On January 11, the office of the US Trade Representative provided a written response to senators indicating that no exemptions will be allowed on the third tranche of Section 301 tariffs unless they increase from 10 to 25 percent. Approximately 5,700 classification lines of products, accounting for $200 billion in Chinese imports, are affected by the tariff.

If the Chinese do not respond to the demands of the US, the tariff will increase on March 2, 2019. If the increase takes place, the USTR will open up the exemption process to this tranche.

The letter from US Trade Representative Robert Lighthizer also provided an update regarding the application of Section 301 tariffs on goods admitted to foreign trade zones (FTZs). The letter affirms that the USTR will continue classifying products that fall on a Section 301 tranche and use an FTZ as Chinese origin when the highest-value imported component of the finished product is Chinese-origin.

Deringer will continue to monitor and provide updates on the Section 301 tariffs. Please email questions to compliance@anderinger.com.