Businesses importing from China may get a second chance to take advantage of Section 301 tariff exclusions, which were designed to provide financial relief, adding up to thousands or even millions of dollars in savings for companies, on some products being imported to the U.S. from China. At the start of 2021, a majority of these tariff product exclusions expired, increasing duty fees for shippers, and adding strain in an elevated supply chain cost environment. Now, these tariff savings are back on the table for consideration.
USTR Comment Period is Open Until December 1
About one week remains to petition the United States Trade Representative (USTR) to reinstate 549 of these expired product exclusions, which would introduce retroactive refund potential for shippers. If the USTR rules to reinstate the refunds next month, shippers would be able to file for refunds as far back as October 15. In that two-month period alone, there is potential for millions of dollars in retroactive duty refunds, and that doesn’t include the future savings these exclusions could provide shippers who are likely not going to see supply chain congestion and shipping cost relief even as 2022 begins.
When considering whether to reinstate the exclusions, the USTR will focus primarily on factors such as changes in the global supply chain, domestic product availability and effort spent on domestic sourcing by importers, and whether there is adequate domestic capacity for producing the product in question in the U.S.
What This Means for Shippers
Not only does this targeted tariff exclusion process provide a financial opportunity for shippers now, but it also introduces the potential for additional exclusions to come to light in the future, according to recent statements by the USTR. However, many current trade measures are not expected to change soon. The office has acknowledged that trade reform between the U.S. and China is ongoing as the relationship evolves with the new administration.
Still, the potential for reinstated refunds next month presents an opportunity for shippers to better understand their financial position, discover what they may be able to reclaim, and determine what impact that may have on their shipping operations.
To help provide shippers with an information advantage, C.H. Robinson has developed an automated U.S. Tariff Search Tool. The tool streamlines what can otherwise be hours of tedious tariff data analysis. Shippers can input their organization’s HTS codes and receive information about their eligibility under the tariff exclusions as well as better understand their total landed cost analysis – including their costs to import, recovering duties previously paid, and reducing their duty exposure via trade agreements.
Shippers can submit comments to the USTR at this webpage: Home (ustr.gov) and get more information on the impact this could have on the trade community here: Recent Trade & Tariff Perspectives | C.H. Robinson (chrobinson.com).