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As a follow-up to our Customer Advisory on Wednesday, May 8th, this morning the public received guidance from Customs and Border Protection (CBP) on the application of the increase in additional duties for Chinese goods covered by Section 301 Tariffs, List 3, here.

CBP has provided the following direction:

  • Goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, AND exported to the United States on or AFTER May 10, 2019, report the following HTS numbers and duty rates: HTS: 9903.88.03 or 9903.88.04 as applicable, Duty Rate: 25 percent
  • Goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on May 10, 2019, AND exported to the United States BEFORE May 10, 2019, report the following HTS number and duty rate: HTS: 9903.88.09, Duty Rate: 10 percent

Of significance was additional guidance provided: “subject imports that are entered into the United States on or after June 1, 2019 are subject to the 25% rate of additional duty under HTS 9903.88.03 and 9903.88.04.” Therefore, unless we receive an update or further guidance, Importers should review shipments that have longer transit time routings or delays that may be impacted by this deadline (departed before May 10, 2019 that may have an ETA of June 1, 2019 and thereafter). For importers who have already filed, the 25 percent tariff can be paid and a post-summary correction (PSC) can be filed.

As reported before, U.S. Trade Representative Robert Lightizer has stated that an exclusion process will be put in place, but no such process has been published yet. An all-inclusive list of goods identified as part of the Section 301 tariffs here, including exclusions and removals.

Additional duty costs are causing various concerns for Importers who are impacted by this action, ranging from bond liability limits, credit limits and Foreign Trade Zone (FTZ) processing. Goods entered into a U.S foreign-trade zone in privileged foreign status will receive the rate in effect at the time of the FTZ admission. These dates and zone privilege status need to be watched closely to ensure no surprise when the goods are withdrawn for consumption down the line.

The bond liability amount required by CBP is based upon various factors, including the amount of duties, taxes, and fees paid & due to CBP within the current twelve-month period. It is important to regularly review entry activity and ensure the bond liability amount is sufficient; considering future forecasts and potential other trade actions. Stacking bonds increases risk and exposure for both the surety and the Importer. Importers receiving a notice from CBP regarding bond insufficiency and demand for an increased bond should act quickly. The time frame to terminate and replace a bond is very limited. The use of a bond per entry (single entry bond) may be used if necessary, however this equates to more costs and labor for both the Importer and the surety. Collateral for bonds may be required under certain circumstances.

Importers who do not reimburse the Customs Broker or pay CBP by check in advance of, or on the due date, have the option of using Importer ACH. Importers not on Importer ACH and/or Periodic Monthly Statement may incur a disbursement fee for any duty advancement due to the increased tariffs. In addition, payment to the Customs Broker does not relieve the Importer of the liability to pay duties. ACH automates the process of the payments and is an easy method to ensure CBP is paid within the required time frame. Periodic Monthly Statement allows Importers to consolidate the payment of duties and taxes, to be paid as late as the 15th business day of the following month. More information is here.

Mallory Alexander will continue to keep you updated as more information is made available. Please contact your Account Representative if you have any further questions.

Mallory Alexander’s consulting arm, M-PACT Solutions, is also available to assist with any inquiries regarding the new tariffs and classification questions regarding your products. Contact M-PACT Solutions at