International Trade Team Helps Clients Seek Exclusions From Trade War Tariffs

Alerts / July 12, 2018

International trade tariffs have been leading the news on a daily basis, particularly in light of President Donald J. Trump’s actions to fight Chinese intellectual property and industrial policy trading practices. Our clients, finding themselves in the crosshairs of these and other trade disputes, are looking to the firm’s international trade team for help with excluding their companies’ products from the burdensome costs of these tariffs.

The Office of the U.S. Trade Representative (USTR) imposed, as of July 6, a 25 percent duty hike on imports of Chinese medical and scientific equipment, semiconductors, vehicles and aircraft, electrical and audiovisual equipment, and agricultural and industrial machinery. A second wave of duties was announced on July 10, imposing a 10 percent duty on imports of Chinese chemicals, polymers and plastics, vehicles and transportation equipment, semiconductors and related manufacturing equipment. The USTR also published procedures for companies that wish to request that their products be excluded from these China “Section 301” tariffs.

Mike Snarr and Jing Zhu (Washington, D.C.) and Matt Caligur and Casey Holder (Houston), among other international trade team members, are assisting clients with filing tariff exclusion requests. Requests for exclusion must be filed with the USTR through the portal no later than Oct. 9, 2018, but the team is advising clients to file as soon as possible in anticipation of the large administrative backlog that they expect. Clients are required to complete an application for each affected imported product, detailing the physical characteristics of the item, the applicable U.S. Harmonized Tariff System 10-digit code, and the annual quantities and values of the imported products for each of the past three years. The rationale for seeking an exclusion must explain whether the product is available only in China or whether there are alternatives in the United States or other countries. Clients are also required to explain whether the imposition of duties would cause severe economic harm to U.S. interests and whether the particular product is strategically important in the “Made in China 2025” or other industrial policies. Our International trade analyst, Jing Zhu, can assist with determining whether the products are implicated by any of China’s national industrial policies in order to respond to that element of the application.

Authorship Credit: Michael S. Snarr and Casey E. Holder

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