The USTR has granted exemptions that will result in the reimbursement of approximately 42 million dollars: Here’s what you need to know.
US customs is collecting $25 million per month in 301 tariffs from imported bearings alone, and they have been doing so since July 6th 2018. That’s 150 million dollars they have collected in 6 months. Exemptions have been granted for 28% of the bearing imports and with the proper documentation, you can stop paying the tariff now if you qualify. Additionally, all exemptions are retroactive to July 6th, and all qualifying parties are entitled to refunds in the amounts paid. What portion of the $42 million is yours?
So far, in the scope of the 301 tariffs, list 1 (representing $34 billion) has a total of 10,797 overall filed requests for exemption. Of those, 1259 have been denied, 983 have been granted, and 8555 are still under review.
Bearings are a major part of list one and can be broken out in the HTS code 8482. By my calculations, within 8482 only 184 exemption requests have been denied, 408 have been granted, and 344 are still being processed.
While all ball and roller bearings fall under HTS code 8482, within this code there are 55 subcategories of bearings, and all of the granted exemptions fall within 3 (10 digit) HTS subgroups. From these 3 HTS codes we can determine that only radial deep groove ball bearings from 9mm – 100mm have been granted an exemption.
You can form your own opinion as to the methodology behind the government’s review process; however, the only certain aspect of this process is uncertainty. My urgent message to anyone reading this; If you are involved in supplying or importing radial deep grove ball bearings in the mentioned size range, you need to be prepared immediately to supply the correct documentation. Determine which of the 400+ exemptions best suits your situation. Show that your bearings, or the bearings you are importing, are no longer subject to the 25% tariff. Stop paying the tariff as soon as you can because it is unclear under what circumstances you may or may not be able to recover duties once they have been paid.
This poses the question, now that exemptions have been granted and reimbursements are on the table for those who qualify, how will you get your money back?
Unfortunately, for the time being, we are left in the dark. The USTR has not yet released conditions or instructions on how to recover 301 tariffs already paid. The USTR has also not released information on who is eligible for refunds. We do know that granted exemptions are not company specific. Exemptions granted for any single company will benefit anyone importing that same product. Changes are being made and it’s prudent to pay attention to these changes. Whether your company is checking updates daily, or hiring a third party to do so, make sure you don’t miss any reimbursement opportunities.
For an added dimension of complexity, the exemptions were granted in the last week of 2018. The U.S. government is in the midst of the longest shutdown in history. The exemptions will not take effect until 10 days after the U.S. government resumes operations. Regarding trade relations with China, It does appear that President Trump and President Xi are beginning to play nice as more high-level negotiations are scheduled for the end of January. For the time being, it’s US House Speaker Nancy Pelosi and President Trump who are not playing nice, so as of this writing, the government remains shut down.
Author: David Hull is the founder and president of Precision Components, Inc. He is a consultant to multiple hedge funds, several governments, and remains an authority on US antidumping regulations, as well as the outlook of the global bearing industry. For information on Mr. Hull, you can read his BIO on www.pcomponents.com.
Facts and Figures are based on research performed by Precision Components