Federal officials taking comments on reinstating certain tariff exclusions

A lawyer with Michael Best Strategies says companies that import from China would benefit from submitting comments as federal officials consider reinstatements of certain tariff exclusions.

“This is an invaluable opportunity for Wisconsin companies who import from China to be able to engage in,” said Sarah Helton, a partner with the Madison-based consulting firm, in a recent interview. “Having the opportunity to engage in the process to get the exclusion from that tariff is significant.”

Ambassador Katherine Tai, the U.S. trade representative, announced earlier this month that the agency would begin a targeted exclusion process for tariffs on certain products. The agency began accepting comments Oct. 12 through an online portal regarding the reinstatement of 549 exclusions, and the window to submit comments will be open until Dec. 1.

According to Ngosong Fonkem, a trade compliance lawyer with the Chicago-based law firm Page Fura, the new process is limited in scope to imported products that had previously been granted an exclusions, and only those that were extended through the end of 2020.

“As with past exclusion processes, the USTR proposal would permit importers, many of whom are Wisconsin businesses to apply for relief from Section 301 duties on certain imports from China that range from 7.5 percent to 25 percent,” Fonkem told WisBusiness.com in an email.

As the office of the USTR evaluates reinstating these exclusions, officials will consider whether the product or a comparable one is available from a U.S. supplier or another country other than China, domestic capacity for U.S. production, global supply chain changes since September 2018 related to the product or industry, and other factors.

Denise Bode, who heads the federal policy practice at Michael Best Strategies, said “a number of our clients” are impacted by the tariffs. Helton added the tariffs are “an inhibitor” of growth in the Midwest’s manufacturing sector. They explained the Michael Best team has filed thousands of exclusion applications over the years, including under prior presidential administrations. Bode says a large portion of those were for Wisconsin-based companies “or those that do business” in the state.

Along with the factors listed above, Bode said the USTR will take into consideration if China has subsidized any of the products on the list in order to better compete with specific U.S. products or industries. In prior successful exclusion applications, she said the firm was able to make the case that the tariff would result in “severe economic harm” to the importing company in question.

“We hope that those that were subject to exemptions before and have the opportunity to apply do apply,” Helton said. “We estimate that if people don’t weigh in asking for the exclusions, they’re going to lose that opportunity … That’s why it’s so important to be aware this is happening and to engage in it.”

See more details, including the full list of eligible products: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/october/ustr-requests-comments-reinstatement-targeted-potential-exclusions-products-china-subject-section

–By Alex Moe