CBP clarifies what China origin merchandise requires increase from 10% to 25%.

Federal Register notice indicates date of export from May 10th onwards.

Customs and Border Protection today clarified the details of the USTR’s Federal Register notice regarding the increase from 10% to 25% on the third annex (list) of HTS numbers from the Section 301 finding against China.

The FT notice states that the duty is Effective with respect to goods (i) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, AND (ii) exported to the United States on or after May 10, 2019.

The duty will be collected on air and ocean shipments which are exported from China beginning tomorrow. Goods which have already been exported and are in transit by air or sea from today’s date forward are not subject to the increase.

This is a key differentiator. However, as of today, per CBP on a trade call, we received this bit of disturbing news: ACE is not programed to support this so ALL entries with a consumption date of May 10th will be getting applied the new rate of 25% regardless of the date of export.

An announcement will be issued shortly with a new tariff number to resolve this issue but there was no indication of when we will be receiving this new tariff number. Depending on when the new tariff number becomes available and if the entry is still “In Trade Control” (prior to payment of duties) the entry can be updated with the new tariff number allowing the Section 301 rate to return to 10%. If this process becomes available after the Entry is triggered onto Statement it will require a Post Summary Correction (PSC) to obtain refunds of the duties paid at 25% where the date of export is prior to May 10, 2019.