June 1 Entry Deadline to Avoid China Tariff Increase; Clarification on FTZ Goods

Monday, May 13, 2019

Sandler, Travis & Rosenberg Trade Report

There is now a June 1 deadline for Chinese-origin goods in more than 5,700 tariff lines to be entered into the U.S. to avoid a tariff increase that took effect May 10.

Following a breakdown in negotiations on a trade agreement with China, the Trump administration increased the Section 301 additional tariff on $200 billion worth of goods imported from China (List 3 goods) from 10 percent to 25 percent for goods that are both (a) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EST on May 10 and (b) exported to the U.S. on or after May 10. U.S. Customs and Border Protection states that such goods must be reported under HTSUS 9903.88.03 or 9903.88.04.

List 3 goods entered on or after May 10 and exported before May 10 were excluded from the tariff increase and were to remain subject to the 10 percent additional tariff. However, CBP and the Office of the U.S. Trade Representative are now stating that such goods must be entered before June 1; otherwise, they will be subject to the 25 percent additional tariff.

In addition, List 3 goods exported before May 10 and entered on or after May 10 and before June 1, which will remain subject to the ten percent tariff, must be reported under new HTSUS 9903.88.09 to distinguish them from goods subject to the 25 percent rate.

USTR also states that List 3 goods admitted into a U.S. foreign-trade zone in privileged foreign status will retain that status and, when entered for consumption, will be subject to the Section 301 additional tariff rate in effect at the time of FTZ admission.

For more information on these changes or other Section 301 tariff issues, please contact customs and trade consultant Tom Gould at (213) 453-0897.

© 2019, Sandler, Travis & Rosenberg, P.A. Originally published in the 05/13/19 issue of the Sandler, Travis & Rosenberg Trade Report. Reprinted by permission.

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