On April 26, 2021, the U.S. Trade Representative (USTR) published a notice in the Federal Register correcting a very narrow technical issue affecting certain merchandise covered by certain China Section 301 List 3 product exclusions.
As background, on September 24, 2018, the USTR imposed a 10% duty on China-origin merchandise provided on List 3. On May 10, 2019, this 10% duty was increased to 25%, but certain List 3 merchandise exported from China before May 10, 2019 and entered into the United States before June 15, 2019 remained subject to the lower 10% duty. To differentiate between merchandise exported and entered within this period and subject to the lower 10% duty rate, the USTR created a unique HTSUS subheading 9903.88.09 classification for this merchandise. However, when issuing the various rounds of China Section 301 List 3 product exclusions between August 2019 and May 2020, the USTR failed to provide for merchandise subject to the lower 10% duty rate under HTSUS subheading 9903.88.09.
The USTR notice corrects this issue by clarifying that merchandise covered by a China Section 301 List 3 product exclusion is not subject to China Section 301 List 3 duties if it was exported before May 15, 2019 and entered before June 15, 2019 under HTSUS subheading 9903.88.09.