The President signed on Friday, February 15, 2019, the Consolidated Appropriations Act, 2019, an appropriations bill to keep the government fully open. In the Joint Explanatory Statement (JES) from the House Appropriations Committee that accompanied the bill, Congress directs the Office of the U.S. Trade Representative (USTR) to create an exclusion process for the third tranche of Section 301 tariffs on China “no later than 30 days after the enactment of this Act, following the same procedures as those in rounds 1 and 2….”  This language does not tie a round 3 exclusion process to the level of the tariff (10% or 25%).  Significantly, though, this language in the JES was not included as part of the bill signed by the President and is therefore not legally binding.  Nevertheless, the JES expresses Congress’ intent and indicates that Congress expects USTR to begin an exclusion process covering goods on List 3 no later than March 17, 2019.

Before that date, the JES also indicates that USTR is expected to consult with the House Ways and Means Committee and the Senate Finance Committee regarding the nature and timing of the exclusion process and report back to these committees on the status of the round 3 exclusion process by March 17, 2019.

The third tranche of China Section 301 tariffs covers approximately $200 billion worth of goods, currently at a 10% duty rate. China and the U.S. are currently involved in trade negotiations and President Trump has declared that if they do not come to a deal by March 1, 2019 (or such later time as he may permit) then the List 3 tariffs will increase to 25%.

We will continue to monitor this situation. For more information on the Section 301 tariffs on China, please contact Nithya NagarajanCortney MorganJeffrey NeeleyRobert Stang, or Beau Jackson.

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Photo of Robert Stang Robert Stang

Bob focuses his practice on customs and international trade law. He brings 30 years of experience to a wide range of issues that affect inbound and outbound goods, including tariff classification, valuation, country of origin marking matters, free trade agreements, and special trade programs. He also has extensive customs compliance experience and regularly assists importers facing U.S. Customs and Border Protection (CBP) audits, penalties, seizures, redelivery notices and other agency enforcement activities. Bob works with importers and exporters proactively to achieve cost savings and structure programs that meet CBP “reasonable care” requirements. He also handles supply chain security issues, including Customs-Trade Partnership Against Terrorism (C-TPAT) enrollment, verification and annual reviews.

Photo of Nithya Nagarajan Nithya Nagarajan

Nithya’s extensive background in U.S. trade issues spans 25 years and includes various roles in a number of federal government agencies, including the Department of Commerce Department of Justice, and the U.S. Court of International Trade. She assists clients with administrative and regulatory actions before the Department of Commerce, International Trade Commission and U.S. Customs and Border Protection (CBP) and defends clients in appeals before the Court of International Trade, Court of Appeals for the Federal Circuit, NAFTA panels and the World Trade Organization. In addition to her body of U.S. experience, Nithya is also well-versed in international trade issues in China and India.

Photo of Katherine Stubblefield Katherine Stubblefield

 

Katherine is an International Trade Analyst who supports clients in international trade relief and regulation matters, including antidumping investigations, countervailing duties, export controls, economic sanctions, international trade agreements and preference programs.