China Section 301 – “List 2” Additional 25% duty effective August 23, 2018 U.S. Trade Representative amends HTSUS provisions – Exemption on U.S. Goods Returned under Section 301

As previously reported, tariff sanctions issued for imported Chinese goods go into effect on August 23, 2018. The USTR has released the final list of the second tranche of 279 products, down from 284 as originally reported last month.

The Federal Register Notice dated July 11, 2018 contains procedures to request product exclusion from the Section 301 action.

In addition, we want to report on the latest development related to the Section 301 duties as they pertain to certain Chapter 98 provisions. Originally, the Section 301 duties did not apply to products imported from China under a heading or subheading in Chapter 98 of the Tariff Schedule. Recently, the USTR has issued a notice to amend the HTSUS provisions on the Section 301 tariff for imported goods assembled abroad under HTSUS 9802.00.80 which provides for duty free treatment.

On Wednesday, USTR Lighthizer announced that imported goods assembled abroad in whole or in part of U.S. components – claimed under HTSUS 9802.00.80 – will have the additional tariff assessed on the value of the complete article less the value of the U.S. components incorporated in the article. In addition, goods imported from China under HTSUS 9802.00.40, 9802.0050 and 9802.00.60 (articles returned to the U.S. after having been exported to be advanced, repaired or improved in condition) will have the additional tariff assessed on the cost of repairs but not on the U.S. good originally exported.