In brief

What happened?

The office of the United States Trade Representative (USTR) announced in a press release issued December 26, 2023, that it has further extended, through May 31, 2024, the 352 reinstated Section 301 exclusions and 77 COVID-related Section 301 exclusions in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The extension excludes in-scope products from additional duties on products of Chinese origin. These exclusions previously were scheduled to expire on December 31, 2023. The USTR at the same time announced the opening of a docket for public comments on existing exclusions on January 22, 2024, that will close on February 21, 2024.

Additional details on the further extension of the exclusions may be found in the Federal Register Notice (FRN).

On December 29, 2023, in Cargo Systems Messaging Service (CSMS) # 58869963, the USTR provided guidance on the further extension of the exclusions. The guidance consists of instructions for importers, brokers, and filers on submitting entries to US Customs and Border Protection (CBP) containing granted exclusions from the Section 301 measures.

Why is it relevant?

According to the USTR press release, “The extension will enable the orderly review of the exclusions consistent with statutory factors and objectives to identify in which cases additional time would enable shifts in sourcing to the United States or third countries. The extension will also facilitate the alignment of further decisions on these exclusions with the ongoing four-year review.”

Action to consider

Businesses that would be affected by the possible elimination of the exclusions should consider submitting comments to the USTR when the docket for public comments opens on January 22 and before the docket closes on February 21. The docket may be accessed here. Additionally, taxpayers affected by the Section 301 tariffs on Chinese imports should continue to monitor USTR actions in this matter.

In detail

Guidance provided

According to the CSMS, instructions for importers, brokers, and filers on submitting import entries to CBP that contain products covered by granted exclusions by the USTR from the Section 301 measures are as follows:

US notes 20(ttt)(i), 20(ttt)(ii), 20(ttt)(iii), 20(ttt)(iv), 20(uuu)(i), 20(uuu)(ii), 20(uuu)(iii), and 20(uuu)(iv) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) are modified by deleting ‘‘January 1, 2024,’’ and by inserting ‘‘June 1, 2024,’’ with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on January 1, 2024, and before 11:59 p.m. eastern daylight time on May 31, 2024.
Importers shall not submit the corresponding Chapter 99 HTSUS classification for the Section 301 duties when HTSUS 9903.88.67 or HTSUS 9903.88.68 is submitted.
- Imported goods that have been granted a product exclusion from the Section 301 measures and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 FRNs, but instead are subject to the FTZ provisions in 19 CFR part 146.
To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers should file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation if within the protest filing timeframe. The latest guidance on the process for submitting retroactive claims for product exclusions to CBP is found in CSMS 42566154. Specifically, if importers enter Chinese goods during the gap period of January 1 through January 3, 2024, subject to the extended exclusions under HTSUS 9903.88.67 or HTSUS 9903.88.68, and pay Section 301 tariffs, importers should file a PSC on or after January 4, 2024, to obtain a refund of tariffs paid.
Importers, brokers, and filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise.

For prior coverage, see PwC Tax Insight, United States extends some COVID-related China tariff exclusions, September 20, 2023.