The beginning of 2021 kicks off with increased tariffs for importers as most of the Section 301 extended exclusions expired and Congress failed to renew the Generalized System of Preference (GSP) and the Miscellaneous Tariff Bill (MTB). The USTR did; however, extend certain exclusions for COVID-19 related medical products through the end of March and, the BIS granted exclusions for certain products from Section 232 Steel and Aluminum tariffs. The USTR continues Section 301 investigations into Vietnam’s Use of Illegal Timber and Currency Valuations, and CBP will initiate new marking requirements for goods of Israel and Palestine effective in March.
Section 301 Exclusion Extensions Expired
Since December 28, 2018, the U.S. Trade Representative (USTR) has granted over 2,200 product-specific exclusions across the four Section 301 tariff actions taken on over $550 Billion in imports from China. As the exclusions expired, the trade was able to submit comments to request extensions of certain product exclusions. The USTR granted extensions for more than 550 products across all four tranches, most of which expired at the end of 2020, including six extended exclusions from Tranche 1 that expired on December 28th and 531 extended exclusions from Tranches 1, 2, and 3 that expired on December 31, 2020. With the expirations of these exclusions, entries of those goods are subject to the applicable additional Section 301 duties. For more information on the Exclusions granted, see the USTR page here. Additionally, you can search for the status of all exclusions on our website here.
USTR Announced Extension of Section 301 China Tariffs for COVID-19 Related Goods
The U.S. Trade Representative (USTR) did grant further extensions and modifications related to certain COVID-19 related product exclusions from the China Section 301 additional tariffs. The USTR notice states that in light of the rising spread and ongoing efforts to combat COVID-19, the USTR has determined that maintaining or re-imposing additional duties on certain products subject to the action no longer is appropriate and that the application of additional duties to these products could impact U.S. preparedness to address COVID-19. The notice includes four new Provisional HTS#s and covers 99 products at either the 10 Digit HTS level or specific to product descriptions. The extensions are effective January 1, 2021, through March 31, 2021. A full list of extended or modified products are detailed in the USTR notice.
Generalized System of Preference (GSP) Expiration
The Generalized System of Preference (GSP) is a trade preference program that allows for duty-free treatment on thousands of products imported into the U.S. from designated developing countries. Congress has reviewed and renewed the GSP multiple times since enacted in 1975; however, the last renewal expired with a lapse of almost four months. On April 22, 2018, the program was renewed retroactive to January 1, 2018, and expired again on December 31, 2020, without Congress renewal. As with previous lapses in GSP renewal, importers are required to pay the Normal Trade Relations (NTR) duties on entries effective January 1, 2021. GSP’s renewal is retroactive, so once renewed, importers are able to seek refunds of duties paid during any lapse of the GSP program authorization. CBP has provided instructions for the importing community regarding filing requirements starting January 1, 2021.
Miscellaneous Tariff Bill (MTB) Expiration
The Miscellaneous Tariff Bill (MTB) is a law that temporarily reduces or suspends import duties on particular products imported into the United States. The 2018 MTB reduced or eliminated the Normal Trade Relation (NTR) tariffs on approximately 1,700 products from October 13, 2018, through December 31, 2020. Starting in January of 2020, the trade was able to submit comments related to product inclusion in the renewal of the MTB. The International Trade Commission (ITC) submitted its final report to Congress in August; however, due to multiple objections to submitted petitions, Congress did not renew the MTB before its December 31st expiration. As a result, importers are subject to full duty effective January 1, 2021. Although it is expected that the MTB will eventually be renewed, importers will not able to obtain refunds of duties paid during the lapse of the MTB authorization.
Generally Approved Exclusions (GAEs) from Section 232 Tariffs
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce published Federal Register (FR) Notice 85 FR 81060, revising aspects of Commerce’s process for requesting product exclusions from Section 232 measures on steel and aluminum imports, and issued 123 new Section 232 exclusions including 108 GAEs for steel products and 15 GAEs for aluminum products. The GAEs may be used by any importer and have no quantitative limit. Exclusions are effective starting December 29, 2020, and no retroactive relief will be granted. The list of excluded HTS classifications are provided in the FR notice and the chart here.
USTR Section 301 Investigation Related to Vietnam’s Use of Illegal Timber and Currency Manipulation
In October 2020, the U.S. Trade Representative (USTR) announced the initiation of a Section 301 investigation into Vietnam’s Use of Illegal Timber and Vietnam’s Acts, Policies, and Practices Related to Currency Valuation. Virtual Public hearings were held on December 28th and 29th, for the Section 301 investigations. A list of participants and full transcripts are posted to the USTR page.
New Country of Origin Marking Requirements for Goods of Palestine and Israel
U.S. Customs and Border Protection (CBP) published a notice in the December 23, 2020, Federal Register advising the trade of new country of origin marking requirements for products of the West Bank and Gaza. Importers must take special note of the territory or region of production and ensure that goods are marked appropriately (i.e. “Product of Israel”, “Made in West Bank”, “Product of Gaza Strip”, etc.) Goods that are entered or withdrawn from warehouse for consumption into the United States after March 23, 2021, must be marked in accordance with the position set forth in the notice.
Travel Restrictions Extended for Northern and Southern Borders
Customs and Border Protection (CBP) announced that it will extend its travel restrictions at the U.S. land ports of entry of Canada and Mexico through Jan. 21, 2021. The travel bans do not apply to cargo, and exempt crossing the border from Canada or Mexico to work in the U.S.