Tough to Say in ‘Uncharted Territory’ What Tariff Exemptions USTR Will Grant, Says Expert 

It’s impossible to forecast how many product-specific exemptions to the Trade Act Section 301 tariffs on Chinese imports the Office of the U.S. Trade Representative will grant “because we’re in uncharted territory,” David Cohen, a trade expert with Sandler Travis, told a Sports and Fitness Industry Association webinar Thursday. With Tuesday’s deadline having lapsed for requesting exemptions to the first round of tariffs that took effect July 6, USTR denied 108 requests of the more than 10,000 pending and hasn't granted exemptions, said Cohen. Requests for exemptions are due Dec. 18 on the second tranche of tariffs that took effect Aug. 23, he said. USTR has announced no process for requesting exemptions on the third tranche that took effect Sept. 24, and there’s talk the administration may wait to launch a process until after Jan. 1 when the duties are scheduled to rise to 25 percent from 10 percent, he said. “It is unclear yet whether and how many” exemptions USTR “will permit,” said Cohen. “I am optimistic that there will be some, at a minimum.” His “cynical view” is they will need to approve some “because if they approve zero, they will be sharply criticized as having this entire system be nothing more than a sham,” he said. Cohen’s firm has “advocated” for exemptions “on many fronts,” including for companies that source products from China through “a wholly foreign-owned enterprise,” he said. “In many cases, companies have invested brick and mortar on the ground in China, and for them to lift up and pick up stakes and invest in new brick and mortar in a third country is enormously cost-prohibitive.”