Remaining 301 Exclusions Expiring
A small exclusion set which had been granted for certain goods on Round 1 of the Section 301 tariffs for China origin goods expired on March 25, 2021. This set entered under provisional code 9903.88.06 had been originally set to expire in March of last year but was granted an extension by the USTR.
Like all of the expiring exclusion sets since December, the USTR did not open a comment period for the set indicating they had no intention of granting any further extensions. An extension given to some products under provisional code 9903.88.07, which were granted a one year extension to April 18. 2021, are all but certain to expire as scheduled since no comment period has been announced for this set either. This expiration will only leave small exclusion set granted to COVID relief related products such as masks, sanitizers, and specific medical products active.
The possibility of additional exclusions is uncertain as the new administration is reviewing the 301 tariffs on Chinese goods, as well as the Section 232 tariffs on steel an aluminum before making a decision on amending or eliminating any of the tariffs. With the Biden administration following the Trump administration’s tough approach on China trade policies we do not expect the tariffs to be eliminated any time soon. They may decide to reopen the exclusion process, but only time will tell.
The lawsuit filed in the US Court of International Trade (USCIT), disputing the validity of Rounds 3 and 4A of the Section 301 tariffs, continues to make its way through the legal process. Over the past few months, the Court has set the ground rules and ordered each side to file briefs so as to move forward toward a judgment. In the most recent move, the Biden administration presented an outline of their defense in the case. There is still an opportunity to join the lawsuit if you have paid tariffs imposed under these rounds. The expiration of all of the exclusion sets which had been granted for goods on Rounds 3 and 4A certainly will impact many importers. To join the suit you should contact a competent Customs attorney or reach out to us for a referral.
Please note, this suit has no effect on the exclusions expiring in 2021 as they cover products covered by Round 1 which have not been disputed.
Craft Beverage Modernization Act
Customs will roll out a new enhancement to the Craft Beverage Modernization Act on April 6th. Importers of beer, wine, and spirits may be eligible for a reduced IR tax rate if they can obtain an allotment from the foreign producer. The enhancement will require the filing of additional data at the time of entry to make the claim but it will be considerable improvement in the way Customs collects and audits the taxes due. Information on the CBMA can be found here.
Section 232 in the News
In a ruling on March 10, the USCIT upheld the process for considering exclusions to the Section 232 tariff on steel and aluminum. The dispute centered around the granting of exclusions that do not cover all importers of the same products. The plaintiff argued that this resulted in a violation the Uniformity Clause of the Constitution. In their ruling, the USCIT determined proclamations to the 232 tariffs had provided the Department of Commerce (DOC) with discretion in the exclusion process.
In other news involving the Section 232 tariffs, Sen. Rob Portman of Ohio introduced the Trade and Security Act. This Act would reform Section 232, splitting the process into an investigative phase, led by the Department of Defense (DOD), and a remedy phase, led by the DOC. The Act would require justification from the DOD for the national security basis as required for Section 232 actions. This new process would also grant Congress authority to disallow 232 actions to include all types of products and would require consultation with Congress throughout the process.
The Act is a result of Congressional dissatisfaction of the wide latitude given to an administration to initiate Section 232 actions without the approval of the DOD or consultation with Congress.
Aluminum License Requirement Delayed
The DOC has asked for a further delay in the implementation of the Aluminum Import Monitoring and Analysis System (AIM). This system that will collect and publish data about US imports of aluminum products now has an implementation date of June 28, 2021. The data will be pulled from an import license, which will be required to be filed at the time of entry and which will only be used for data collection purposes. This is the second delay for this program originally slated to be implemented on January 25, 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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