Section 301, GSP, and Customs Updates
Many Section 301 Exclusions Set to Expire
On December 31, 2020, ten exclusion sets to the Section 301 tariffs for China origin goods will expire and the addition tariffs will once again be collected as of January 1 2021. The provisional numbers affected by these expirations are 9903.88.08, 9903.88.10, 9903.88.50, 9903.88.52, 9903.88.54, 9903.88.56, 9903.88.57, 9903.00.58, 9903.88.60 & 9903.88.61. These provisional numbers will no longer be active and the products will be entered under the provision number assigned to the Section 301 round they were originally included under.
Goods currently eligible for an exclusion under 9903.88.57 will once again fall under a 7.5% additional tariff. The remainder will be assessed a 25% additional tariff starting in January.
The only remaining exclusions for goods covered by the Section 301 tariffs are a small number of products granted an exclusion extension under 9903.88.07. These have an expiration date of April 18, 2021.
In a departure from the earlier expirations, the USTR did not offer a comment period allowing importers to make their case for an extension to the exclusions. The incoming administration will have the decision on whether the USTR will offer a chance to apply for an extension for the exclusions expiring in April.
The legal action filed in the Court of International Trade which seeks to invalidate the Section 301 tariffs implemented on Rounds 3 and 4 continues. If your company has paid significate 301 tariffs on products covered by these rounds and you have not yet spoken with a Customs Attorney we encourage you to do so. A bill filed in Congress (H.R. 7665) which would reinstate all of the 301 exclusions in place on April of 2020 has made little progress at this point and may well not get to a vote in the House. Industry groups continue to lobby for reinstatement of the exclusions as well. The Biden camp has indicated they will not eliminate the additional tariffs in effect for China, at least in the short-term.
GSP to Expire?
As of today, the Generalized System of Preferences (GSP) has not been renewed. This popular, long running program is scheduled to expire on December 31, 2020, unless an extension is passed by Congress and signed into law by the President. However, the USTR is confident of the renewal, although perhaps retroactive, since they issued a significant list of modifications to take effect on December 30.
Customs’ ACE system has been updated with the annual January 1 changes to the HTS codes, so you may see minor changes in classification numbers on your entries. Most fee structure changes are made at the beginning of the fiscal year for the Federal Government in October, so the current Merchandise Processing and Harbor Maintenance Fees are already set. Some items such as IR taxes that are collected by Customs run by the calendar year.
From those of us at CVI, we wish you the happiest of holiday seasons and look we forward to a better 2021.
Director of Compliance & Customs Services
Need a refresher on tariff rounds and exclusions?
CVI has a free, complete guide to EVERYTHING you need to know for tariff rounds and exclusions, including:
- HTS Code
- Publish Dates
- Exclusion provision number per set list and round
- Effective & Extended Expiration Dates
The CVI Exclusion Guide 2020 provides you with a link to original USTR exclusion announcements with a breakdown of each excluded product.
Please let us know if you have any questions. We will be regularly updating this document via our website. Check it out here!
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Meet one of CVI’s Customs Brokerage & Compliance experts, Sam McClure:
Sam serves as Director, Compliance and Customs Services for CVI. He serves as CVI’s corporate compliance officer and is responsible for overseeing all aspects of our Customs related services, including growth.
Sam started his career in 1977 with Waters Shipping Company in Charlotte, NC. He began as a document runner, soon becoming a leader in operations and customer service for the branch. Sam, along with Linda Masten, founded Central Carolina Shipping Inc. in 1983 as an independent Customs Brokerage firm where he served as Vice President for 26 years. Sam and Linda grew Central Carolina into a successful and highly respected member of the Carolinas trade community. When Charlotte opened their local chapter of the IFFCBA Sam was part of the organizing group and he headed the Customs committee for several years. Sam obtained his Customs Brokers License in 1984 and remained with Central Carolina until the company was acquired by CVI in 2009.
At CVI, Sam has held several positions in both the operations and sales departments. As an expert in U.S. Customs regulations, Sam is often called upon on to provide guidance to importers on Customs compliance issues. He makes regular presentations on matters related to importation and broader regulatory compliance.
– Sam McClure, LCB, Director of Compliance & Customs Services, CVI
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