The office of U.S. Trade Representative has published instructions for companies that want to apply for tariff exclusions on List 3 imports from China, which include home furnishings products.
It’s not a simple process.
USTR will open a web portal (http://exclusions.USTR.gov) on June 30 to file exclusion requests. The deadline to submit an exclusion request will be Sept. 30, 2019. Exclusions will be retroactive to Sept. 24, 2018, when 10 percent tariffs were enacted, and are good for one year. Tariffs on List 3 products recently were increased to 25 percent.
According to the notice, the exclusion request must include the following:
- The 10-digit subheading of the Harmonized Tariff Schedule of the United States (HTSUS) applicable to the particular product requested for exclusion. Different models classified under different 8-digit or 10-digit subheadings are considered different products and require separate exclusion requests.
- Product name and a detailed description of the product. A detailed description of the product includes, but is not limited to, its physical characteristics (e.g., dimensions, weight, material composition, etc.). Requesters may submit a range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with similar product characteristics or attributes. Goods with different SKUs, model numbers or sizes are not necessarily different products.
- The product’s function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading.
A requester must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data on the annual quantity and value of the Chinese-origin product, domestic product and third-country product the requester purchased, in 2017, 2018 and the first quarter of 2019. Requesters must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018 and the first quarter of 2019. For imports sold as final products, requesters must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product accounted for.
For the rationale for the requested exclusion, each requester must address the following:
- Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries. The requester must provide an explanation if the product is not available outside of China or the requester is not sure of the product availability.
- Whether the requester has attempted to source the product from the United States or third countries.
- Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the requester or other U.S. interests.
- Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
Once a request is posted, other parties will have 14 days to respond to it. Then the requester will have an additional seven days to answer the response.
List 3 imports from China are worth an estimated $200 billion annually.