Section 301 Exclusions, Tariffs, and the USTR’s 4-year Review
The last remaining Section 301 exclusions are set to expire next Friday, May 31st. Although this set of exclusions has been extended several times, the recent announcement of an increase on some Section 301 tariffs does provide some indication that these exclusions will be allowed to expire instead of being extended again. We will advise as soon as possible if an extension is announced.
In May of 2022, the USTR (United States Trade Representative) began their required 4-year review of the Section 301 tariffs. The report was finally published on May 18, 2024. The results of the review have spurred action by The White House and the USTR to keep all tariffs in place and take further action by adding or increasing tariffs. The report specifically notes key increases on the following products:
- Battery parts (non-lithium-ion batteries)-Increase rate to 25% in 2024
- Electric vehicles-Increase rate to 100% in 2024
- Facemasks-Increase rate to 25% in 2024
- Lithium-ion electrical vehicle batteries-Increase rate to 25% in 2024
- Lithium-ion non-electrical vehicle batteries-Increase rate to 25% in 2026
- Medical gloves-Increase rate to 25% in 2026
- Natural graphite-Increase rate to 25% in 2026
- Other critical minerals-Increase rate to 25% in 2024
- Permanent magnets-Increase rate to 25% in 2026
- Semiconductors-Increase rate to 50% in 2025
- Ship to shore cranes-Increase rate to 25% in 2024
- Solar cells (whether or not assembled into modules)-Increase rate to 50% in 2024
- Steel and aluminum products-Increase rate to 25% in 2024
- Syringes and needles-Increase rate to 50% in 2024
On May 22, the Federal Register notice from USTR was published. This document officially announces the proposal, provides notice of the public comment period, and outlines more detail on the products which will be subject to this proposal.
Pages 11 –52 of the Federal Register notice are dedicated to reviewing the potentially impacted products: Annex A outlines HTS (Harmonized Tariff Schedule) subheadings proposed to be subject to the tariff increases, and Annex B outlines proposed HTS subheadings which may be part of the exclusion process (and, therefore, potentially avoid additional tariffs) for machinery designed for use in manufacturing. Importers should review these lists carefully to understand if they may be impacted by these changes.
The public docket for comments regarding this proposal will be open from May 29 through June 28. Importers who are concerned about impact should consider participating in the comment process. The electronic portal can be found and this web address: https://comments.ustr.gov
The press release, full 4-year report, White House Fact Sheet, Federal Register Notice are all published and available to view for additional information.
Should you need further information or have any concerns or queries, please contact your local Laufer Customer Service, Customs Brokerage or Sales Representative.
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