In accordance with the direction of the President, the U.S. Trade Representative (Trade Representative) has determined to modify the action being taken in this Section 301 investigation by increasing the rate of additional duty from 10 percent to 25 percent for the products of China covered by the September 2018 action in this investigation. The Trade Representative has further determined to establish a process by which interested persons may request that particular products classified within a tariff subheading covered by the September 2018 action be excluded from the additional duties.
The rate of additional duty will increase to 25 percent with respect to products covered by the September 2018 action on May 10, 2019.
Unlike past Section 301 notices of this type, this contains an “on water” exception.
The annex to the notice reads the effective date includes goods (i) entered for consumption, or withdrawn from warehouses for consumption, on or after 12:01 a.m. eastern daylight time on May 10, and (ii) exported to the United States on or after May 10.
Thus, goods that were exported to the United States and were in transit before May 10 are not subject to this action.
However, as of today, per CBP on a trade call, we received this bit of disturbing news: ACE is not programmed to support this so ALL entries with a consumption date of May 10th will be getting applied the new rate of 25% regardless of the date of export.
An announcement will be issued shortly with a new tariff number to resolve this issue but there was no indication of when we will be receiving this new tariff number. Depending on when the new tariff number becomes available and if the entry is still “In Trade Control” (prior to payment of duties) the entry can be updated with the new tariff number allowing the Section 301 rate to return to 10%. If this process becomes available after the Entry is triggered onto Statement it will require a Post Summary Correction (PSC) to obtain refunds of the duties paid at 25% where the date of export is prior to May 10, 2019, with the refund coming directly from customs.