China Eases Retaliatory Tariffs on U.S. Imports and Purchases U.S. Agricultural Products

Since March 2020, the Chinese government has allowed Chinese companies to file exclusion applications for products currently subject to China’s retaliatory tariffs on U.S. imports. In the official announcement, there is currently no due date for such exclusion applications.

Who May File?

Any Chinese company that imports goods from the U.S. is allowed to file an application through a government portal. The Chinese government will review each application on a case-by-case basis. This exclusion process is a particularly meaningful opportunity for U.S. companies whose subsidiaries in China have been paying retaliatory tariffs on imports from the U.S.

What Products Are Eligible?

The Chinese government has provided a list of 696 8-digit tariff classification codes that are currently subject to retaliatory tariffs against U.S.-origin products. These classifications cover a broad range of product categories, including agricultural products, fuel products, chemicals, lumber, metal products, motors, pumps, machinery and parts thereof, power supplies, optical products, medical equipment/tools, and measuring instruments, among other items. A Chinese company may apply for exclusions based on these 696 tariff classification codes and requests for additional products to be added to this list in order to file an exclusion.

How to File?

The exclusion application is filed via an online portal at https://gszx.mof.gov.cn. The applicant should identify the tariff classification code for the product to be purchased, along with details on the planned transaction amount and support for the exclusion.

Once an application is approved, the Company will receive notification through the portal and can have the retaliatory tariffs prospectively waived for a specific product within the approved transaction amount for up to one year from the approval date. If the actual transaction amount exceeds the approved amount, the applicant should promptly submit a supplemental request prior to the importation of the corresponding merchandise to request the additional waiver.

Importantly, the process for exclusions is prospective, and an approved exclusion would not result in duty refunds for duties paid on customs entries made prior to the approval date.

There have been reports that the Chinese government has actively encouraged companies to apply for exclusions in order to further support its policy of reopening the economy and ramping up production, as China has lifted lockdown orders all over the country.

While the trade war between the U.S. and China continues, the Chinese government recently confirmed that it has increased purchases of agricultural products from the U.S. of soybeans, pork, and cotton products consistent with negotiated Phase One commitments. In the recent aftermath of declining demand for energy products, there has also been pressure on China to purchase U.S. energy products, which are part of China’s Phase One commitments.

For assistance in reviewing product eligibility or with filing exclusion applications, please contact a member of the Customs and International Trade Team: Douglas J. Heffner, Nate B. Bolin, Kathleen M. Murphy, James Sawyer, Randy Rucker, Richard P. Ferrin, Nicolas Guzman, Mollie Sitkowski, Carolyn M. Bethea, Stephen Y. Chen, or Qiusi Y. Newcom.