Since July 2018, the Trump administration has imposed special duties under Section 301 of the Tariff Act on imports from China, which progressively covered the vast majority of Chinese imports. Duties as high as 25 percent apply to Chinese products. That said, throughout the process of administering its Section 301 action against China, the Trump administration has worked to minimize the impact of tariffs on health-related products. In an additional step toward this goal, the Office of the US Trade Representative ("USTR") announced March 23, 2020, that it would open a new docket to obtain public comments on further modifications to the 301 tariffs on goods from China that may be necessary to help in the fight against COVID-19. This comment process does not replace the current 301 tariff exclusion process, and submissions are limited to specific products subject to the 301 tariff actions and their relevance to the medical response to COVID-19. In response to the comments, USTR could remove products or groups of products in certain Harmonized Tariff Schedule1 (“HTS”) lines from the 301 tariffs entirely. This would be in contrast to exclusion grants, which are time-limited (typically one year) and narrowly tailored to the excluded product.
USTR invites comments from interested persons on products covered by the 301 action that are needed to respond to the COVID-19 outbreak. To facilitate timely consideration of possible modifications, interested persons should submit comments as promptly as possible. Interested persons may also submit responses to comments. To be assured of consideration, any responses to comments should be submitted within three business days after a comment is posted in the docket. USTR will review comments on a rolling basis.
Each comment specifically must identify the particular product of concern and explain precisely how the product relates to the response to the COVID-19 outbreak. For example, the comment may address whether a product is directly used to treat COVID-19 or to limit the outbreak and/or whether the product is used in the production of needed medical care products. Comments may be submitted regarding any product covered by the action in the investigation, regardless of which list the product was initially on or whether the product is subject to a pending or denied exclusion request.
The docket for comments will remain open at least until June 25, 2020, and may be extended. For assistance in submitting comments on products used to combat COVID-19, please contact one of the authors of this Legal Update listed below.
At the direction of the US president, USTR has imposed duties on products of China to obtain the elimination of the unfair and damaging acts, policies, and practices identified in this investigation. The duties have been imposed in four tranches.2
In imposing tariffs on goods from China as part of the Section 301 action, the United States determined to not impose tariffs on certain critical products such as pharmaceuticals, ventilators, oxygen masks, and nebulizers. In addition, over the past year, USTR granted exclusions for a large number of health-related products. Indeed, US imports in 2019 of all critical medical and pharmaceutical products were up over 20 percent since 2017, before Section 301 tariffs were imposed.
1 The Harmonized Tariff Schedule ("HTS") number is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.
2 See 83 FR 28719 (June 20, 2018), 83 FR 40823 (August 16, 2018), 83 FR 47974 (September 21, 2018), as modified by 83 FR 49153 (September 28, 2018), and 84 FR 43304 (August 20, 2019), as modified by 84 FR 69447 and 85 FR 3741.