Senate Approves Anti-China Bill, Includes GSP Renewal and Restart of China Tariff Exclusion Process, Next Steps Unclear
On June 8, the Senate approved the Endless Frontiers Act (S. 1260) by a vote of 68-32. The anti-China legislation includes a provision that would retroactively renew and extend GSP from December 31, 2020 – January 1, 2027, add new eligibility criteria for beneficiary countries, including human rights, women’s economic empowerment, and rule of law, and require regular country eligibility reviews. The fate of the overall anti-China legislation remains uncertain as it moves to consideration in the House. Note that the new eligibility requirements and required review could put into jeopardy GSP benefits for key travel goods suppliers like Myanmar and Cambodia. GSP expired on December 31, 2020, meaning that U.S. travel goods imports from a wide range of developing countries, including Thailand, Cambodia, Burma (Myanmar), Indonesia, Sri Lanka, the Philippines, and Pakistan have paid full duties since January 1, 2021. U.S. Customs and Border Protection (CBP) has issued instructions on how importers can retain the right to collect refunds of duties paid if GSP is retroactively renewed. The legislation would also re-open and fix the TGA-supported China Section 301 tariff exclusion process. Under the previous tariff exclusion process, numerous petitions for travel goods exclusions were seemingly arbitrarily rejected. A re-opening of the process could provide a new opportunity to exclude certain travel goods items from the 25% punitive tariff on U.S. travel goods imports from China. These tariffs are in addition to the normal 17-20% tariffs paid on U.S. travel goods imports from China, leading to an effective tariff rate of around 42-45%.