Update: Section 301 List 3 Tariff Increase

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The Office of the United States Trade Representative (USTR) has posted a Federal Notice regarding the Section 301 List 3 tariffs, which increased from 10% to 25% at 12:01 AM on Friday, May 10th. The Federal Notice states that importers should be prepared for the tariff hike to be imposed on goods that have been:

  1. Entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EST on May 10, 2019
  2. Exported to the United States on or after May 10, 2019

This note is critical as, in the past, tariffs imposed have been governed by the import date. This means that any List 3 goods exported before May 10th will remain subject to the current 10% tariff rate, and anything exported from May 10th and beyond will be subject to the raised rate of 25%.

Additionally, CBP issued CSMS 19-000236 in the later afternoon of May 9th, 2019. This announcement indicated that goods which enter on or after midnight tonight, and were exported prior to May 10th, will be subject to the 10% tariff rate.

Reporting has indicated that CBP’s programming within the Automated Commercial Environment (ACE) is not prepared to handle the change in rate from 10% to 25% on List 3 products. Even so, CBP does indicate that ACE is fully prepared to assess the 25% tariff on List 3 products on cargo sailing from May 10th or later.

These programming setbacks will affect shipments entered for consumption after May 10th, but exported before May 10th. We have found these entries to be automatically dutied at the increased rate of 25%, rather than the 10% as defined by CBP.

It is expected that importers pay the 25% duty for these entries, and then ensure that those entries are reprocessed at the 10% rate, assuming the ACE programming is available within 10 days. If the programming is not available within those 10 days, CBP recommends filing Post Summary Corrections to amend the entries to the proper rate and request a refund.

USTR has indicated that it will outline the exclusion process for Section 301 List 3 Tariffs in the following statement:

“Pursuant to Sections 301(b), 301(c), 304(a), and 307(a) of the Trade Act, the Trade Representative has determined that the Office of the United States Trade Representative (USTR) will establish a process by which interested persons may request that particular products classified within an HTSUS subheading covered by the September 2018 action be excluded from the additional duties. USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request.”

Trans-Border will continue to monitor the situation. If you have any questions, please reach out to Bill Carey, Import Compliance Manager, at bcarey@tbgfs.com or (800) 493-9444.

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