On July 10, 2020, the Office of the United States Trade Representative (“USTR”) announced an additional 25% Section 301 duties on various handbag and cosmetic products from France effective January 6, 2021.

These retaliatory duties will be imposed in response to France’s planned Digital Services Tax (“DST”), which the USTR determined is discriminatory and unreasonably burdens U.S. technology companies. Implementation of the additional duties will be delayed for 180 days to allow for further negotiations between the two countries that may resolve this matter. The USTR will publish notice if it decides to implement the duties prior to January 6, 2021.

The USTR originally considered duties of up to 100% on 63 tariff subheadings, including Champagne, cheeses, and cookware. After reviewing comments and holding hearings, the USTR assessed the Section 301 duties at 25% and limited the products subject to the duties to the 21 subheadings below covering handbags and cosmetics with an estimated trade value of $1.3 billion in 2019. The USTR will monitor the effects of this trade action and continued negotiations with France and may make modifications.

There are also currently pending USTR investigations on the DST adopted or proposed by Austria, Brazil, the Czech Republic, European Union, India, Indonesia, Italy, Spain, Turkey, and the United Kingdom, which may also result in the assessment of Section 301 duties.

We are available to answer any questions and discuss strategies to respond to and mitigate the effects of these USTR actions.

Should you have any questions or require additional information, please do not hesitate to contact our office.

Products From France Subject to Sec. 301 Duties