Section 301 Exclusion Process to be Restarted by Biden Administration

October 5, 2021

The Office of the U.S. Trade Representative (USTR) announced on October 4, 2021, that the Biden Administration intends to soften its approach on punitive tariffs against the People’s Republic of China (PRC).

The press release states, “Today, we are announcing the initial steps we will take to re-align our trade policies towards the PRC around our priorities:

First, we will discuss with China its performance under the Phase One Agreement. China made commitments that do benefit certain American industries, including agriculture that we must enforce. President Biden will continue to promote our economic interests – and build confidence for American industry.
Second, while pursuing Phase One enforcement, we will restart our targeted tariff exclusions process to mitigate the effects of certain Section 301 tariffs that raised costs on Americans.
Third, we continue to have serious concerns with the PRC that were not addressed in the Phase One deal, specifically related to its state-centered and non-market trade practices including Beijing’s non-market policies and practices that distort competition by propping up state-owned enterprises, limiting market access, and other coercive and predatory practices in trade and technology.”

What does this mean for importers?

Once the USTR defines the process to apply for an exclusion, you may wish to make an application in your company’s name.
Exclusions are not limited to a specific company. You may take advantage of an exclusion approved under the application of another importer.
Be aware of exclusions previously granted, as they will likely be reconsidered.
Exclusions have in the past been implemented retroactively.
You may wish to file a request for an extension of liquidation of your entries to allow more time to file Post Summary Corrections for refunds should your products qualify under a new exclusion.
If your entries have already been liquidated, it may be in your interest to file a protective protest to “stop the clock” until the exclusion process is restarted and the USTR has had time to review new applications.

It remains to be seen how the USTR will oversee the process and whether the administration will instruct the Trade Representative to be more conservative when granting exclusions. As always, if you have any questions, please reach out to Deringer’s Compliance Department.