China Launches Commodity Exclusion for Additional Tariffs

On May 13, 2019, the Customs Tariff Commission of the State Council initiated the trial work on the exclusion process of U.S. goods subject to the additional tariffs, reflecting Chinese government’s considerations on the public interest under the Sino-US trade war. Recalling two nations’ multiple rounds of tariff fight last year, the United States successively imposed additional tariffs on $34 billion, $16 billion and $200 billion of Chinese goods through section 301 investigation. In retaliation, China has imposed a tariff on the first batch of $50 billion of U.S. goods to as high as 25%, and additional 5% to 10% tariffs on the second batch of 5207 taxable items. Following the increase in U.S. tariffs on $200 billion of Chinese exports from 10% to 25% announced on May 10, China announced it will further increase tariffs on roughly $60 billion of U.S. goods on May 13. Chinese government released an announcement to implement exclusion process for the goods subject to additional tariffs on the same day.
According to China's exclusion process, the goods that have passed the review will be included in the exclusion list, and no additional tariffs will be imposed within one year from the date of implementation of the exclusion list. In addition, for the goods excluded from the additional tariffs, the importing enterprise may apply to the China Customs for refund of the tariffs previously imposed. Details are as follows:
1、Who to Apply for Exclusion
China's exclusion process applies to all U.S. imports covered by the current tariff increase measures. Interested parties of the goods, including but not limited to the importers, producers, and companies in China that use the goods, are eligible to apply for the exclusion. To avoid repeated applications, Chinese government encourages industry trade associations on behalf of the industry to submit applications for the exclusion.
2、Goods to Apply for Exclusion
Specifically, enterprises involved in importing, producing, and using U.S. goods may apply for exclusion on their own or through industry trade associations:
1)Live animals, animal products and plant products;
2)Animal fat and vegetable oils, and decomposition products;
3)Food, beverage, tobacco and other products;
4)Mineral products: including fossil fuels, slag, etc.;
5)Chemical industry and related industrial products: inorganic chemicals, organic chemicals, pharmaceuticals, fertilizers, etc.;
6)Other raw materials and products: plastic and its products; rubber and its products; rawhide, leather and artificial fur and its products, wood and wood products; wood pulp and other fiber products;
7)Textile raw materials, products and accessories: textile raw materials and textile finished products; accessories including shoes, hats, umbrellas;
8)Products of stone, gypsum, cement and other similar materials; ceramics; glass products;
9)Pearl gems and precious metal products;
10)Steel and steel products, base metals such as copper, nickel, aluminum, lead and zinc and their products;
11)Machines, mechanical products, electrical equipment and components;
12)Vehicles, aircrafts, ships and related transport equipment;
13)Optical, metering, medical equipment, precision instruments and other products;
14)Other miscellaneous items such as furniture, toys, sporting goods, etc.;
15)Art collections;
For details of the specific products, please refer to the attachments: The First List and Second List of the First Batch of Imports from the U.S. Subject to Additional Tariffs, and The First List to Fourth list of the Second Batch of Imports from the U.S. Subject to Additional Tariffs.
Please note that items such as automobiles and auto parts that have been stopped or suspended for tariffs are not included in this exclusion. For these goods, the tariffs already imposed will not be refunded.
3、How to Apply
The exclusion request shall be made for products classified within one 8-digit HS subheading through the online declaration system of the tariff policy research center of Ministry of Finance of People’s Republic of China with the link: https://gszx.mof.gov.cn/
The applicant shall use facts and data to explain the reasons of application from the following three aspects: a) difficulties in finding the substitute sources of the goods. b) the serious economic damage caused by the additional tariffs to the applicants. c) the significant negative structural impacts (including impacts on industry development, technological progress, employment, environmental protection, etc.) on relevant industry or serious social consequences caused by the additional tariffs.
Timetable
1. The application period of the first batch of importing goods subject to additional tariffs: June 3, 2019 to July 5, 2019.
2. The application period of the second batch of importing goods subject to additional tariffs: September 2, 2019 to October 18, 2019.
The exclusion process is an important opportunity for related industries and enterprises affected by the Sino-US trade war. Relevant enterprises and industries are advised to take this opportunity, actively applying for the exclusion, making up for the losses suffered, and preparing for the potential negative impacts that may arise from new tariffs.
The first batch of goods subject to additional tariffs
The goods listed in The First List of Imports from the United States Subject to Additional Tariffs and The Second List of Imports from the United States Subject to Additional Tariffs of the No. 5 notice and No.7 notice of the Customs Tariff Commission of the State Council 2018.

The First List of Imports from the United States Subject to Additional Tariffs

The Second List of Imports from the United States Subject to Additional Tariffs
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The second batch of goods subject to additional tariffs
The goods listed in Annex 1-4 of the No. 6 notice of the Customs Tariff Commission of the State Council 2018.

List of Imports from the United States Subject to 25% Additional Tariffs

List of Imports from the United States Subject to 20% Additional Tariffs

List of Imports from the United States Subject to 10% Additional Tariffs

List of Imports from the United States Subject to 5% Additional Tariffs
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