On June 20, 2018, the U.S. Trade Representative published in the Federal Register a notice of action, request for public comment and notice of a public hearing [Docket Number USTR-2018-0018] concerning the proposed determination of action pursuant to section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.

The notice confirms that an additional duty of 25% will be imposed on articles classified in the tariff subheadings included in Annex A of the notice that are entered for consumption, or withdrawn from warehouse for consumption, on or after July 6, 2018. The notice creates a new Chapter 99 subheading, 9903.88.01, for entry purposes (entries of articles classified in the tariff subheadings identified in Annex A have to use the new Chapter 99 classification as a secondary classification, so the additional 25% duty can be assessed), a new U.S. note 20 to subchapter Ill of chapter 99, and addresses foreign trade zone admissions. Annex B to the notice contains the same list of tariff subheadings, with unofficial descriptions of the types of products covered in each subheading.

Any product listed in Annex A, except any product that is eligible for admission under ‘domestic status’ as defined in 19 C.F.R. 146.43, which is subject to the additional duty imposed by this determination, and that is admitted into a U.S. foreign trade zone on or after 12:01 a.m. eastern daylight time on July 6, 2018, only may be admitted as ‘privileged foreign status’ as defined in 19 C.F.R. 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.

The notice also sets the schedule for providing comments on the second list of articles proposed to be assessed an additional 25% duty. This is the list of 284 tariff classifications the interagency Section 301 Committee identified as benefitting from China’s industrial policies, including Made in China 2025 (Annex C to the notice). These 284 tariff classifications represent approximately $16 billion worth of imports from China.

The rates of duty imposed by heading 9903.88.01 will not apply to products for which entry is properly claimed under a heading or subheading in chapter 98. Products of China that are provided for in heading 9903.88.01 and classified in one of the subheadings enumerated in U.S. note 20(b) to subchapter Ill shall continue to be subject to antidumping, countervailing, or other duties, fees, exactions and charges that apply to such products, as well as to the additional 25% ad valorem rate of duty imposed by heading 9903.88.01.

The public comment schedule is as follows:

  • June 29, 2018 – deadline to file a notice requesting to provide testimony at the public hearing
  • July 23, 2018 – written comments due
  • July 24, 2018 – public hearing at the U.S. International Trade Commission
  • July 31, 2018 – rebuttal, post-hearing comments due

This notice does not provide the specifics for the product petition exclusion process referenced in the President’s June 15, 2018, statement. Instead, this notice says that the details of the product petition exclusion process will be included in a future Federal Register notice.