United States Finalizes Section 301 Tariff Increases on Imports from China

On September 13, 2024, the United States Trade Representative (USTR) announced the final Section 301 tariff increases on imports from China,¹ following its original proposal in May 2024. Electric vehicles, electric vehicle batteries, battery parts, respirators and facemasks, syringes and needles, ship-to-shore gantry cranes, solar panel cells and modules, steel and aluminum products, and certain critical minerals imported from China will face increased tariff rates ranging between 25% and 100% beginning on September 27, 2024. 

The tariffs were originally scheduled to enter effect on August 1, but the action was delayed after USTR took longer than planned to review public feedback and finalize the tariff lists.² Tariffs on semiconductors, respirators and facemasks, syringes and needles, medical gloves, lithium-ion non-electrical vehicle batteries, permanent magnets, and natural graphite will increase further in 2025 and 2026. USTR is also considering issuing additional tariff increases for tungsten, polysilicon, and wafers, for which it will soon issue a separate notice.

The notice of modification of actions

The advance copy of the Federal Register notice, "Notice of Modification: China's Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation," (the "Notice") issued by USTR on September 13 includes the final list of the specific products and tariff rates at the Harmonized Tariff Schedule (HTS) 8-digit and 10-digit level. Annex C of the Notice provides the specific changes to the Harmonized Tariff Schedule of the United States that will be relied on for filing import declarations. The Notice also includes the final lists of manufacturing equipment for which importers can apply for tariff exceptions, the final list of solar panel manufacturing equipment for which tariff exceptions automatically apply, and a new waiver for certain ship-to-shore gantry cranes.

Covered products and implementation schedule

Annex A of the Notice summarizes the 382 HTS-8 codes and 7 HTS-10 codes covered by the increased tariffs, as well as product descriptions and the dates on which the tariffs will enter effect. The first tranche of the tariff increases will enter effect for covered products that are entered for consumption or withdrawn from warehouse for consumption on or after September 27, 2024. Tariffs on additional products (and increases in certain tariffs from the September 27 list) will enter effect on January 1, 2025 and January 1, 2026.

Like the other Section 301 tariffs, the new tariffs would only apply to direct imports of the listed products from China. The tariffs would generally not apply to downstream products, whether imported from China or a third country, that are under different HTS codes.

The final tariff levels and dates of entry into force are listed below:

Changes from the May proposed action

USTR originally proposed the tariff increases for public comment in a May 2024 Federal Register Notice.³ USTR received over 1,100 comments, covering issues related to the tariff levels, products covered by the tariffs, the machinery exclusion process, and the solar manufacturing equipment exclusion.

Based on public feedback, USTR made several changes to the tariffs:

• Exception for certain ship-to-shore gantry cranes: USTR has established a temporary tariff exclusion for ship-to-shore gantry cranes that were ordered prior to May 14, 2024 and imported prior to May 14, 2026. To use the exception, importers must file the importer certification form provided in Annex D of the Notice with their import declaration.
• Increases to the tariffs on respirators and face masks: Tariffs on surgical and non-surgical respirators and face masks will increase to 25% in 2024 (as originally planned) and then increase again to 50% in 2026.⁴ The final action also applies the tariff increase to HTS 6307.90.9870 (face masks of textile, disposable), which had not been included in the original proposal. The 25% tariff on disposable textile facemasks will enter effect on January 1, 2025 instead of September 27, 2024, giving importers a few more months to prepare. 
• Increase to the tariff on rubber gloves: In the final action, USTR has decided to increase the rate of additional duties on medical gloves to 50% in 2025 and then to 100% in 2026. The original proposal had called for implementing a 25% tariff in 2026.
• Increase to the tariff on syringes and needles: Syringes and needles will be subject to a tariff of 100% beginning on September 27, 2024 under the final action. The original proposed tariff was 50%.
• Temporary exclusion for enteral syringes: The 100% tariff on enteral syringes (HTS 9018.31.0080) – which are covered by the syringe and needle tariff – is now waived until January 1, 2026.

USTR has also made changes to the machinery and solar exclusions and is proposing additional tariffs on other products, which are discussed below.

Proposal for tariffs on additional products

USTR announced in the Notice that it intends to propose new Section 301 tariff increases on processed tungsten, polysilicon, and wafers. To implement the proposed tariffs, USTR will issue a separate proposed rule and request for comments. The proposed tariffs would not enter effect until after USTR completes the notice and comment process.

• Tungsten products: USTR will propose a 25% Section 301 tariff on HTS 8101.94.00 (tungsten, unwrought (including bars and rods obtained simply by sintering)); HTS 8101.99.10 (tungsten bars and rods (other than those obtained simply by sintering), profiles, plates, sheets, strip and foil); and HTS 8101.99.80 (tungsten, articles nesoi). These products are not currently subject to any Section 301 tariffs.
• Polysilicon and wafers: USTR will propose a 50% Section 301 tariff on HTS 2804.61.00 (silicon containing by weight not less than 99.99 percent silicon) and HTS 3818.00.00 (chemical elements doped for use in electronics, in the form of discs, wafers or similar forms; chemical compounds doped for use in electronics). These products are currently subject to a 25% Section 301 tariff.

New exclusion processes for industrial machinery

USTR is establishing a new exclusion process under which importers may request that specific covered products be excluded from the Section 301 tariffs. Unlike previous exclusion processes that applied to all covered products, this new exclusion process will only apply to machinery used in domestic manufacturing classified within certain HTS subheadings under Chapters 84 and 85. The eligible HTS subheadings are listed in Annex E of the Notice. Granted exclusions would be effective only through May 31, 2025. In the final action, USTR added five HTS subheadings to the exclusions eligibility list.

USTR provided the proposed process for requesting the exclusions in an August 15, 2024 Information Collection Request (ICR) in the Federal Register.⁵ The appendix to the ICR includes the proposed Exclusion Request Form, Objection To Exclusion Requests Form, Rebuttal To Exclusion Request Form, and Support Of Exclusion Request Form. The ICR was open to public comment until September 16, 2024. USTR stated that it "expects to launch the machinery exclusions process soon," when announcing the final tariffs on September 13, 2024.

Solar manufacturing equipment exclusion

USTR will automatically implement 14 tariff exclusions for listed solar cell and wafer manufacturing equipment classified within HTS 8486.10.0000, 8486.20.0000, and 8486.40.0030. The exclusions are retroactive and applicable with respect to products that are entered for consumption or withdrawn from warehouse for consumption on or after January 1, 2024, and through May 31, 2025. The exclusions are based on product description, which are provided in Annex B of the Notice.

USTR had originally proposed 19 automatic exclusions for solar manufacturing equipment but removed five from the final action. USTR states that it removed those five because manufacturers can acquire the covered equipment from sources outside of China. The Notice also makes several amendments to product descriptions, which may alter their scope.

Status of the previous general and COVID-related exclusions

While the Biden administration's review of the Section 301 tariffs proceeded over the past two years, USTR had maintained 352 general exclusions and 77 COVID-related exclusions to the tariffs. Alongside the completion of the Section 301 review and issuance of the tariff increases in May 2024, USTR announced that 234 of the exclusions would expire on June 14, 2024.⁶ The remaining exclusions will remain in effect until May 31, 2025 (the same date on which the manufacturing equipment exclusions under the new Section 301 expansion would expire). 

Though all exclusions are set to expire on May 31, 2025, USTR could extend any of the exclusions again at its own discretion. That said, in announcing the May extension, USTR emphasized that it expects importers to treat the exclusions as temporary and to seek alternative suppliers outside of China.

_{1 "Notice of Modification: China's Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation" Federal Register notice (September 18, 2024); see also, "USTR Finalizes Action on China Tariffs Following Statutory Four-Year Review," USTR, September 13, 2024.
2 "Office of the U.S. Trade Representative Continues to Review Public Comments for Proposed Modifications to China 301 Actions," USTR, July 30, 2024. 
3 "Request for Comments on Proposed Modifications and Machinery Exclusion Process in Four-Year Review of Actions Taken in the Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation," 89 FR 46252 (May 28, 2024).
4 The final notice also corrects the erroneous use of the obsolete HTS code 6307.90.9845 (N95 Respirators of Textiles), replacing it with 6307.90.9842 (surgical N95 respirators) and 6307.90.9844 (other N95 respirators).
5 "Agency Information Collection Activities; Request for the Office of Management and Budget To Approve Renewal of the Collection of Information Titled '301 Exclusion Requests,'" 89 FR 66484 (August 15, 2024). 
6 "Notice of Extension of Certain Exclusions: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation," 89 FR 46948 (May 30, 2024).} 

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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