When Asking for Tariff Exclusions, More Information Is Better, Trade Lawyers Say
While the reasons that Section 301 tariff exclusions were granted are murky to trade lawyers, in general, more information is better when submitting requests, trade lawyers said during a panel at the American Association of Exporters and Importers Annual Conference June 28. Pictures of your product, emails from domestic companies saying they can't provide the quantity you're looking for, and the number of U.S. jobs that are imperiled if you have to pay 25 percent more for this product are all good pieces of information to provide, they said.
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Melanie Weiland, grassroots manager for the Motor & Equipment Manufacturers Association, who used to be responsible for applying for aluminum exclusions at a large company, said: "If you’re saying you can’t get the product in the United States but have no documentation, or no proof, you’re not going to get very far."
David Hamill, a partner Arent Fox, said he was talking with someone who plans to submit a List 3 exclusion request Sunday night as soon as the portal opens (see 1906200002). "His view is that he wanted to put as much business confidential information in those fields as possible," Hamill said. "He said: ‘If you’re going to jump in the lake, jump in head first.'"
Gregory Connor, chief, electronics, machinery, automotive and international nomenclature branch, regulations and rulings, in the Office of Trade at CBP, also spoke on the panel. He noted that he was not representing CBP views. He said his branch has been reviewing the draft Harmonized Tariff Schedule code carve-outs that the Office of the U.S. Trade Representative is proposing to create exclusions. "Presumably there’ll be some questions about administrability. I’d almost rather talk about what is the meaning of life," he joked.
When CBP is concerned about administrability, sometimes USTR is sending form letters to requesters. "It does mean you’re still in the hunt," Connor said. "It means based on the description of the merchandise there’s either a question on the classification or there’s not enough meat on the bone for a carve-out for its current subheading in HTS." He said it's usually the latter. "Treat this as an unexpected second bite of the apple," he advised.
The USTR is publishing lists of requests, and describing whether each one is in Phase 1, Phase 2, Phase 3, denied, or granted. Phase 3 means that CBP is reviewing a request that USTR wants to grant on the merits, to see if it's administrable. Connor said it's not as linear as those Excel spreadsheets suggest. He said sometimes a batch of requests that are grouped together as potentially making sense as a new carve-out from an HTS code aren't administrable as first described, but could get there with more work.
"At the very beginning I think the USTR envisioned a process that almost entirely mimicked the [Miscellaneous Tariff Bill] process. But the problem is that the MTB is spearheaded by the [International Trade Commission], that has a huge staff [and] it takes 18 months to two years to pull off."
He said of the MTB process, "You're drafting the [tariff] statute, basically, and that’s an iterative process."