USTR to terminate certain existing Section 301 Exclusions; extends others for an additional year

On May 24, 2024, the U.S. Trade Representative (“USTR”) announced that 249 products that were eligible for exclusions from 2018 will no longer be eligible for these exclusions, effective June 14, 2024. The original expiration date was May 31, 2024, but USTR granted a grace period in order for U.S. importers to adjust their sourcing and supply chain decisions. USTR, however, did extend the exclusions for 180 products.

If an existing exclusion is covered under Annex C, then exclusions will continue to apply until May 31, 2025. Annex C provides a detailed list of the extended exclusions, which include but are not limited to apparel, industrial materials, industrial machinery, medical equipment, and sewing machines. Any remaining exclusions will not be extended beyond June 14, 2024. Annex D provides a detailed list of exclusions to be terminated at the end of the 14-day transition period. USTR’s decision to terminate the exclusions was due to the comments it received pursuant to its four-year review. Comments included failing to describe efforts to move sourcing out of China, the buyer needing to stay in China for cost purposes, or a domestic producer asserting it could supply the good. In arriving at its decision, USTR considered public comments in connection with the exclusions and its four-year review, the advisory committees’ advice, the Section 301 Committee’s advice, and confidential import data from U.S. Customs and Border Protection.

This is the second notice released by USTR last week regarding modifications to Section 301 measures. For more information regarding Section 301 tariff increases, exclusions for equipment used in domestic manufacturing, and temporary exclusions for solar manufacturing equipment, please see our previous update here.

Husch Blackwell continues to monitor developments relating to Section 301 measures. In the meantime, for guidance or questions relating to U.S. customs and trade laws, companies can contact Husch Blackwell’s International Trade and Supply Chain team.