The White House published its official notice that the Section 301 tariffs on Chinese goods have increased as of May 10th. Tariffs on the third tranche of Chinese goods, valued at $200 billion, have increased from 10% to 25%.
The tight deadline for implementation of the increased duties caused confusion. Additionally, the notice published in the Federal Register by the U.S. Trade Representative on May 8th stated that the new duties would be based upon both the date of entry AND the date of export. Including the date of export is a highly unusual requirement as most duties are calculated based upon the rate of duty in effect at the time of entry.
Amid a flurry of conference calls and meetings, US Customs and Border Protection (CBP) issued several CSMS messages providing guidance to the trade and industry. CBP published additional instruction in CSMS 19-000238. The USTR notice has provided a break for importers/exporters with Chinese cargo already “on the water.” The increase in the 301 duties will only apply to goods exported on or after May 10th. A new HTS number has been provided in order to qualify for the lower duty rate. In addition, CBP has included language which will effectively sunset this provision on June 1, 2019.
CSMS 19-000238 stated:
The increase in additional import duties for Chinese goods covered by the September 21, 2018 Federal Register notice, as amended, is now effective on May 10, 2019. Effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, the rate of additional duties on imported articles classified in a subheading covered by the September 21, 2018 Federal Register notice, as amended, will be 25 percent ad valorem.
For subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and exported to the United States on or after May 10, 2019, report the following HTS numbers and duty rates:
HTS: 9903.88.03 and 9903.88.04
Duty Rate: 25 percentFor subject goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, and before June 1, 2019, and exported to the United States before May 10, 2019, report the following HTS number and duty rate:
HTS: 9903.88.09
Duty Rate: 10 percentThe subject imports of China that are entered into the United States on or after June 1, 2019 are subject to the 25 percent rate of additional duty under HTS 9903.88.03 and 9903.88.04.
The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.”
Guidance on applying for tariff exclusions has not yet been published. If you have specific questions about your shipments, please contact Deringer’s Compliance Department.
