As the global supply chain grapples with continued disruption, shippers face immense challenges to keep goods moving, meet customs requirements and manage costs.

More than 60% of shippers say that pressure to reduce costs is among their top three pain points for 2022, according to a January survey by C.H. Robinson. One of the ways they can identify significant cost savings right now is by determining their eligibility under tariff exclusions that were recently reinstated by the United States Trade Representative (USTR).

On March 23, 2022, USTR announced it will reinstate through the end of this year more than 350 previously expired China duty exclusions under Section 301 of the Trade Act of 1974, retroactive to October 12, 2021. The reintroduced exclusions apply to any product that originates in China and meets the description in the exclusion, regardless of who is importing. It’s important to act now to identify qualifying exclusions and estimate potential duty refund amounts.

A brief background: In late 2021, USTR began the process of evaluating 549 specific product exclusions with the possibility of granting extensions. Most expired as of December 31, 2020. Following a public comment period, which concluded on December 1, 2021, USTR completed an in-depth review of submitted comments with the advice of advisory committees, the interagency Section 301 committee, and the White House COVID-19 Response Team.

As stated in this press release, USTR reinstated 352 previously expired Section 301 China duty exclusions.

So now what? To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by USTR, importers may file a Post Summary Correction if within the PSC filing timeframe — up to 15 days prior to the scheduled liquidation date, which is generally 300 days from date of entry summary filing. If the entry is beyond the PSC filing timeframe, importers may file a protest if within the protest filing timeframe, which is 180 days following liquidation of the impacted entry.

As reinstated exclusions are available only for products that meet the specific description in the product exclusion language, importers requesting an administrative refund for previously paid duties, whether through a PSC or protest, must provide supporting information to U.S. Customs and Border Protection (for example, product literature, descriptive illustrations and product specifications), and correlate this information clearly to each applicable entry line to ensure proper filing.

Shippers should expect a high level of scrutiny by CBP during the documentation review. They must ensure that PSC or protest paperwork is organized and clearly conveyed when uploading this documentation to CBP, or providing it to a customs broker for uploading.

There are tools available to help shippers more easily and quickly understand their duty recovery potential, such as the U.S. Tariff Search Tool. Shippers can input their organization’s Harmonized Tariff Schedule (HTS) code and receive information about their eligibility under the tariff exclusions to better understand their total landed cost. The tool allows shippers to easily identify retroactive and prospective exclusion opportunities by using the 10-digit tariff classification codes, as queried directly from both the U.S. International Trade Commission (USITC) and all duty-exclusion notices published by USTR, including the most recent one from March 23, 2022.

Under the Senate’s U.S. Innovation and Competition Act (USICA), there may be additional opportunities to collect refunds on Section 301 China duties previously paid to CBP. According to the bill, all previously expired duty exclusions would be reinstated from the date of passage of the legislation through December 2022.

The USICA and House of Representatives’ response to it, the America COMPETES Act, are both under deliberation, and lawmakers will need to reach a compromise on the differences between the bills before a final bill can go to President Biden’s desk for signing. Notably, the America COMPETES Act does not contain any provisions to reinstate previous duty exclusions to the Section 301 China duties.

Shippers need to understand how the recent USTR announcement might affect their supply chains, and identify steps to help mitigate risk and maximize cost-savings opportunities.

Ben Bidwell is director of North America customs and compliance, and Anahi Czeszewski is product development manager, with C.H. Robinson.