In another installment, Trade Risk Guaranty covers the recent news and announcements about the Section 301 and Section 232 tariffs. The presentation covers the following: - Recap of Import Tariffs - Section 232: Autos and Auto Parts - Section 301: Negotiations with China - The Exclusion Process DOWNLOAD THE HTSUS LOOKUP : https://traderiskguaranty.com/section-301-tariff-htsus-lookup/ Watch the webinar here: https://youtu.be/b7NSwDZFQEg

1. Exclusion Details, Tariff Increase Deadlines, & More
MARCH 2019 UPDATE:
SECTION 301 & 232

2. Nick Esposito
Business Development Manager
Bozeman, Montana
Trade Risk Guaranty Brokerage Services, LLC
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Bozeman, Montana
Strix Full Service Brokerage & Self-Filing Software
gregg@strixsmart.com
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6. TODAY’S WEBINAR TOPICS
Recap on Import Tariffs
Section 232: Autos & Auto Parts
Section 301: Negotiations with China
The Exclusion Process

7. RECAP ON
IMPORT TARIFFS

8. RECAP ON SECTION 232
LEGISLATION COMMODITY COUNTRY OF ORIGIN ADDITIONAL
TARIFF
EFFECTIVE
DATE
SECTION
232
Steel
All countries of origin are subject to this tariff except
Argentina, Australia, Brazil, and South Korea.
Argentina, Brazil, and South Korea are covered by Section
232 Absolute Quotas.
25% June 1, 2018
Aluminum
All countries of origin are subject to this tariff except
Argentina and Australia.
Argentina is covered by Section 232 Absolute Quotas.
All imports from South Korea should use non-quota entry
type codes.
10% June 1, 2018
Automobiles & Auto
Parts
Under Review
The DOC reported their findings to the President in FEB 2019.
Uranium Under Review
A conclusion to the DOC’s investigation can be expected sometime in APRIL 2019.

9. RECAP ON SECTION 301
LEGISLATION COMMODITY COUNTRY OF ORIGIN ADDITIONAL
TARIFF
EFFECTIVE
DATE
SECTION
301
List 1 China 25% July 6, 2018
List 2 China 25% August 23, 2018
List 3 China 10% (increase to
25% delayed)
September 24,
2018
List 4 China Still Being Publically Discussed
All import tariffs that have been implemented do not have an expiration date and
are in place until determined otherwise.

10. SECTION 301 –
HTSUS CODE LOOKUP
A free tool from Trade Risk Guaranty

11. SECTION 232
Imported Autos & Auto Parts

12. SECTION 232: AUTO & AUTO PARTS
In May 2018, the DOC self-initiated an investigation to
determine whether imports of automobiles (including
SUVs, vans, and light trucks) and auto parts are harming
U.S. national security.
• The DOC had up to 270 days to conclude its investigation. If their
determination is affirmative the president has the authority to adjust
imports, including through the use of tariffs and quotas.
• Any actions the president may elect to take, would be imposed
within 15 days of the president’s determination to act.

13. SECTION 232: AUTO & AUTO PARTS
In November 2018, General Motors announced that it was
closing car assembly plants in Ohio, Michigan and
Maryland.
• The President threatened to impose a 25% tariff on imported cars in
retaliation.
• "the reason that the small truck business in the U.S. is such a go to
favorite is that, for many years, Tariffs of 25% have been put on small
trucks coming into our country. It is called the 'chicken tax' If we did
that with cars coming in, many more cars would be built here....."

14. SECTION 232: AUTO & AUTO PARTS
The President has threatened tariffs of up to 25% but has
been opposed by automakers and others.
• Although Trump committed to leave the EU out as long as bilateral
trade talks are making progress, the EU has reportedly prepared
$23 billion in retaliatory sanctions if the restrictions are imposed.
• Side letters to the U.S.-Mexico-Canada Agreement exempt 2.6
million vehicles from each of those partner countries from any
potential Section 232 measures.

15. SECTION 232: AUTO & AUTO PARTS
The DOC delivered their report to the President on
February 17th.
• The contents of the report have not been made public at this time.
• Many experts believe that the report will likely recommend tariffs. If
it does, it is expected the President will impose them.
• He has 90 days to act on the report's findings.
• Any actions the president may elect to take, would be imposed
within 15 days of the president’s determination to act.

16. SECTION 232: AUTO & AUTO PARTS
In January, two senators re-introduced legislation that
would delay the imposition of Section 232 tariffs on
imported autos and auto parts.
• The Automotive Jobs Act was reintroduced by Senators Doug
Jones (Democrat, Alabama) and Lamar Alexander (Republican,
Tennessee)
• "would require the International Trade Commission (ITC) to conduct
a comprehensive study of the well-being, health and vitality of the
United States automotive industry before tariffs could be applied,"

17. SECTION 301
Negotiations with China

18. SECTION 301: DISCUSSIONS WITH CHINA
The increase from a 10% to 25% additional tariff has been
delayed from its original March 1st start date.
• Trump cited “substantial progress” in bilateral talks between the U.S.
and China.

19. SECTION 301: DISCUSSIONS WITH CHINA
No new date has been set for an increase from 10% to 25%
on items on List 3.
• A late March meeting between President Trump and Chinese
President Xi Jinping is scheduled to take place at Trump’s Mar-a-
Lago golf club in Palm Beach, Florida.
• If a deal is reached, the U.S. could roll back tariffs on at least $200
billion in Chinese goods while China could remove or cut industry-
specific levies like those on autos.

20. SECTION 301: DISCUSSIONS WITH CHINA
However, the U.S. wants the ability to re-implement tariffs
on Chinese goods if talks fail on enforcement mechanisms
on intellectual property theft and related matters.
• China’s is expected to pass a new foreign investment law changing
equity ownership rules, and potentially have language about state-
owned enterprise subsidies and forced tech transfers.
• The President has stated that his administration is "not in a rush
whatsoever. It's got to be the right deal". .

21. SECTION 301: DISCUSSIONS WITH CHINA
Two potential outcomes…
• A failure of negotiations – This outcome would likely take at least
until April and would most likely lead to tariffs on around $200 billion
of imports (List 3) being increased to 25% straight away.
• A success of negotiations – All additional duties would most likely
be removed altogether. However, the threat of a "snap-back" in
duties if either side is not delivering on their commitments will
remain for the longer term.

22. WHAT IS THE RESULT?
A Few Outcomes

23. CHINA PROPOSES MORE U.S. IMPORTS
China is proposing that it could buy an additional $30 billion
a year of U.S. agricultural products including soybeans,
corn, and wheat as part of a possible trade deal.

24. CHINA PROPOSES MORE U.S. IMPORTS
“China will say what needs to be said to get a deal, but the
key component will be in the verification and enforcement,”
- Arlan Suderman, chief commodities economist for INTL FCStone

25. SHIPPING RATES BETWEEN U.S. & CHINA
Shipping rates between the two countries has skyrocketed
by more than 100%.
• Likely as a result of Importers
attempting to bring in as
much cargo as possible
before List 3 shifts from 10%
to 25%.

26. APPLE MOVING PRODUCTION
According to a new report, Apple’s high-end iPhone
production is moving to India in 2019.
• Tariffs on iPhones could drive Apple’s prices up significantly.
• This move could help Apple limit the impact of the trade war
between the United States and China has on the company.
• This move also helps Apple improve its relations in the critically
important Indian market.

27. GSP PROGRAM CHANGES
The United States intends to terminate India’s and Turkey’s
designations as beneficiary developing countries under the
Generalized System of Preferences (GSP) program.
• India’s termination from GSP follows its failure to provide the United
States with assurances that it will provide equitable and reasonable
access to its markets in numerous sectors.
• Turkey’s termination from GSP follows a finding that it is sufficiently
economically developed and should no longer benefit from
preferential market access to the United States market.

28. GSP PROGRAM CHANGES
By statute, these changes may not take effect until at least
60 days after the notifications to Congress and the
governments of India and Turkey.
• The changes will be enacted by a Presidential Proclamation.

29. GSP PROGRAM: U.S. AND INDIA
The U.S. launched an eligibility review of India’s compliance
with the GSP market access criterion in April 2018.
• India has implemented a wide array of trade barriers that create
serious negative effects on United States commerce.
• U.S. dairy imports into India aren’t being allowed for religious
reasons
• Despite intensive engagement, India has failed to take the necessary
steps to meet the GSP criterion.

30. GSP PROGRAM: U.S. AND INDIA
India was the largest beneficiary of the GSP scheme, with
about $5.6 billion worth of its imports qualifying.
• Many of these may lose a crucial degree of competitiveness as a
consequence of this decision.
• Manufacturing that’s moving away from China is able to go
elsewhere, such as Bangladesh, Vietnam, etc.
• These nations have seen exports grow while India’s have
stagnated.

31. GSP PROGRAM: U.S. AND TURKEY
The United States designated Turkey as a GSP beneficiary
developing country in 1975.
• An increase in Gross National Income (GNI) per capita, declining
poverty rates, and export diversification, by trading partner and by
sector, are evidence of Turkey’s higher level of economic
development.

32. EXCLUSION PROCESS
Updates & Dates

33. SECTION 301 EXCLUSION REFERENCE
LEGISLATION COMMODITY COUNTRY
OF ORIGIN
ADDITIONAL
TARIFF
EFFECTIVE
DATE
EXCLUSION DUE
DATE
EXCLUSIONS
ANNOUNCED
SECTION
301
List 1 China 25% July 6, 2018 Oct. 9, 2018 December 28, 2018
List 2 China 25% August 23, 2018 December 18, 2018 N/A
List 3 China 10% (increase to
25% delayed)
September 24,
2018
The USTR will report to Congress on the
nature & timing of the exclusion process no
later than March 17, 2019.

34. On December 28, 2018, the USTR released an official
announcement with a list of exclusions granted for List 1.
• These exclusions are effective for goods entered on or after 12:01
a.m. eastern daylight time on July 6, 2018 (they are retroactive).
• They will remain in place for one year after the date of publication in
the Federal Register of the exclusion determination.
• They are available for any product that fits the product description
regardless of if the importer was the one to file the exclusion.
SECTION 301: LIST 1 EXCLUSIONS

35. The List 1 exclusions include 7 existing 10-digit HTSUS
subheadings & 24 specified product descriptions
(described in 14 statistical reporting numbers).
Read through all the exclusions here:
https://traderiskguaranty.com/media/1446/trg-section-301-list-1-
exclusions.pdf
SECTION 301: LIST 1 EXCLUSIONS

36. Feb. 15, Congress directed the USTR to establish an
exclusion process for goods on List 3.
• This process will be “following the same procedures as those in
rounds 1 and 2.”
• USTR must report to Congress on the nature and timing of this
process no later than March 17.
SECTION 301: LIST 3 EXCLUSION PROCESS

37. PREPARE TO FILE A REQUEST
FOR EXCLUSION
https://www.regulations.gov/
Although there is not an official Docket # to submit the List 3
exclusion to at this time, you can begin compiling the information
needed.
LIST DOCKET # LINK
List 1 USTR-2018-0025 https://www.regulations.gov/doc
ket?D=USTR-2018-0025
List 2 USTR-2018-0032 https://www.regulations.gov/doc
ket?D=USTR-2018-0032

38. To prepare for an exclusion request from List 3, we can look
over the process to request an exclusion to List 2.
• Congress has directed the USTR to establish the process “following
the same procedures as those in rounds 1 and 2.”
• Therefore we can look over the requirements for filing an exclusion
to List 2.
EXCLUSION PROCESS : WHAT WE KNOW

39. EXCLUSION PROCESS : WHAT WE KNOW
https://www.regulations.gov/document?D=USTR-2018-0032-0003

40. EXCLUSION PROCESS : WHAT WE KNOW
https://www.regulations.gov/document?D=USTR-2018-0032-0003

41. EXCLUSION PROCESS : WHAT WE KNOW
https://www.regulations.gov/document?D=USTR-2018-0032-0003

42. EXCLUSION PROCESS : WHAT WE KNOW
https://www.regulations.gov/document?D=USTR-2018-0032-0003

43. EXCLUSION PROCESS : WHAT WE KNOW
https://www.regulations.gov/document?D=USTR-2018-0032-0003

44. The White House has granted about 1 in 4 requests for
exclusions to Section 232 steel tariffs.
• As of Feb. 11th, 66,001 steel exclusion requests were filed, 21,468
steel exclusion decisions have been posted, and 16,093 were
approved.
• 9,548 aluminum exclusion requests have been filed and 2,824
exclusions have been granted.
SECTION 232: EXCLUSIONS

45. SECTION 232: EXCLUSIONS
https://www.regulations.gov/
There is no time limit for exclusion requests, but objections to
exclusion requests must be submitted 30 days after the exclusion
requests are posted on regulations.gov.
SECTION 232 DOCKET # LINK
Steel BIS-2018-0006 https://www.regulations.gov/doc
ket?D=BIS-2018-0006
Aluminum BIS-2018-0002 https://www.regulations.gov/doc
ket?D=BIS-2018-0002

46. Approved exclusions are made only for the product
requested imported by the individual or organization
making the request, unless the Commerce Department
approves a broader exclusion. Subsequent requests by
other individuals or enterprises may be made for the same
product type through new supplements.
SECTION 232: EXCLUSIONS

47. WHAT CAN YOU DO?

48. STAY INFORMED VIA A
RELIABLE NEWS OUTLET
Setup an email alert through your most
trusted news source so that you can be
updated as soon as news breaks
To read the official documents from the USTR:
https://ustr.gov/issue-areas/enforcement/section-301-investigations/record-section-301-investigation

49. CUSTOMS & BORDER
PROTECTION PARTNERSHIP
CBP enforces the regulations set in place by other
officials within the government.

50. CONSULTATION AVAILABLE
WITH STRIX
For more in-depth guidance on
an individual basis

51. COVERED IN TODAY’S WEBINAR
Recap on Import Tariffs
Section 232: Autos & Auto Parts
Section 301: Negotiations with China
The Exclusion Process

52. SUBMIT YOUR QUESTIONS
AND/OR FEEDBACK

53. VISIT US AT ICPA!
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