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U.S. updated filing requirements, drawbacks; tariffs on imports from China

U.S. updated filing requirements; imports from China

U.S. Customs and Border Protection (CBP) today issued a release with updated filing requirements for Chapter 98 entries and information on drawback eligibility relating to the additional import duties being imposed, beginning 6 July 2018, pursuant to the “Section 301” action on products imported from China.

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Read CSMS #18-000419 (3 July 2018)

Background

The United States previously determined that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation were “actionable” under Section 301 of the Trade Act of 1974, and thus proposed the imposition of additional import duties on Chinese products. The final list of Chinese products subject to the imposition of additional import duties was released in June 2018. The additional import duties for Chinese goods will be effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM EST on 6 July 2018.

A final list of products covered by the Section 301 action is based on the eight-digit Harmonized Tariff Schedule of the United States (HTSUS) subheadings. The list comprises over 800 eight-digit HTSUS numbers. Any article classified in a subheading covered by this list that is a product of China would be subject to a 25% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading.

Filing requirements, drawbacks

In addition to reporting the Chapters 1-97 HTSUS classification of the imported merchandise, importers must also report the 9903.88.01 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy, as follows:

9903.88.01: 25% ad valorem additional duty for articles the product of China

 

The Section 301 duties currently only apply to products of China, and are based on the country of origin, not country of export. 

  • The rates of duty imposed by subheading 9903.88.01 will not apply to products for which entry is properly claimed under a heading or subheading in Chapter 98.
  • When submitting an entry in which a heading or subheading in Chapter 98 is claimed on merchandise covered by the Section 301 remedy, a filer must first report subheading 9903.88.01, followed by the applicable Chapter 98 subheading, and the Chapter 1-97 HTSUS classification for the commodity being imported.
  • Section 301 duties are eligible for duty drawback.
  • Products from China subject to the Section 301 trade remedy that are eligible for special tariff treatment under General Note 3(c)(i) to the HTSUS will be subject to the additional 25% ad valorem rate of duty imposed by heading 9903.88.01. 
  • Any listed product (except those eligible for admission under “domestic status”) subject to the additional duty imposed under the Section 301 action and that is admitted into a U.S. foreign trade zone on or after 12:01 am EST on 6 July 2018, only may be admitted as “privileged foreign status” and will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.
  • Additional guidance is to be published concerning the product exclusion process.

For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich

Partner, Global Practice Leader

T: 312-665-1022

E: dzuvich@kpmg.com

 

Andy Siciliano

Partner, National Practice Leader

T: 631-425-6057

E: asiciliano@kpmg.com

 

Irina Vaysfeld

Principal

T: 212-872-2973

E: ivaysfeld@kpmg.com

 

Robert Waldrop

Principal

T: 212-954-8117 

E: rwaldrop@kpmg.com

 

Christopher Young

Principal

T: 312-665-3229

E: christopheryoung@kpmg.com

 

George Zaharatos

Principal

T: 404-222-3292

E: gzaharatos@kpmg.com

John L. McLoughlin

Principal, East Coast Leader

T: 267-256-2614

E: jlmcloughlin@kpmg.com

 

Luis (Lou) Abad

Principal, WNT

T: 212-954-3094

E: labad@kpmg.com

 

Amie Ahanchian

Managing Director

T: 202-533-3247

E: aahanchian@kpmg.com

 

Gisele Belotto

Managing Director

T: 305-913-2779

E: gbelotto@kpmg.com

 

Andy Doornaert

Managing Director

T: 313-230-3080

E: adoornaert@kpmg.com

 

Jessica Libby

Managing Director

T: 612-305-5533

E: jlibby@kpmg.com 

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