by David Verkaik, VP Drawback Development | August 23, 2018
On March 8, 2018, President Trump imposed additional tariffs on imports of Steel mill products (25%) as well as on Aluminum products (10%). These duties were levied as a result of Presidential Proclamations 9704 and 9705. As published in the CSMS# 18-000315 (Cargo Systems Messaging Service) these additional duties will impact many countries, including, but not limited to: Canada, Mexico, Australia, Austria, France, Germany, Italy and the United Kingdom. This has been documented under Chapter 98 of the Harmonized Tariff Schedule (9802.00.60).
On August 18, 2017, the United States Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 with regard to the trade practices of China. As a result, on June 15, 2018, the USTR imposed additional import duties on a large list of Chinese products. As published in the CSMS# 18-000419, these tariffs will be assessed at 25% of the entered value of goods imported from China and are documented under chapter 98 of the Harmonized Tariff Schedule (9903.88.01).
Many U.S. companies have been frantically searching for other sources for Steel and Aluminum products (Section 232) as well as the many products on the lists under Section 301. However, it will take these companies a significant amount of time as well as capital in order to make these changes. These U.S. companies have and will incur massive financial burdens as a result of these duties. They have to decide whether or not to place some of this additional cost onto their customers, however, in order to remain competitive, this is often not a good idea.
Fortunately, Duty Drawback is the answer to some of these tariffs. The Section 301 duties imposed on China are in fact eligible for duty drawback refunds. J.M. Rodgers will prepare duty drawback claims on behalf of our clients that pay these duties. The drawback refunds may be claimed on both the original import duties as well as the Section 301 duties. Unfortunately, Section 232 duties are not eligible for duty drawback refunds.