UPS Webinar Section 301

July 26, 2018
Update on US Section 301 Tariffs
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July 26, 2018
2018 UPS® Customs Brokerage Webinar Series
Section 301: Challenges and Choices

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by UPS. This document is for informational purposes only. It does not constitute legal advice –
please consult with your own legal counsel for such advice. Also, do not rely on this information without performing your own research.
© 2018 United Parcel Service of America, Inc. UPS, the UPS brandmark, the color brown are trademarks of United Parcel Service of America, Inc. All rights reserved.
8_21 6_84
Section 301: Challenges and Choices
Presenters
• Host
• Greg Maddaleni,
LCB
• Customs Brokerage
Sr. Manager
• Panelist
• Stuart Schmidt, LCB
• Trade Compliance
Manager, UPS
Customs Brokerage
• Panelist
• Ron Shepherd, LCB
• Global Solutions
Director, UPS
Customs Brokerage

Agenda
4
Any questions?
Ask our panelists using the “Q&A”
function
Background Special Situations
301 Actions
3 Lists – what and
when
Foreign Trade Zones
Importer Exclusions
Tradenomics
Active response
checklist

Please note
This presentation is for informational purposes only. It does not constitute legal advice – please
consult with your own legal counsel for such advice. Also, do not rely on this information without
performing your own research.

Section 301 Duties
Background: Under Section 301 of the Trade Act of 1974, the United States
Trade Representative (USTR) initiated an investigation to determine whether
China’s acts, policies, and practices related to technology transfer, intellectual
property, and innovation are unreasonable or discriminatory, and burden or
restrict U.S. commerce.
Some of the USTR’s findings included:
• China uses joint venture requirements, foreign investment restrictions, and
administrative review and licensing processes to require or pressure technology
transfer from U.S. companies
• China deprives U.S. companies of the ability to set market-based terms in licensing
and other technology-related negotiations
• China directs and unfairly facilitates the systematic investment in, and acquisition
of, U.S. companies and assets to generate large-scale technology transfer
Source: https://ustr.gov/about-us/policy-offices/press-office/fact-sheets/2018/march/section-301-fact-sheet

Section 301 - Actions
Ad Valorem Duties
on Chinese Origin
Goods
• 25% on list of
$50B
• 10% on $200B
(details below)
World Trade
Organization
(WTO) Case
• Pursue dispute
settlement to
address
discriminatory
licensing practices
The USTR is taking two actions to address China’s trade
behaviors

Section 301 - Actions
The USTR has either taken or proposed the following duty actions:
List 1 (Annex A) List 2 (Annex C) List 3
Items
Import
Value
Duty
Status
Timing
818
$34B
25%
Taken
Effective a/o
July 6th
284
$16B
25%
Proposed
July 23rd – written
comments
deadline
6,031
$200B
10%
Proposed
Aug 17th written
comments
deadline

Section 301- List 2 Tariffs: Key Dates
6/29
Public
Hearing
Request
7/23
Written
comments
7/24
Public
Hearing
7/31
Rebuttal
??
Implement-
ation
$
284
Items
$16B
Entered Value
%
Add’l 25%
Duty

Section 301 - List 3 tariffs: Key Dates
7/27
Public
Hearing
Request
8/17
Written
comments
8/20-8/23
Public
Hearing
8/30
Rebuttal
??
Implement-
ation
$
6,031
Items
$200B
Entered Value
%
Add’l 10%
Duty
Source: https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

11
Process for Exclusion requests
90 days to file
Product Exclusion
Request
10/9 Deadline
File request on
Regulations.gov
Public has 14
days to comment
(objections)
Add’l 7 days for
interested
persons to
respond
Exclusions
effective 1 year
from date
granted,
retroactive to
July 6, 2018
• Exclusions are
product based for
ALL importers of
that product
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/ustr-releases-product-exclusion

Section 301 – Other categories of go0ds
Foreign Trade
Zones
• List 1
products
only may be
admitted as
‘privileged
foreign
status’ as
defined in 19
CFR 146.41
Chapter 98
• Additional
duty shall
not apply to
products of
chapter 98
Section 321
• De minimis
will be
permitted up
to the full
$800.00
limit for
goods that
qualify

China: retaliatory tariffs U.S. Section 30 tariffs
In response to Sec 301 Tariffs
13
Source: Customs Tariff Commission of the State Council (China) Announcement, June 16, 2018
$%
Items Effective Date Tariff Amount Value of U.S.
Exports
545 July 6th 25% $34B
114 ?? 25% $16B

Retaliatory tariffs from other governments
In response to Sec 232 Steel and Aluminum
14
Source: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/united-states-challenges-five-wto
$%
Country Effective Date Tariff Amount Value of U.S.
Exports
Canada July 1 10-25% $12.7B
China April 2 15-25% $3.0B
EU Tier 1 June 22 10-25% $3.2B
EU Tier 2 June 1, 2021 10-50% $4.2B
Mexico June 5 / July 5 7-25% $3.6B
Turkey June 21 4-70% $1.8B

UPS® Tradenomics: Ron and Stuart
The economic impact of trade on your business
15
??

A trade war’s active
response checklist
• STTAS’s ten steps to guide
your company through the
new trade landscape
16
Note: STTAS is a UPS Company
UPS® Tradenomics
The economic impact of trade on your business

Proprietary and Confidential: This presentation may not be used or disclosed to other than employees or customers, unless expressly authorized by STTAS, a UPS Company, UPS Trade Management Services, Inc., or United Parcel Service of America, Inc. © 2018 STTAS, a UPS Company. All rights reserved. This document is for informational purposes only. It does not constitute legal or
business advice. Do not rely on this information without performing your own research and consulting with your own legal counsel. Your use of this information is at your own risk. In no event will STTAS, a UPS Company, UPS Trade Management Services, Inc., or UPS be liable to any person or entity for any damages under any theory of law for any errors in this information.
Trade wars active response checklist
1. Assess the impact of changed tariffs
2. Verify your product classifications
3. Validate the rules of origin and work
content regulations
4. Ensure the finance side of importing
is in order
5. Investigate Duty Drawback
17
6. Consider FTZs and bonded
warehouses
7. Evaluate domestic suppliers
and free trade agreements
8. Explore filing a request for
exclusion
9. Examine tariff reengineering
opportunities
10.Start rearranging your
supply chain

Questions and Answers
CONSULTING SERVICES MANAGED SERVICES
COMPLIANCE CONSULTING DUTY DRAWBACK
TRADE CONSULTING PROCESS MANAGEMENT
TARIFF ENGINEERING ASSISTANCE WITH BROKER/FORWARDER
MANAGEMENT
SECURITY INITIATIVES CONSULTING ASSISTANCE WITH FTA (FREE TRADE
AGREEMENT) MANAGEMENT
FTA FEASIBILITY EVALUATIONS POST-ENTRY MANAGEMENT
DATA MANAGEMENT
CLASSIFICATION MANAGEMENT
ASSISTANCE WITH IMPORT/EXPORT LICENSE
MANAGEMENT
ASSISTANCE WITH DENIED-PARTY SCREENING
MANAGEMENT

Thank you for your participation!
Update on US Section 301 Tariffs
• Check Out:
• Feedback / value
• Request a copy of “The trade wars active response checklist”
• Inquire about your own Tradenomics discussion
• Interest in upcoming webinars
• For more information contact Greg Maddaleni at gmaddaleni@ups.com

UPS Webinar Section 301

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