Importers of Chinese pumps, electric motors and bicycles got word on Wednesday that they had been waiting on for more than a year. The Office of the U.S. Trade Representative said it will bring back 352 exclusions from the Section 301 tariffs, the duties the Trump administration put on an estimated $370 billion worth of Chinese imports at rates of 7.5 to 25 percent.
The relief reaches backward. The exclusions apply from October 12, 2021 and run through December 31, 2022. Holland & Knight, a law firm that follows the issue, said importers of qualifying goods can ask for refunds on duties paid since the October date, as long as the entries are still unliquidated or within 180 days of liquidation. Nobody had to file a request first; any product that fits an exclusion’s written description qualifies.
The list covers industrial components such as pumps and electric motors, certain car parts and chemicals, backpacks, bicycles, vacuum cleaners and other consumer goods.
How the list was cut down
The Trump administration originally granted more than 2,200 exclusions to spare certain industries and retailers. Most lapsed. Of those, 549 were extended for a year, and that extension ran out at the end of 2020.
In October 2021 the USTR asked for comment on whether to reinstate the 549. More than 2,000 requests came back from businesses, most of them wanting the tariffs peeled back for importers who were paying them. The agency brought back 352 and declined to renew exemptions on 197 categories. It said the decision followed “careful consideration of the public comments and in consultation with other U.S. agencies.” Holland & Knight listed the factors the USTR weighed: economic harm, effects on small businesses, employment, manufacturing output, critical supply chains, and whether an exclusion would undercut the goal of ending China’s trade practices.
Pressure from Congress
Last month a bipartisan group of 41 senators wrote to Trade Representative Katherine Tai asking that all goods be eligible for consideration. “The current narrow exclusion process denies many a fair shake, and instead picks winners and losers among businesses,” they wrote. They also objected that the exemptions reach back only to October 2021, which leaves importers having paid tariffs for nearly 10 months after the old exclusions expired.
The fight is not settled on Capitol Hill. The Senate’s United States Innovation and Competition Act would reinstate every expired exclusion and set up a new process at the USTR. The House’s America COMPETES Act has no such language, and a conference committee is expected to take up the differences in the coming weeks. Tai told the House Ways and Means Committee that the United States should turn the page on its old approach to China and build new domestic tools, though Holland & Knight noted it is unclear whether tariffs will be among them.
The USTR said it remains open to “further extensions[,] as appropriate” beyond the end of 2022. Importers have another route in the meantime: the Section 301 lawsuit awaiting a decision at the U.S. Court of International Trade already has more than 4,000 plaintiffs, and importers who paid duties on goods from Lists 3 and 4A can still join.
Sources
- U.S. reinstates tariff exemptions on 352 Chinese products
- USTR Reinstates 352 Exclusions from Section 301 Tariffs, with Retroactive Effect | Insights | Holland & Knight
- USTR Reinstates 352 Section 301 China Tariff Exclusions
