CBP Affirms Policy for Multiple Section 301 Tariffs on Sets

CBP correctly applied two Section 301 tariff rates to imported toolsets from China, CBP said in a July 30 ruling. Stanley Black & Decker, through its lawyer at Follick & Bessich, requested reconsideration of an April ruling that found that a tool set imported by the Apex Tool Group could be subject to multiple tariffs (see 1904240014). The same issue seems to be under review at the Office of the U.S. Trade Representative after a lawmaker mentioned potential broader impact if the fourth tranche of tariffs takes effect and asked whether the USTR considered CBP's interpretation to be correct (see 1907310052).

The ruling in question found that the tool sets are classified in subheading 8206.00.00. That tool set subheading duty rate is based upon whichever component has the highest rate of duty, and because one of the components was subject to the Section 301 tariffs, the entire set received the same rate. Because the subheading for tool sets was subsequently also included in another list of Section 301 tariffs, the tariff rate increased even further. The addition of the first and third tranche tariffs, both now 25 percent, brings the duty rate to about 50 percent.

Black & Decker argued that "USTR did not intend to assess both additional rates of duty on items classified in subheading 8206.00.00, [Harmonized Tariff Schedule of the United States (HTSUS)] under Section 301." The company based "this argument on the fact that prior to the assessment of the 10% additional duty (now 25%) under List 3, there was neither a separate general (or Column 1) duty rate, nor a separate additional Section 301 duty rate assessed on tool sets classified in subheading 8206.00.00, HTSUS," CBP said. "However we find this argument unpersuasive."

While the Column 1 duty rate "may vary based on the items included in the tool set [that] does not mean that the Column 1 duty rate does not exist," the agency said. "Further, the fact that there was no separate additional Section 301 duty rate assessed on tool sets classified in subheading 8206.00.00, HTSUS prior to its inclusion in Section 301 List 3, also does not suggest that USTR did not intend for the Section 301 measures to apply twice. USTR’s silence on this issue could be interpreted either way. It could easily be argued that USTR knowingly included tool sets in List 3 and did not specify that these would be in lieu of the Column 1 duty rate."

CBP said there is "no need to attempt to deduce USTR’s intention with a plain reading of the HTSUS" because "nothing in the language of the Column 1 rate for 8206.00.00, HTSUS limits the duty rate to the article subject to the highest general duty rate." The rate for the tool sets "is the same as the article subject to the highest rate of duty without regard to whether that rate is derived from trade remedies."