On April 15, the Office of the U.S. Trade Representative (USTR) approved tariff relief for a range of China-sourced products that had 25% import tariffs imposed last summer as the trade war began to heat up.
Auto shredder wear parts – approximately 85% of which the industry sources from China – was on the list, alleviating the recycling industry from tariffs that led to $15-20 million of extra costs.
- How? ISRI filed a petition for tariff relief on behalf of the entire industry, but it had been denied apparently on the basis that it failed to demonstrate that 100% of the parts used by the industry were sourced from China. That aside, the U.S. Government’s exclusion application process was open to all, and it was understood that if one applicant receives approval, then all importers would benefit. Thus, several ISRI members submitted individual exclusion applications, and three received approvals on April 15.
- Why it is important: For one year starting on April 18 (when the decision was officially published), wear parts importers will not pay the tariff as long as certain guidelines set out by Customs & Border Protection are followed. That includes reporting the appropriate Chapters 84, 85 & 90 codes as well as HTS 9903.88.07 are indicated on customs forms (your Customs brokers should know what to do!). Also, parts importers are eligible for refunds on duties already paid since they were imposed on July 6, 2018. According to the guidelines, will follow these same procedures (i.e., appropriate coding) when filing a Post Summary Conclusion (PSC) on unliquidated entries and when filing a “protest” on liquidated entries. Refunds are eligible for the importers of record.
- But, but, but: The tariff relief is a reprieve from the tariff war, but the Customs procedures are known to be onerous and time consuming. In the end, it is worth the effort so that parts suppliers and shredder operators can redirect those expenses to other operational needs.
Feel free to contact Adina Renee Adler with any questions. ISRI can provide guidance on policy and the resources to follow through, but your Customs broker is best placed to follow the procedural steps laid out by Customs to both obtain a refund and to ensure no payment of future tariffs.