China Product Exclusions: I Want My (301) Money Back

With so much excitement revolving around US-China trade relations, it’s easy to lose track of which duties are effective when, and how they can impact your company. Our customs team has lately been getting a lot of questions from clients regarding 301 tariff rates and what they must do to secure a refund on granted product exclusions. Since the imposition of these tariffs back in 2017, the United States Trade Representative (USTR) has granted more than a thousand tariff exclusions, covering thousands of individual HTS codes. Some exclusions are product specific, while others cover entire subheadings. Though it is now too late to seek an exclusion for products on lists 1 through 3, exclusion requests for List 4a can be made up to January 31, 2020.

There is actually a bit of good news for at least some who have been suffering from the added cost of these tariffs. Importers of goods that were granted exclusions are now eligible for a refund of the tariffs paid as far back as their initial implementation. In other words, you could be owed a lot of money. The catch, however, is that you need to properly ask for it. If your company has products that have been excluded, either by your own request or someone else’s, you need to consider the following and get moving:

• Has your product actually been excluded? Keep in mind that there might be requests still pending review by USTR. You should ensure you have up-to-date information on where your goods sit regarding the tariffs.
• Do your product entries fall within the prescribed time period for a refund? Each tariff list has its own initiation date and product entries landed before those dates will not be eligible for refunds.
• You need to gather entry documentation to support your refund claim. At a minimum this will include your entry summary (Form 7501), packing lists, and possibly images of the goods imported. Depending on the product itself and on the specific exclusion granted, you may need to offer more evidence to CBP to prove your entries are eligible. You will want to include as much relevant evidence as you can with the initial submission of your tariff refund request.
• How many ports did you bring your products through? Your refund requests must be filed with their specific port of entry. If your products came in through many different ports, you will need to prepare and file a request for each port.
• Are the entries liquidated or unliquidated? This will also affect the number of tariff refund requests you will need to consider.

With so many new taxes, tariffs, and duties regularly being implemented, it’s more important than ever that you position yourself to best protect your interests as an importer. These are times to be extra diligent about your money—even if CBP is holding it. Figure out if you are eligible for any refunds—and if so, take the necessary steps right away to secure them.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.