In my latest blog post, I review the recent updates on tariff exclusions related to U.S.-Chinese trade and Sections 301 and 232 of the U.S. Federal Register.
Goods for Consumption
At the beginning of last year, the U.S. Trade Representative reinstated 352 goods entered or withdrawn from warehouses for consumption on these exclusions. They expired on Dec. 31, 2022.
On Dec 23, 2022, the U.S. Trade Representative decided to extend all exclusions previously reinstated under heading 9903.88.67. The extension applies to goods that entered for consumption, or were withdrawn from warehouses for consumption, on or after 12:01 a.m. EST on January 1, 2023, and before 11:59 p.m. EST on September 30, 2023. Effective on January 1, 2023, the article description of heading 9903.88.67 of the HTSUS is modified by deleting ‘‘December 31, 2022,’’ and inserting ‘‘September 30, 2023,’’ in its place.
The extension was based on the review that was conducted by U.S. Trade Representative which concluded that:
“(A) the effectiveness in achieving the objectives of Section 301 of (i) such action, and (ii) other actions that could be taken (including actions against other products or services
(B) the effects of such actions on the United States economy, including consumers.”
One of the factors to reinstate goods was some excluded products are only available from China and whether or not reinstating the exclusions would result in serous economic harm or disrupt other U.S. interests. As a reminder, the reinstated exclusions apply for any product that falls into the description in the products exclusion. The scope of each exclusion is based on the ten digit Tariff Codes.
Medical Care Products
It has been nearly four years now since the Covid pandemic started in 2019. When Covid hit the United States, the U.S. Trade Representative modified Section 301 China’s policy and practices related to technology transfer, intellectual property, and innovation by excluding additional duties from certain medical-care products needed to address the pandemic. This was initially granted in Dec. 2020, and eventually extended few of these exclusions.
Currently, the Covid exclusions covers 81 medical care items, and they were scheduled to expire on Feb. 23, 2023. These medical care items originally would apply to Section 301 China Tariff under heading 9903.88.01 & 9903.88.02 at additional 25% or under heading 9903.88.15 at additional duty 7.5% if the exclusion wasn’t granted. On Feb. 3, 2022, the Office of U.S. Trade Representative provided a notice and requested the public provide their input on whether or not to further extend particular exclusions. This notice also announces an interim 75-day extension of the exclusions, through May 15, 2023. This would allow for consideration of public comments.
The Exempt Medical Products:
(1) Disposable plastic filters of a kind suitable for filtering and dehumidifying a patient’s breath in a medical device such as a gas analyzer (described in statistical reporting number 8421.39.8090 prior to January 27, 2022; described in statistical reporting number 8421.39.0190 effective January 27, 2022)
(2) S-band and X-band linear accelerators designed for use in radiation surgery or radiation therapy equipment (described in statistical reporting number 8543.10.0000)
(3) Disposable electrocardiograph (ECG) electrodes (described in statistical reporting number 9018.11.9000)
(4) Ultrasonic scanning apparatus, each having dimensions not exceeding 122 cm by 77 cm by 127 cm, whether or not presented with transducer (described in statistical reporting number 9018.12.0000)
(5) Blood pressure monitors suitable for use by medical professionals (described in statistical reporting number 9018.19.9530)
(6) Digital peak flow meters suitable for use by medical professionals (described in statistical reporting number 9018.19.9550)
(7) Fingertip pulse oximeters suitable for use by medical professionals (described in statistical reporting number 9018.19.9550)
(8) Bismuth germinate crystals with set dimensional and surface finish requirements and used as a detection element in Positron Emission Tomography (PET) detectors (described in statistical reporting number 9018.19.9560)
(9) Magnetic resonance imaging (“MRI”) patient enclosure devices, each incorporating radio frequency and gradient coils (described in statistical reporting number 9018.19.9560)
(10) Parts and accessories of capnography monitors (described in statistical reporting number 9018.19.9560)
Section 232 Product Exclusion
On March 19, 2018, the Department of Commerce provided the Federal Register with guidelines on how to request a product be excluded from the Presidential Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum in to the United States. This authority was provided under section 232 of the Trade Expansion Act of 1962.
On Sept. 3, 2019, the CBP requested importers to provide information by email for them to review and approve Section 232 exclusions in Automated Commercial Environment (ACE). Importers no longer need to provide this information to activate Section 232 exclusions. CBP can now directly process the approved Section 232 exclusions based on weekly lists that are provided by the U.S. Department Of Commerce. Importers can now check CBP.gov every Friday to determine if a Section 232 approved product exclusion is now active in ACE. As a reminder, the CBP will only process the exclusion of products when the name of the Importer of Record is on the original exclusion submitted to DOC and it matches the Importer of Record name registered in ACE.
Exclusions that were approved by the U.S. Department Of Commerce are retroactive to the date the request for the exclusion was posted for public comment on the 232 Exclusion Portal.
