Even though only 21 percent of the nearly 10,800 Section 301 exclusion requests have been adjudicated, Miller & Chevalier is drawing some qualified conclusions about what worked. The Office of the U.S. Trade Representative approved exclusions to the 25 percent tariff on 984 products from the initial $34 billion in Chinese imports targeted (see 1812240010). The two most important factors, the law firm said in an analysis published Jan. 2, are specificity around why the import could not be sourced outside China and concrete explanations on how the additional duties would hurt the requester.

The “procedures” of the federal Foreign Trade Zones board chaired by Commerce and Treasury “generally align” with established rules and regulations for approving or denying applications for storing goods in FTZs but can do a better job of more fully documenting their decisions, a GAO report said. Customs and trade experts have described FTZs as being among several good “deferral mechanisms” for companies seeking to mitigate the higher costs of Trade Act Section 301 tariffs on Chinese imports because companies that store foreign goods in FTZs don't pay duties on them unless the goods are imported or consumed (see 1809240011). The FTZ program "offers a range of benefits" to encourage companies "to maintain and expand their operations" in the U.S., said GAO. As of July, 262 FTZs were approved for operation, it said. GAO audited 59 applications to store goods in FTZs between July 2017 and November 2018, and found 49 were approved, the rest denied “for reasons such as new or complex policy issues that required further review,” it said. Staff evaluating the applications correctly “collected and considered comments” from the public, industry specialists and Customs and Border Protection and made recommendations to the board whether to authorize the requests, said GAO. The rules require consideration of a “number of criteria” for evaluating applications, but staff didn't always “document consideration of all required criteria,” and the procedures “do not require” them to do so, it said. Without such documentation, the board “lacks an institutional record that all required criteria were considered and also lacks assurance that its decisions comply with U.S. trade and tariff law and public policy,” it said. It recommended the board write documentation requirements into its procedures.

The “procedures” of the federal Foreign Trade Zones board chaired by Commerce and Treasury “generally align” with established rules and regulations for approving or denying applications for storing goods in FTZs but can do a better job of more fully documenting their decisions, a GAO report said. Customs and trade experts have described FTZs as being among several good “deferral mechanisms” for companies seeking to mitigate the higher costs of Trade Act Section 301 tariffs on Chinese imports because companies that store foreign goods in FTZs don't pay duties on them unless the goods are imported or consumed (see 1809240011). The FTZ program "offers a range of benefits" to encourage companies "to maintain and expand their operations" in the U.S., said GAO. As of July, 262 FTZs were approved for operation, it said. GAO audited 59 applications to store goods in FTZs between July 2017 and November 2018, and found 49 were approved, the rest denied “for reasons such as new or complex policy issues that required further review,” it said. Staff evaluating the applications correctly “collected and considered comments” from the public, industry specialists and Customs and Border Protection and made recommendations to the board whether to authorize the requests, said GAO. The rules require consideration of a “number of criteria” for evaluating applications, but staff didn't always “document consideration of all required criteria,” and the procedures “do not require” them to do so, it said. Without such documentation, the board “lacks an institutional record that all required criteria were considered and also lacks assurance that its decisions comply with U.S. trade and tariff law and public policy,” it said. It recommended the board write documentation requirements into its procedures.

International Trade Today is providing readers with some of the top stories for Dec. 24-28 in case they were missed.

CBP won't be able to implement the first group of Section 301 tariff exclusions until the impasse over government funding is resolved, the agency said in CSMS message. While the Office of the U.S. Trade Representative issued a notice on the exclusions (see 1812240010), CBP is unable to update ACE to reflect the exclusions, CBP said. "At the conclusion of the government funding hiatus, CBP will issue instructions on entry guidance and implementation," the agency said.

Producers who have complaints about countries' protection of intellectual property rights, or have complaints about market access based on IP protection, should, by Feb. 7, submit written comments and/or their intent to appear at a public hearing on the matter, the Office of the U.S. Trade Representative said in a notice. The hearing by the Special 301 Subcommittee will be held Feb. 27 at the USTR's office building. The Special 301 Report, informed by testimony and submissions, will be published at the end of April, the agency said.

The Office of the U.S Trade Representative issued its first list of product exclusions from the 25 percent Trade Act Section 301 tariffs on Chinese imports, granting full or partial exemptions for nearly two dozen 10-digit Harmonized Tariff Schedule subheadings, said a notice posted Friday at the agency’s website. The exclusions apply retroactively to July 6, the date the first tranche of tariffs took effect, and will remain in effect until one year after the USTR’s notice is published in the Federal Register.

President Donald Trump issued a presidential proclamation Dec. 21 making changes to the tariff schedule that are set to be implemented Jan. 1. Among other changes, the proclamation formally ends African Growth and Opportunity Act benefits for Mauritania (see 1811050019), and amends the tariff schedule to clarify duty-free treatment for certain goods of Nepal under the Trade Facilitation and Trade Enforcement Act of 2015. Other technical and conforming changes are also being made related to the tariff treatment of guayaberas from Panama, the tariff-rate quota on tobacco products, implementation of Section 301 tariffs on China and the Miscellaneous Tariff Bill. The International Trade Commission will now amend the tariff schedule to implement the changes, though the agency is operating in a limited capacity due to the ongoing federal government shutdown.

The Office of the U.S Trade Representative issued its first list of product exclusions from the 25 percent Trade Act Section 301 tariffs on Chinese imports, granting full or partial exemptions for nearly two dozen 10-digit Harmonized Tariff Schedule subheadings, said a notice posted Friday at the agency’s website. The exclusions apply retroactively to July 6, the date the first tranche of tariffs took effect, and will remain in effect until one year after the USTR’s notice is published in the Federal Register.

The first set of products excluded from the initial tranche of Section 301 tariffs (see 1812240010) is hoped to be the beginning of good news from the Office of the U.S. Trade Representative, said David Cohen, a customs lawyer with Sandler Travis. "We hope that this is the first notification of many exclusions to be granted," Cohen said in an email. "Many of the articles subject to the tariff are those which are not related to the stated intent of the Section 301 action which is safeguarding technology and apply, in some cases, to products that utilize decades old commonly available technology. Moreover, the breadth of the coverage unfortunately sweeps in many products that in no way help China achieve her 2025 goals; for example a hand wrench is included. We hope the Administration continues to review the pending petitions and permit many other products to enter the US commerce free from the Section 301 duties."