On March 20, 2020, the Office of the United States Trade Representative (“USTR”) announced that in light of ongoing developments in the national fight against the COVID-19 outbreak, it would accept requests from interested parties to obtain exclusions from the 25% or 7.5% tariffs on imports from China that were imposed starting in 2018 under the Section 301 trade statute. Companies that successfully obtain exemptions would be entitled to enter their conforming products without paying Section 301 tariffs and would obtain a refund (with interest) back to the original date that the tariffs were imposed. Companies that failed to apply by the original exclusion request deadline and companies whose requests had been denied are all eligible to apply under the latest USTR notice. Applicants must establish by specific and detailed evidence, however, that their exclusion request is for products that are needed in the United States to respond to the virus outbreak.
While the focus of USTR’s latest announcement is on medical and healthcare products, companies that import or have been importers of products from China subject to Section 301 tariffs should consider filing requests if they can show that their products are connected to or useful in the virus response efforts. Examples of such products include items necessary for construction, upgrading or maintenance of healthcare facilities and critical infrastructure, inputs and equipment for manufacturing of healthcare related supplies, and industrial and agricultural maintenance supplies and equipment.
The newly announced public comment process associated with the virus outbreak does not replace the current exclusion process or the Section 301 exclusion requests that were already submitted to USTR. The comments can be submitted regardless of whether the product at issue is subject to a pending or denied Section 301 exclusion request.
The docket for public comments on Regulations.gov will remain open at least until June 25, 2020 and may be extended by USTR as appropriate. However, interested parties are encouraged to submit comments as soon as possible to facilitate timely consideration by USTR. Each comment must identify the product at issue and explain precisely how the product relates to response efforts to the outbreak. The comment should also contain the ten-digit subheading of Harmonized Tariff Schedule of the United States (“HTSUS”) applicable to the product, its functionality, and physical characteristics (e.g., dimensions, material composition, or other characteristics).
Interested parties that oppose or support an exclusion request will have an opportunity to comment. Such response comments must be submitted within three business days after the exclusion request is posted in the docket. The docket may be accessed via this link: https://www.regulations.gov/docket?D=USTR-2020-0014.
For further information or assistance in submitting an exclusion request, contact a member of the Customs and International Trade Team: Douglas J. Heffner, Nate B. Bolin, Kathleen M. Murphy, James Sawyer, William R. Rucker, Richard P. Ferrin, Nicolas Guzman, Mollie Sitkowski, Carolyn M. Bethea, Stephen Y. Chen, or Qiusi Y. Newcom.
As the number of cases around the world grows, Faegre Drinker’s Coronavirus Resource Center is available to help you understand and assess the legal, regulatory and commercial implications of COVID-19.