Section 301 China Tariffs | Q&A


  1. Where did these Section 301 tariffs come from?

On May 29, 2018, President Trump announced that the US Trade Representative (USTR) shall publish – by June 15th 2018 –  the imposition of an additional duty of 25% on approximately $34 billion worth of Chinese imports containing industrially significant technologies, including those related to the “Made in China 2025” industrial policy. The USTR investigation determined that China’s technology transfer, intellectual property, and innovation policies and practices are “unreasonable and discriminatory, and burden U.S. commerce”

Section 301 of the Trade Act of 1974 provides the Executive Branch with the authority to respond to unfair, unreasonable, or discriminatory trade practices and gives the USTR the ability to take action to compel another country to eliminate the offending act, policy, or practice, with the president’s approval. Notably, Section 301 allows the United States to respond not only to actions specifically related to trade in goods and services but in any pertinent area of relations with the other country.


  1. What are the additional tariff rates identified by the USTR for these Sec 301 tariffs?

The list of products identified by the USTR will be subject to an additional 25% duty upon entry. These rates are independent of and in addition to any normal duties and/or Anti-Dumping or Countervailing Duties which may also apply.


  1. When did these tariffs take effect?

Per the USTR, these additional tariffs took effect on shipments arriving or withdrawn from a warehouse starting at 12:01 AM EDT on Friday, 06 July 2018.


  1. How long will these tariffs last?

The announcement does not specify an end date for the application of the Sec 301 tariffs. Therefore, importers should expect these Section 301 tariffs to last for the foreseeable future.


  1. Will there be an expansion of the Sec 301 China tariffs?

The USTR is reviewing a secondary list of 284 tariffs representing an additional $16 billion dollars of imports from China. (List attached – Sec 301 List 2.pdf). The President has also directed the USTR to identify an additional $200 to $400 billion worth or imported merchandise as a result of retaliatory tariffs by China. This secondary list of products would be subject to an additional 10% to 25% duty as well.

CBP will be holding hearings on this second list on 29 Jul 2018


  1. How will CBP keep track of the Sec 301 imported items?

A new tariff number will be established in Chapter 99 of the HTS to be declared along with each of the affected tariff numbers. The entry process will require listing both the original tariff item and HTS 990.88.01. The 25% plus the appropriate duty rates will be applied.

If brokers do not declare HTS 9903.88.01 with their customs declaration for products subject to Sec 301 tariffs, CBP will reject the customs entry with a message reminding them to declare these Sec 301 duties.


  1. Does the country of export have an impact on whether the Sec 301 tariffs apply?

Per CBP, the Country of Origin is the determining factor on whether or not the Sec 301 tariffs apply, not the Country of Export. Therefore, CBP may require additional documentation from importers necessary to administer the new tariff provisions and/or exclusions or exemptions.

  1. What are the implications for cargo entered into a Foreign Trade Zone (FTZ)?

Any article that is admitted into a US FTZ on or after 12:01 AM EDT on 06 Jun 2018, may only be admitted as Privileged Foreign Status as defined in 19 CFR 146.41, and, upon entry for consumption, will be subject to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading, including Sec 301 duties and anti-dumping and/or countervailing duties if applicable.

Any article that was admitted into a US FTZ under Privileged Foreign Status as defined in 19 CFR 146.41, prior to 12:01 AM EDT on 06 Jul 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings, including Sec 301 duties and anti-dumping and/or countervailing duties if applicable.


  1. Which products are covered under the Sec 301 tariffs?

See attached list: these items are subject to an additional 25% upon entry


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