Section 301 Tariff Exclusions

Case Study

In 2018, the US imposed additional tariffs on certain imports from China, known as Section 301 tariffs. A vacuum manufacturer turns to JMR to get things under control.

Client

Vacuum cleaner and floor care product manufacturing company.

Challenge

 In 2018, the US imposed additional tariffs on certain imports from China, known as Section 301 tariffs. The US Trade Representative’s office implemented a tariff exclusion process to exempt certain Chinese imports from these additional tariffs. Still, our client needed to pay the 301 tariffs while the USTR reviewed the exclusion claims. Once the USTR granted the exclusions, our customer found that they had several HTS codes and products that qualified for the exclusions. The first step for the importer was to immediately start using the appropriate exclusion HTS on all new entries to avoid paying the 301 tariffs. The next step was filing PSCs or protests on all imports where 301 tariffs were paid. Their current broker provided a 6-month timeline on the project, which was unacceptable because the consignee a) wanted to file for a refund ASAP and b) some of the entries were in danger of falling into or out of the protest timeframe. In a pinch, the customer turned to J.M. Rodgers to complete it in time.

    Solution

    J.M. Rodgers started with a complete analysis of the client’s ACE data and realized that a typical process for protests would not meet the scale or deadlines needed. We decided to bring our client through a customized exclusion process built upon the same principles that drive our high-volume import entry program.

    This process was based on the principle of an “assembly line” to leverage our ability to process high volumes of entries and meet Customs’ timeline. To assure the process stayed on track, we brought in our most senior staff to integrate the new process into our import compliance team. Once we had our strategy in place, we started to pull copies of all entry documentation that we needed for the program and put together protests of past entries to claim exclusion refunds.

     

    Results

    After confirming the solution above with the client, we started filing exclusions with U.S. Customs. The client eventually realized over sixty million dollars in exclusion-based tariff refunds, and all protests were filed within the deadline to maximize returns.

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    A Tradition of Excellence

    J.M. Rodgers Co., Inc. is a family-owned and operated business with a rich tradition of serving and providing unparalleled support to our valued customers. In operation since 1952, J.M. Rodgers Co., Inc. is a recognized leader in global logistics specializing in Customs Brokerage, Freight Forwarding, and Duty Drawback.

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    Find Out If You Qualify For Duty Drawback

     If you or your business imports and export goods to and from the United States, it’s possible that  you may qualify for duty drawback, which is a 99% refund on goods imported into the United States that are subsequently exported. Even if you don’t do both, you may still be able to qualify as long as importing and exporting happen along your supply chain.