Tariff Exclusions: Section 301 Tariffs

 

The following information is part of the Tariff Exclusion Quantification Initiative at the Mercatus Center. For similar information on Section 232 tariffs, please visit the Section 232 tariffs page. For interactive heat maps displaying the Section 232 tariff microdata, please visit our tariffs interactive page.

 

Section 301 Tarrifs: Thousands of Exclusion Requests from US Firms

Under Section 301(B) of the Trade Act of 1974, the United States Trade Representative (USTR) conducted an investigation into certain acts, policies, and procedures of the Chinese government related to technology transfer, intellectual property, and innovation. Following the investigation, the USTR invited public comment on a proposed list of tariffs. USTR then modified the list and on July 6, 2018, the first tranche of tariffs went into effect. To date, there have been three tranches of tariffs, accounting for approximately $250 billion of US imports from China (nearly half of the value of US imports from China in 2018). The fourth tranche, if implemented, would cover nearly the remaining amount of trade.

A tariff is a tax levied on imported goods and paid by the importer. Consumers generally bear the burden of the tax when the import is a final consumer good, and manufacturers generally bear the burden when the import is an intermediate good.

In response to these increased costs, US firms and individuals had the opportunity to request for a specific product to be excluded from either tranche one or two (US importers await an exclusion request process to open for tranche three). If an exclusion request is approved, then the product is removed from the list and is no longer subject to the Section 301 tariff. An approval is then valid for one year. The exclusion request process is conducted by the USTR, and all requests are made publically available on regulations.gov.

The request process closed for tranche one in October 2018 and tranche two in December 2018. As of July 30, 2019, tranche 1 had 10,823 exclusion requests, of which 2,813 were approved (26 percent), 6,624 were denied (61 percent), and 1,386 remain pending (13 percent). Tranche two had 2,920 exclusion requests, of which 292 were approved (10 percent), 1,484 (51 percent) denied, and 1,600 (39 percent) remain pending.

The microdata for the exclusion requests filed for tranche one and two may be downloaded below. The final list of tariff codes included under tranches one, two, and three with the historical import numbers are also available. Note that the tariff codes included under tranche four are still under public comment and the USTR may revise it. When using the data, please refer to the codebook. The tables will be regularly updated as additional decisions are made on the product exclusion requests.

 

Tranche 1 Product Exclusion RequestsTranche 2 Product Exclusion RequestsCodebook
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Tranche 1 Final ListTranche 2 Final ListTranche 3 Final ListTranche 4 Proposed List
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Source: The broad economic categories are based on the United Nations HTS concordance table at: https://unstats.un.org/unsd/trade/classifications/correspondence-tables.asp; and authors’ calculations using regulations.gov

 

Produced by Christine McDaniel and Danielle Parks with the Trade and Immigration Project of the Mercatus Center.

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