Understanding Section 301 (China Tariffs) & Exclusions

Nearly all goods imported from China are now subject to additional tariffs at either 15 percent or 25 percent—and rising. Many companies are scrambling to find ways to cut costs, pass increases through to customers, and avoid the tariffs altogether.

One valuable method to mitigate the impact of tariffs on your business is leveraging exclusions. There are particular HTS code and product description exclusions granted by the USTR. In fact, there are more than 3,000 of them. The additional duties do not apply to these products, and, even better, you may be eligible to go back and claim a refund on duties paid since the implementation date.

The challenge comes with trying to stay current on ever-changing information and updates. Many importers miss the deadlines to apply for an exclusion or aren’t aware that an exclusion has been granted on their products. It’s important to remember that an exclusion can be used on your customs entries even if you didn’t apply for it.

Summary of tariffs, dates, and exclusions

As reported by JOC.com and The New York Times, on October 11, U.S. and Chinese negotiators worked out the details of the first phase of a trade deal that calls for China to buy $40 to $50 billion worth of U.S. agricultural products and for the U.S. to cancel its plan to increase tariffs from 25 percent to 30 percent on over $250 billion in Chinese imports. The original date of the increase was October 1, and it would have affected building products, vacuum cleaners, lighting and plumbing fixtures, handbags, luggage, vinyl flooring, semiconductors, printed circuit boards, and chemicals.

Developing story: On January 15th, 2020 Phase 1 of the US-China Trade Agreement was signed by both parties. Here is a link to our briefing on the deal. Included in Phase 1 is a rollback of Tariffs on List 4A from 15 to 7.5% on February 14th, 2020. Lists 1-3 remain unchanged at this time, but may be addressed in the next phase of negotiations.

Round/List 1

Effective date: July 6, 2018

General commodities covered (partial list): many manufacturing inputs, such as boat motors, aircraft parts, parts for dishwashers, elevators, ball bearings, clutches, touch screens, backlight LEDs, machinery, and other manufacturing equipment (i.e. grinding machines, molds, machine tooling, welding machines, etc).

List of HTS codes impacted


Requests closed October 9, 2018

Exclusions announced in multiple rounds.

List of granted exclusions

Note: All exclusions granted are retroactive to July 6, 2018, and remain in place for one year after the exclusion determination is published – the first of which expire on December 28, 2019

Duty rate: 25%

Round/List 2

Effective date: August 23, 2018
General commodities covered: chemicals, plastics, resins, semiconductors, cargo containers, tractors, and railway equipment.

List of HTS codes impacted


Requests closed December 18, 2018

List of granted exclusions

All exclusions granted are retroactive to Aug. 23, 2018, and remain in place for one year after the exclusion determination is published.

Duty rate: 25%

Round/List 3

Effective date: September 24, 2018

General commodities covered: food, chemicals, pesticides, minerals, fabrics, construction materials, handbags, luggage, car parts, appliances, machines, televisions, items made from steel and aluminum, batteries, semiconductor assemblies, furniture, and more.

List of HTS codes impacted


Requests closed September 30, 2019

List of granted exclusions

All exclusions granted will be retroactive to Sept. 24, 2018, and expire August 7, 2020.

Duty rate: 25%
Increased from 10% on May 10, 2019

Round/List 4A

Effective date: September 1, 2019

General commodities covered: consumer products such as televisions, clothing in chapters 6101-6117, clothing in chapters 6201-6217, footwear in chapters 6401-6406, camping and sporting equipment, table linens, bedding, dishes, batteries, snowmobiles, mopeds, books, cameras, musical instruments, blinds, food, beverages, and chemicals.

List of HTS codes impacted

List of materials removed from list 4

Requests letters were due by January 31, 2020.

List of granted exclusions

As part of the US-China Phase One deal the tariffs associated with List 4A would roll back from 15% to 7.5%, set to be implemented on February 14, 2020 (updated as of January 23, 2020).

Round/List 4B

Effective date: On hold as of December 13, 2019.

What can you do right now?

In addition to keeping track of exclusions and filing timely applications for them, there are things you can do to manage the effect tariffs have on your business:


Make sure you have an Automated Clearinghouse (ACH) account with U.S. Customs. And further, make sure you pay through Periodic Monthly Statement (PMS). A PMS can help you leverage a float for up to 45 days, helping you manage cash flow.

Negotiate with your suppliers

The tariffs affect more than your business. By adding new pressure to your arrangements, they also affect your suppliers’ businesses. That means it’s in their interests to help you continue to do business with them. Work out new production schedules that put shipments ahead of higher tariff deadlines. Ask about excess inventory. And most important, work with them to share the impact of the tariffs, so that they absorb some of the burden.

Evaluate your prices

What’s your strategy for raising prices? How will you communicate this to your customers? How quickly can you do it? How effective would a two-tier system be, one price that includes the tariffs and one that doesn’t? And how do long-term contracts preclude you from raising prices, and how can you renegotiate them?

Contact Us

For more than 70 years, Laufer Group International Ltd. has maintained a complete logistics and service platform that helps importers improve their businesses. Our experience and expertise can help you navigate the shifting tides of today’s global shipping industry, from day-to-day logistics to the complex issues raised by higher tariffs. To learn more and to get the guidance you need, contact us at inquiry@laufer.com.

Every attempt has been made to ensure these lists are accurate. For up to date information, or if you have issues or questions, contact us.

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