Tariff Changes Over Past Six Months Implement, Suspend EU Retaliatory Tariffs

Revisions to the tariff schedule over the past six months echoed the back and forth between the U.S. and the European Union over retaliatory tariffs under both the Airbus and digital services tax disputes. Provisions for new tariffs were added then suspended, some immediately. Other changes include updates for USMCA tariff-rate quotas, a Section 301 exclusion extension and an extension to Section 201 safeguards on large residential washers.

Preliminary Revision 1 (01/06/21). The first change for the year came days after the tariff schedule was initially published. In preliminary Revision 1 to the Harmonized Tariff Schedule, provisions for retaliatory tariffs on France’s Digital Services Tax were added in new U.S. Note 22 to subchapter III of chapter 99 and new subheading 9903.90.01. After some confusion after the change was made, the Office of the U.S. Trade Representative announced the tariffs would be suspended (see 2101070054), and as of yet have not taken effect. None of the tariffs were collected during the brief period between the posting of Revision 1 and the suspension of the tariffs by USTR.

Preliminary Revision 2 (01/12/21). The International Trade Commission on Jan. 11 posted Revision 2 to the 2021 Preliminary Harmonized Tariff Schedule, implementing an increase in now-suspended tariffs on goods of the European Union that took effect Jan. 12 (see 2012310010). The ITC added new U.S. Note 21(s) to describe fortified wines and grape spirits from France and Germany that were newly subject to a 25% Section 301 tariff under new subheading 9903.89.57. The note also described grape spirits that are not subject to the additional tariffs, but which nonetheless were given their own Chapter 99 subheading at 9903.89.59. Similarly, the ITC also added new U.S. Note 21(t) to describe aircraft manufacturing parts from France and Germany subject to the additional 15% tariff under subheading 9903.89.61. The new note also described aircraft manufacturing parts that were not covered by the new tariffs, which were to be filed under new subheading 9903.89.63.

Preliminary Revision 3 (02/04/21). Revision 3 to the preliminary edition of the 2021 Harmonized Tariff Schedule implemented extended and revised Section 201 safeguards on large residential washers, as announced in a proclamation issued by President Donald Trump in mid-January (see 2101150049). Minor changes were also made to an exclusion from Section 301 China tariffs for supported catalysts with zinc oxide as the active substance.

Basic Edition (03/15/21). The ITC released the 2021 Basic Edition of the tariff schedule on March 15. The new edition implemented the four-month pause on Section 301 tariffs on goods from the United Kingdom that took effect March 4 (see 2103040043). It also added a new provision on the USMCA tariff-rate quota for sugar-containing products from Canada.

New U.S. Note 21(u) was added to Subchapter III of Chapter 99 of the tariff schedule. It said: “The U.S. Trade Representative has determined that additional duties imposed by subheadings 9903.89.05, 9903.89.07, 9903.89.10, 9903.89.13, 9903.89.16, 9903.89.19, 9903.89.22, 9903.89.25, 9903.89.28, 9903.89.31, 9903.89.34, 9903.89.40, 9903.89.43, 9903.89.46, 9903.89.49, 9903.89.50 and 9903.89.55, and as provided by their associated subchapter notes, shall not apply to articles the product of the United Kingdom that are entered on or after 12:01 a.m. eastern standard time on March 4, 2021 and before 12:01 a.m. eastern daylight time on July 4, 2021.”

U.S. Note 21(a) to Subchapter III of Chapter 99 was amended to say that the subsequently suspended Section 301 tariffs on EU goods apply “except as provided in note 21(u) of this subdivision.”

The new provision on the USMCA tariff-rate quota for sugar-containing products from Canada was added in new paragraph (b)(4) to U.S. Note 10 of Subchapter XXIII. The new paragraph specifies that, for in-quota sugar-containing products from Canada, “[O]riginating goods that last underwent production in Canada shall be eligible for entry under subheading 9823.10.02 regardless of whether they qualify to be marked as a good of Canada pursuant to U.S. law.” The change record says the change took effect as of July 1, 2020.

Finally, the ITC removed an expired provision for certain tariff-rate quotas under the U.S.-Morocco free trade agreement that expired at the end of 2019. The deleted paragraph was U.S. Note 12(c) to Subchapter XII of Chapter 99.

Revision 1 (03/17/21). Shortly thereafter, the ITC published Revision 1 to the Basic Edition to implement the four-month suspension of Section 301 tariffs on goods from the European Union imposed as part of the Airbus subsidy dispute (see 2103050036), which has since been extended to five years (see 2106170025).

New U.S. Note 21(v) to Subchapter III of Chapter 99 said: “The U.S. Trade Representative has determined that additional duties imposed by subheadings 9903.89.05, 9903.89.07, 9903.89.10, 9903.89.13, 9903.89.16, 9903.89.19, 9903.89.22, 9903.89.25, 9903.89.28, 9903.89.31, 9903.89.34, 9903.89.37, 9903.89.40, 9903.89.43, 9903.89.46, 9903.89.52, 9903.89.55, 9903.89.57, 9903.89.59, 9903.89.61, and 9903.89.63 and as provided by their associated subchapter notes, shall not apply to articles the product of Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden that are entered on or after 12:01 a.m. eastern standard time on March 11, 2021 and before 12:01 a.m. eastern daylight time on July 11, 2021.”

Revision 1 also corrected a footnote to subheading 9002.11.90 to refer to the right subheading for a Section 301 exclusion associated with the tariff provision.

Revision 2 (03/30/21). Revision 2 extended Section 301 exclusions for certain COVID-19 treatment goods, as announced in early March (see 2103050052). The terms of subheadings 9903.88.62, 9903.88.63, 9903.88.64 and 9903.88.65 were amended so they now say they expire Sept. 30.

Revision 3 (04/26/21). The only change in Revision 3 to the basic edition was the addition of language to apply Section 301 exclusions to goods on the water in May-June 2019 at the time an increase in the tariffs, from 10% to 25%, was announced (see 2104230047). U.S. Note 20(l) to Subchapter III of Chapter 99 was amended to add the following: “the product exclusions provided by headings 9903.88.13, 9903.88.18, 9903.88.33, 9903.88.34, 9903.88.35, 9903.88.36, 9903.88.37, 9903.88.38, 9903.88.40, 9903.88.41, 9903.88.43, 9903.88.45, 9903.88.46 and 9903.88.48 shall apply to articles the product of China that were entered under heading 9903.88.09 and that are provided for in this subdivision." A compiler’s note said: “The last sentence of this paragraph applied to such articles exported before May 10, 2019, and entered for consumption, or withdrawn from warehouse for consumption, into the United States on or after May 10, 2019, and before June 15, 2019.”

Revision 4 (06/10/21). Revision 4 added suspended retaliatory tariffs on several countries for their digital services taxes. U.S. Note 23 of subchapter III of chapter 99 and subheading 9903.90.02 were added for Austria; U.S. Note 24 and subheading 9903.90.03 for India; U.S. Note 25 and subheading 9903.90.04 for Italy; U.S. Note 26 and subheading 9903.90.05 for Spain; U.S. Note 27 and subheading 9903.90.06 for Turkey; and U.S. Note 28 and subheading 9903.90.07 for the United Kingdom. For each note, a compiler’s note says the provision is suspended, as announced by USTR on June 2.