Tariff exclusion extended on 429 imports through December 31st 2023

• September 14, 2023
• Jennifer Clement

In this video by Omar Nashashibi with The Franklin Partnership, you’ll find out why the U.S. Trade Representative recently extended tariff exclusions on 429 imports from China. You’ll also learn why the timing of the new expiration date could impact the broader policy review underway.

Video: Section 301 Updates

What was extended

On September 5^th, the Office of the U.S. Trade Representative posted a notice in the Federal Register that it was extending 429 product exclusions from September 30^th through December 31^st of this year. A product exclusion is granted when a company, or many companies, request that USTR temporarily suspend tariffs on an imported product from China.  There are currently two different levels of tariff, depending on the product: either 25% or 7.5%.

Products impacted

The list of 429 exclusions extended through the end of the year are the same that USTR has extended in the past, including for packaging containers, single-use cold packs, and hot packs, several single use medical items, hand pumps, microscopes, blood pressure monitors, among others. Most of these are commonly referred to as the COVID-product-related exclusions.

What was not extended

In the early days of the exclusion process under the Trump administration, USTR approved thousands of exclusion requests. All but 429 exclusions have lapsed, meaning the 25% or 7.5% tariffs are back in place on over 10,000 Chinese imports. The action taken on September 5^th extends the last remaining exclusions, keeping them from expiring on September 30^th. Those 429 products are the only imports, out of more than 10,000 from China, that do not currently face a tariff entering the U.S.

Will tariffs continue? TBD

Since taking office, the Biden administration has kept the 301 tariffs on China but has not restarted a process for companies to request an exclusion. The delay of the last of the expiring exclusions to the end of the year gives the Biden administration more time to consider their next steps. Do they restart an exclusion process? Is it open for all 10,000 products subject to the 301 tariffs, or does USTR make some products off limits and only allow importers to request an exclusion for a limited set of goods. These are the questions many importers and domestic manufacturers are looking forward to having answered, hopefully later this year.

The delay may also give USTR more time to complete its required 4-year review of the Section 301 tariff policy. Sources indicated that they had hoped to release their report with possible recommendations for next steps on the tariffs this fall.

The Bottom Line

This change may impact manufacturers and distributors in one of three ways: 

1. If you are an importer of one of these 429 imports from China, then you have another 90 days without paying the tariffs.
2. If you are an importer who has secured an exclusion in past, this likely means you have to wait a few more months to find out if USTR will restart a process.
3. If you are a manufacturer in the U.S. of a product competing with China, you can expect tariffs to remain likely through the end of the year. 

We will keep you posted if we hear more, but for now, seems like USTR has bought itself more time to make a decision on their tariff exclusion policy for the tariffs on China.

Need help understanding the economic impact on your business?  Contact CLA. 

CLA has contracted with Franklin Partnership and Omar Nashashibi to provide the content for article.

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