Second tranche of additional China 301 duties begin August 23rd.

The Office of the United States Trade Representative announced on Tuesday that they have completed their work on the second proposed list of additional HTS numbers that will be subject to 25% duties from China. Unlike the first list which saw 818 out of an initially proposed 1300+ HTS numbers be put into effect, over 98% of the HTS numbers on the initially published list made it to the final list after comments and adjudication.

Beginning August 23rd, Customs and Border Protection will begin to collect 25% in additional duty on 279 of the originally proposed 284 numbers. This list includes $16 billion of products ranging from chemicals to plastic hoses, fertilizer spreaders, motors and more. As with the first list, importers will be able to write to request an exclusion and if one is granted to another company, they can make entry with that exclusion as well. The instructions for this process are expected to be identical to the first list, but have not yet been published. It is anticipated that exclusions will be very difficult to obtain and we strongly suggest that you speak to your Zarach representative about it in greater detail.

Unfazed by the US decision, China announced that correspondingly they would also impose sanctions beginning at 12:01 PM local time on a list of American products as well.

There are two things that warrant monitoring as this seemingly endless escalation continues and all importers should be wary.

  1. There are signs that while the comment period closes in early September for the third proposed list including handbags, bicycles and other retail-level consumer items, the proposed 10% may not be sufficient and the USTR may revise that list to 25%.
  2. Importers who find themselves caught in having to pay these additional duties will find that their continuous bonds are reaching their sufficiency at a much quicker rate than they calculated for the life of the bond. We are working with importers but also caution others to be aware that if they continue to import goods subject to these additional duties, they will need to seek much larger Customs bonds which will require additional data and financial instruments of collateral to guarantee them.

Edward J. Zarach & Associates is continuing to monitor these changes which impact importers of goods from China. We are also experienced in helping companies who are facing additional duties owing to the steel and aluminum duties that have been imposed as well. To learn more, contact us today.