ICYMI: Office of the United States Trade Representative opens domestic exclusion process

On October 15, 2024, the Office of the United States Trade Representative (USTR) announced that it is initiating a process for interested parties to request the temporary exclusion of certain machines from Section 301 in its investigation of China’s conduct, policies, and practices related to technology. Transfer, intellectual property and innovation related.

Chapter 301 Investigation Background

In August 2017, the Office of the United States Trade Representative launched an investigation into China’s behaviors, policies and practices in technology transfer, intellectual property and innovation. The agency released a report on its findings in March 2018 and began imposing additional tariffs on Chinese products in four batches in June 2018.

Under the Trade Act of 1974, if USTR receives an appropriate request to continue taking action under Section 301, a four-year review is required. The agency needs to review:

• (A) the effectiveness of (i) such actions and (ii) other actions that may be taken, including actions with respect to other products or services, in achieving the objectives of section 301, and
• (B) The impact of such actions on the U.S. economy, including consumers.

In response to this request, the Office of the U.S. Trade Representative announced the launch of this review in May 2022 and opened a list for interested parties to submit comments.

The agency received nearly 1,500 comments. Throughout 2023 and early 2024, USTR and the Section 301 Committee (the interagency trade policy working committee led by USTR) held multiple meetings with agency experts to consider the comments received.

In May 2024, the Office of the U.S. Trade Representative published a formal proposal in the Federal Register to increase tariffs on specific products in strategic sectors. The agency considered more than 1,100 public comments.

On September 18, 2024, the U.S. Trade Representative announced certain modifications to actions taken in Section 301 investigations, including a subtitle list for consideration of temporary exclusions under the exclusion process for certain machinery used in domestic manufacturing.

Except machinery

This proclamation sets forth the process for requesting the exclusion of certain machinery used in domestic manufacturing. The exclusion process covers certain machinery used in domestic manufacturing that falls under the subheadings of Chapters 84 and 85 of the Harmonized Tariff Schedule of the United States (HTSUS). A list of eligible subtitles is available here.

Submissions for exclusion lists open on October 15, 2024. The deadline to submit an exclusion request is March 31, 2025.

Each request must identify the specific product and provide supporting data and justification for the exclusion. USTR will evaluate each request on a case-by-case basis. USTR will accept exclusion requests on a rolling basis and will periodically announce decisions on pending requests.

What importers should do

Importers can make their voices heard by submitting an exclusion request to the Office of the U.S. Trade Representative. Diaz Trade Law can help prepare filings and help importers understand how these exclusions may impact their business.

For assistance, please contact Diaz Trade Law at 305-456-3830 or info@diaztradelaw.com.

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