At the direction of President Donald Trump and due to recent progress in trade negotiations with China, the Office of the U.S. Trade Representative (USTR) announced that the Section 301 duty rate for certain products imported from China “will remain at 10 percent until further notice.” While this announcement will be formally published in the Federal Register, a draft of the notice is available.
On September 24, 2018, the Trump administration had implemented this 10 percent tariff on $200 billion worth of Chinese products imported into the United States (see Trump and Trade update of September 19, 2018). These tariffs were set to increase to 25 percent on January 1, 2019, but the president and the USTR announced in December 2018 (see Trump and Trade update of December 17, 2018), and again in February 2019 (see Trump and Trade update of February 25, 2019), postponements of their self-imposed deadline for increasing the tariff to 25 percent.
With this announcement, the tariffs on products covered under USTR’s China Section 301 List/Tranche 3 will indefinitely remain at 10 percent. What now remains unresolved is whether the USTR will initiate an exclusion request process for these products while the tariff rate remains at 10 percent. Upon passage of the Consolidated Appropriations Act, 2019, Congress in an accompanying explanatory statement required USTR to initiate an exclusion request process for this third list (see Trump and Trade update of February 19, 2019). In his testimony this week before the House Ways & Means Committee, however, Ambassador Robert Lighthizer indicated that an exclusion request process would be instituted on the third tranche of Chinese products only if those tariffs were increased to 25 percent (see Trump and Trade update of February 28, 2019). In response to this stance by the USTR, members of both the House of Representatives and Senate have recently introduced legislation – the Import Tax Relief Act – specifically requiring that the Trump administration implement a tariff exclusion request process for this list of Chinese products.