By: Arthur Bodek

The Office of the U.S. Trade Representative (“USTR”) has announced that, effective October 15, 2024, it is opening a portal for interested parties to use to request exclusions from the China 301 tariffs for certain machinery of HTS Chapters 84 & 85 used in domestic manufacturing.  The specific items are limited to those listed in Annex E of the USTR’s previous notice published in the Federal Register of September 18, 2024.

By way of background, as part of its four-year review of the China 301 tariffs, the USTR took several actions, including:

1. Imposing additional, or increasing existing, China 301 duties on certain products in strategic sectors;
2. Proposing increases in tariff rates for certain tungsten products, wafers, and polysilicon;
3. Excluding from China 301 duties certain solar manufacturing equipment;
4. Identifying a list of subheadings for certain machinery used in domestic manufacturing that would be eligible for consideration under an exclusion process.

The new USTR notice sets forth the procedures for the machinery exclusion process identified immediately above. Further background on recent China 301 actions by the USTR can be found here and here.

Any exclusion request must include the following information (and may be supported by additional relevant materials):

• The 10-digit HTSUS subheading (if no 10-digit breakout, use the 8-digit breakout + ‘‘00’’).
• A complete and detailed description of the manufacturing equipment. For example:
  • physical characteristics (e.g., dimensions, weight, material composition, etc.).
  • whether the manufacturing equipment is designed to function in or with a particular machine (application).
  • principal use.
  • unit value (providing a range if necessary).
  • Any unique physical features that distinguish it from other manufacturing equipment within the same 10-digit HTSUS subheading.
• Whether the manufacturing equipment is subject to an antidumping or countervailing duty order.
• Whether the manufacturing equipment will be used for domestic manufacturing, how it will be used, and in what manufacturing sector.
• If applicable, documents showing grant funding from, or grant application to, a federal investment program related to the domestic manufacturing, such as the Inflation Reduction Act (IRA), CHIPS and Science Act, Build America Buy America (BABA), and Rural Energy for America Program (REAP).
• Whether the manufacturing equipment (or comparable equipment) is available from U.S. or third country sources (and details of any attempts to obtain the equipment from these alternate sources).
• Whether the requester has purchased the item from a U.S. / third country source in the past five years and why it is no longer available from such source.
• Whether the manufacturing equipment is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

The exclusion request portal will remain open through March 31, 2025, at 11:59 p.m. EST. Interested parties may file responses to individual exclusion requests within 30 days after the exclusion request is posted on the USTR’s online portal. The original requester may file a rebuttal to such a response by the later of 15 days after the posting of the response, or 15 days after the closing of the 30-day response period.

Please do not hesitate to contact any of our attorneys to discuss the impact of the above exclusion action on your company or for assistance in preparing filings with the USTR.