China 301 Duties
Any questions can be directed to Rick Van Arnam, The Vision Council's regulatory counsel, at email@example.com.
China 301 Duties Update: Lawsuit May Provide Members with Opportunity to Recover China 301 Duties
A lawsuit was recently filed at the U.S. Court of International Trade (CIT) contesting the assessment of China 301 duties on goods found on List 3. This lawsuit is challenging the government’s authority to impose these duties under several different legal theories, and, if successful, the case should impact the duties assessed on List 4 as well. However, The Vision Council’s regulatory affairs counsel believes that only importers who file similar lawsuits will be positioned for recovery if this case is successful, with recovery including all China duties paid by a contesting party.
The CIT case is proceeding under a jurisdiction that requires impacted companies to file within two years of when the cause of action accrued; in this case, the United States Trade Representative (USTR) published imposing the List 3 duties on September 21, 2018. Therefore, those with List 3 merchandise that were interested in filing a similar lawsuit were advised to do so on or before September 20, 2020.
Those impacted by List 4 have more time to consider, as the two-year window for contesting those payments would not expire until on or about August 19, 2021. Thus, companies impacted by List 4 should file a similar case before August 19, 2021.
Most eyewear products are on List 4, including lenses, frames, sunglasses, reading glasses and many low vision devices. However, there are a few eyewear items on List 3, including eyeglass cases and certain lens cleaning solutions and wipes.
U.S. Trade Representative Denies Requests to Extend China 301 Exclusions for Spectacle Frames and Reading Glasses
On Friday, August 28, 2020, The U.S Trade Representative (USTR) denied all requests to extend the existing China 301 duty exclusions for spectacle frames and reading glasses. Therefore, as of September 1, 2020, the 7.5 percent China 301 duty will be imposed again on those optical products. Other relevant duties, taxes and fees assessed on frames and reading glasses, like the 2.5 percent duty on reading glasses and on plastic frames, continue to be assessed.
This decision is final and not subject to additional review.
Background Information on China 301 Duties
Possible Extension of Exclusions for China 301 Duties on Spectacle Frames and Reading Glasses
On June 26, 2020 and on July 15, 2020, the United States Trade Representative’s (USTR) office issued Federal Register notices announcing it was considering extending the exclusions from China 301 duties for over-the-counter reading glasses and spectacle frames. Public comments on this proposed action were requested.
The Vision Council urged spectacle frame and over-the-counter reading glass companies to file comments if they supported extending the existing exclusions. The Vision Council also submitted comments in favor of extending the spectacle frames and reading glass extensions.
U.S. Trade Representative Grants China 301 Exclusions for Reading Glasses
In early July 2020, The Vision Council notified members that The U.S. Trade Representative (USTR) had granted an exclusion from the China 301 duties for reading glasses classifiable in subheading 9004.90.0000 of the Harmonized Tariff Schedule (HTS) of the United States. Specifically, the exclusion would cover “non-prescription spectacles, other than sunglasses (described in statistical reporting number 9004.90.0000).”
The exclusion was applied retroactively to September 1, 2019, the date that non-prescription reading glasses were first assessed for China 301 duties. The exclusion, however, would expire on September 1, 2020, at which time the China 301 duties would revert.
The Vision Council informed members that the China 301 exclusion on “non-prescription spectacles, other than sunglasses” only covered the payment of the China 301 duties. Other relevant duties, taxes and fees that might have been assessed on your entry remained including the 2.5 percent “ordinary” Customs duties on non-prescription reading glasses.
New China 301 Exclusion Denials and Refund Process for Spectacle Frames
After providing relief to the spectacle frame industry on June 9, the U.S. Trade Representative (USTR) began denying exclusion requests filed by companies, including The Vision Council, for plano sunglasses, over-the-counter reading glasses, and prescription lenses. The Vision Council informed members that the USTR had not yet acted on all open applications for exclusions for these products. The Vision Council monitored the situation and notified members if any remaining applications were successful.
The Vision Council Secures China 301 Exclusions for Spectacle Frames
On June 9, 2020, the U.S. Trade Representative (USTR) published notice that it was granting exclusions from the China 301 duties for spectacle frames classifiable in subheadings 9003.11.0000 or 9003.19.0000 of the Harmonized Tariff Schedule of the United States. By excluding both subheadings from the China 301 duties, the USTR’s decision covered spectacle frames of all materials including plastic and metal. An exclusion was also granted for safety spectacle frames of plastic that met Occupational Safety and Health Administration (OSHA) standards and are classified in subheading 9003.11.0000.
The Vision Council and several of members had requested the exclusions in January 2020. Any company importing spectacle frames that conform with The Food and Drug Administration (FDA) for eyewear or OSHA for safety eyewear standards, benefitted from this exclusion and does not have to be one of the petitioning companies.
The exclusions were applied retroactively to September 1, 2019, the date that spectacle frames were first assessed China 301 duties. A process was announced shortly thereafter for providing refunds of duties previously paid from that date forward. The exclusions expired on September 1, 2020, at which time the China 301 duties reverted.