacturing equipment under 14 product specific exclusions.
- Battery parts (non-lithium-ion batteries) – 25%
- Electric vehicles – 100%
- Facemasks/Respirators – no less than 25% as of Sept 27, 2024 to 50% in 2026
- Lithium-ion electrical vehicle batteries – 25%
- Lithium-ion non-electrical vehicle batteries – 25% in 2026
- Medical gloves – no less than 25% in 2026 to 100% in 2026
- Natural graphite – 25% in 2026
- Other critical minerals – 25%
- Permanent magnets – 25% in 2026
- Semiconductors – 50% in 2025
- Ship-to-shore cranes – 25%
- Solar cells (whether or not assembled into modules) – 50%
- Steel and aluminum products – 25%
- Syringes and needles – no less than 50%
Additional Temporary Exclusions
The USTR has also introduced a process for interested parties to request temporary exclusions for machinery used in domestic manufacturing. This exclusion process primarily focuses on machinery classified under Chapters 84 and 85 of the Harmonized Tariff Schedule (HTS). Additionally, certain equipment related to solar manufacturing has been excluded from these tariff increases until May 31, 2025, to support U.S. investments in clean energy technologies.
Changes to Proposal from May 2024
- Tariff Increases and Product Coverage:
- The original proposal from May 2024 sought to increase tariffs on 382 Harmonized Tariff Schedule of the United States (HTSUS) subheadings. The final determination maintains this, but with modifications based on public feedback.
- Products in strategic sectors, such as electric vehicles, lithium-ion batteries, solar cells, semiconductors, and medical gloves, had tariff increases proposed, and these are largely upheld, but some product subheadings have been refined based on comments.
- Adjustments to Solar Manufacturing Equipment Exclusions:
- While the May proposal suggested exclusions for 19 categories of solar manufacturing equipment, the final determination removes exclusions for solar module manufacturing equipment due to the availability of these items from alternative sources.
- However, 14 exclusions related to solar cell and wafer manufacturing equipment were retained, reflecting a more targeted approach to support U.S. solar manufacturing.
- Adjustments to Timing and Rates:
- The timeline for some tariff increases has been modified to allow for a gradual phase-in, reflecting concerns raised in public comments. For example, facemask tariffs are set to rise to 25% in 2024 and then further increase to 50% in 2026, rather than imposing the full increase immediately.
- Responses to Industry-Specific Concerns:
- There were specific adjustments made to tariffs on items such as ship-to-shore cranes and medical gloves based on feedback from industry stakeholders. For example, an exclusion period was established for cranes fulfilling contracts executed before May 14, 2024, and medical gloves tariffs will increase to 50% in 2025 and 100% in 2026.
- Addition of Critical Minerals:
- Some critical mineral categories saw a broadening of scope with increased tariffs aimed at enhancing U.S. supply chain resilience. This includes natural graphite and various tungsten and tantalum products, reflecting an effort to reduce reliance on Chinese sources for these strategically important materials.
These changes show a more targeted and phased approach to tariff increases, while retaining the core goals of reducing U.S. reliance on China for key sectors and encouraging domestic manufacturing growth.
Questions or concerns about if your products are affected please contact us.
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