Effective January 1, 2021 the Generalized System of Preferences renewal, China 301 tariff exclusions and the Miscellaneous Tariff Bill suspensions are due to expire. This will have a tremendous effect on how customs brokers process and clear imports at the start of the year.

Generalized System of Preferences Expiration

Beginning January 1, merchandise that had been previously treated as duty-free from approximately 120 beneficiary countries will require duties be paid by importers. The GSP is the largest and oldest US trade preference program, established by the Trade Act of 1974 to promote economic development by eliminating duties on thousands of products when imported from a beneficiary country or territory.

While the program will most likely be renewed in 2021 and become retroactive back to 1/1/21, CBP is expected to flag GSP-eligible imports and receive duties until the program is renewed.

Section 301 Exclusions

Hundreds of the Section 301 China tariff exclusions will expire on 1/1/21. This will require importers to pay 25% or 7.5% trade tariffs on merchandise from China. There are exceptions with exclusions extended until March and April of 2021 for 32-list 1 exclusions and 8- list 1 exclusions.

Miscellaneous Tariff Bill Expiration

Temporary duty suspensions under the Harmonized Tariff Schedule heading 9902 will expire on 1/1/21. This will require importers to pay normal duty rates. The Miscellaneous Tariff Bill (MTB) is a law that temporarily reduces or suspends the import tariffs paid on particular products imported into the United States. Reinstatement of these temporary duty provisions in 2021 will most likely not be retroactive.

How To Prepare

Mohawk Global is working to get clients’ entries submitted before the end of the year and to lock in vessel arrival dates as entry dates where they occur in 2020. Importers should review their end of year arrivals that are impacted and ensure that they are properly filed to avoid the increases scheduled currently for Jan 1, 2021. If you have further questions, speak with your Mohawk Global representative.

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