As global supply chains enter the initial stages of recovery amid fallout from the COVID-19 crisis, the United States Trade Representative (USTR) has lifted punitive tariffs on a new batch of items imported from China.
While the years-long trade war with the country rages on with ample blame-shifting and vitriol, it appears the agency is taking a step to help American companies jump-start their operations by lifting the burden of increased taxes on Chinese products and components.
On Wednesday, the USTR released a Federal Register notice excluding items with 61 different product descriptions from the Section 301, List 4A duties that were implemented last year. Covering a total of 86 separate exclusion requests, the exemptions will apply from Sept. 1, 2019, through Sept. 1, 2020.
Any product that satisfies the description provided in the annex of the Federal Register notice will not face punitive duties—regardless of whether the company using the exclusion was the one to file the request initially. The scope of each exclusion is laid out in the product descriptions published in the annex of the notice.
Items newly excluded from the punitive duties include certain fabric covers or shells, like comforters, pillowcases, backrests and cushions, shells for life jackets made from man-made fibers, down and feathers used for stuffing, and household sewing machines, among other items like baby bottle nipples, shower heads, wallpaper and printed art.
Under an Oct. 24, 2019 notice issued by the USTR, requests for exclusions from the Section 301, List 4A tariffs had to identify products’ physical characteristics and distinguish them from others covered by the $300 billion duty. Requestors were asked to provide the quantity and value of the specific product they had imported from China over the past three years, along with other qualifying information.
The USTR rationalized the exclusions it granted based on three factors: whether the particular product was only available from China and not from producers in the U.S. or third countries; whether the additional duties would cause severe economic harm to the requestor, or other American interests; and whether the product in question was related to Chinese industrial programs like “Made in China 2025,” which encourages the production of high-value products and services.
The USTR said instructions on entry guidance and implementation would be forthcoming, adding that it would continue to issue determinations on pending requests on a “periodic basis.”