China 301 Duties
*Note – As of February 14, 2020, the China 301 duties imposed as a result of the publication of List 4A has been reduced from 15% to 7.5%. Products benefiting from this reduction include, but are not limited to, spectacle frames, glass and plastic lenses, sunglasses, reading glasses, safety eyewear and goggles. Please contact The Vision Council if you have questions about the various products that are covered by this reduction.
On May 10, 2019, the Trump administration raised China 301 duties from 10 to 25 percent, impacting The Vision Council's member companies importing Chinese-origin hand-held and stand magnifiers, eyeglass cases and cleaning solutions. The increase was originally scheduled for Jan. 1, 2019 but was held in abeyance while the United States and China negotiated on trade issues. In the following days, the fourth list of tariff numbers—which could become subject to China 301 customs duties—was published in the Federal Register on May 17, 2019.
This fourth tranche includes all remaining tariff numbers not previously subjected to China 301 duties with limited exceptions, and thus captures all optical products that to date have remained outside of the trade war. Lenses, frames, sunglasses, reading glasses and low vision devices originating in China will be subject to additional duties, up to 25 percent, when this fourth tranche is implemented.
After the G20 summit concluded on June 29, President Trump announced that the United States would not assess additional customs duties on the remaining $300 billion in Chinese imports at this time. Instead, the United States and China agreed to restart talks toward achieving a negotiated settlement to the ongoing trade war.
On Aug. 13, 2019, the Trump administration set forth two sub-lists of tariff numbers included in the fourth tranche of China 301 tariffs scheduled to go into effect on Sept. 1, 2019, and Dec. 15, 2019. These two lists—4A and 4B—include optical products and are scheduled to be subject to an additional 10 percent tariff. Read the full press release from the Office of the U.S. Trade Representative (USTR), here. See below for the two divisions of list four.
List 4A (Effective September 1): see Annex B page 43330
- 9001.40.00 - Spectacle lenses of glass, unmounted
- 9001.50.00 - Spectacle lenses of materials other than glass, unmounted
- 9003.11.00 - Frames and mountings, of plastics, for spectacles, goggles or the like
- 9003.19.00 - Frames and mountings, other than of plastics, for spectacles, goggles or the like
- 9003.90.00 - Parts of frames and mountings for spectacles, goggles or the like
- 9004.10.00 - Sunglasses, corrective, protective or other
- 9004.90.00 - Spectacles, goggles and the like, corrective, protective or other, other than sunglasses
- 9005.10.00 - Binoculars
List 4B (Effective December 15): see Annex D page 43450
- 9005.80.40 - Optical telescopes, including monoculars
The Sept. 1 and Dec. 15 dates do nothing to alter the China 301 tariffs currently in effect. Any Products impacted by those tariffs corresponding with the first, second and third China 301 lists will continue to be assessed an additional 25 percent tariff on Chinese-origin goods.
Earlier this summer, The Vision Council advocated for the removal of optical products from this fourth list of tariff numbers. That process included:
- Submitting comments with the USTR opposing the inclusion of optical products on the fourth list because they are medical devices
- Testifying before the USTR by The Vision Council Chairman Ken Bradley in support of our comments and concerns
- Creating an ad hoc coalition of optical and eyecare related trade associations and other groups, which in turn submitted its own comments opposing the proposed inclusion of optical products
- Circulating The Vision Council’s comments on Capitol Hill as well as within the White House
Recently, the Office of the United States Trade Representative (USTR) has issued a press release reporting that the U.S. and China have reached a “phase one” agreement to the trade war between the two countries. Toward that goal, the U.S. has agreed to suspend implementation of additional China 301 duties on what is called List 4B tariff numbers, which had been scheduled to go into effect on Dec. 15, 2019. The Vision Council’s members were not impacted by List 4B.
Under the phase one agreement, the existing 15 percent China 301 duties currently being assessed on List 4A merchandise will be rolled back to 7.5 percent. This will benefit members importing Chinese origin spectacle lens, spectacle frames, Plano sunglasses, over-the-counter reading glasses, prescription eyeglasses and numerous low vision devices. The USTR did not say when the roll back in duty rates will occur.
However, the existing 25 percent China 301 duties currently being assessed on List 1, List 2 and List 3 goods will remain at 25 percent. This means that members of The Vision Council who import Chinese origin eyeglass cases, cleaning solutions, hand-held and stand magnifiers, various types of production machinery and diagnostic equipment will continue to be subject to a 25 percent additional duty.
The USTR’s press release makes a general mention of various concessions being made by the Chinese including promises to buy more U.S. origin goods and structural reforms to its economic and trade regimes.
On Jan. 15, 2020, the U.S. and China signed a phase one trade deal that requires structural reforms to China’s economic and trade regimes. These reforms will be seen in the areas of intellectual property, forced technology transfers, financial services, agriculture, and currency and financial exchanges. In addition, China has agreed to purchase substantial quantities of U.S. origin goods and services in the coming years.
As a result, the U.S. agreed to modify a portion of its existing Section 301 China tariffs, a point of interest to members of The Vision Council who import Chinese-origin product. The Office of the United States Trade Representative (USTR) has issued a Federal Register Notice stating that the present 15 percent tariff applicable to Chinese-origin goods on List 4A will be reduced to 7.5 percent for goods entered or withdrawn from consumption on or after Feb. 14, 2020. List 4A included lenses, frames, sunglasses, readers, eyeglasses and some low vision devices. The existing 25 percent tariff assessed on products contained on Lists 1, 2, and 3, however, will remain in place, subject to future negotiations between the U.S. and China.
The agreement contains another point of interest for The Vision Council’s members. China has agreed to expand trade with the U.S. by purchasing approximately $200 billion more in U.S. goods over the next two years, drawn from the following general categories: manufactured goods ($77.7 billion), agriculture goods ($32.0 billion), energy products ($52.40 billion) and services ($37.9 billion). The manufactured goods category is further subdivided into eight subgroups, one of which is “optical and medical instruments,” covering items classifiable under the following Harmonized Code tariff headings: 9002, 9003, 9011, 9012, 9018, 9019, 9020, 9021 and 9022. Thus, The Vision Council’s members may have new opportunities to sell these U.S.-made products into China
For more information on the China 301 duties, please listen to The Vision Council's town hall informational sessions, which were held on May 28, 2019. The full conversations can be found here.
Any questions about this issue can be directed to Rick Van Arnam, The Vision Council's regulatory counsel, at email@example.com.