product exclusion process

U.S. Government Imposes Tariffs on $200 Billion of Goods and China Retaliates on $60 Billion of GoodsEarlier this week, the U.S. Trade Representative (USTR) released a 10 percent tariff on $200 billion in imports from China, including more than 90 tariff lines central to the semiconductor industry.The 10 percent tariff will take effect on September 24, 2018, and rise to 25 percent on January 1. These tariff lines will cost SEMI’s 400 U.S. members tens of millions of dollars annually in additional duties. However, counting the products included in the previous rounds of tariffs, the total estimated impact exceeds $700 million annually. China has already announced that it will respond with tariffs on $60 billion worth of U.S. goods. In his notice, President Trump said the U.S. will impose tariffs on $267 billion worth of goods if China retaliates. The U.S. government removed 279 total tariff lines, including three lines that impact our industry: silicon carbide, tungsten, and network hubs used in the manufacturing process.As we’ve noted, intellectual property is critical to the semiconductor industry, and SEMI strongly supports efforts to better protect valuable IP. However, we believe that these tariffs will ultimately do nothing to address the concerns with China’s trade practices. This sledgehammer approach will introduce significant uncertainty, impose greater costs, and potentially lead to a trade war. This undue harm will ultimately undercut our companies’ ability to sell overseas, which will only stifle innovation and curb U.S. technological leadership.Product Exclusion Process – List 2USTR formally published the details for the product exclusion process for products subject to the List 2 China 301 tariffs (the $16 billion tariff list). If your company’s products are subject to tariffs, you can request an exclusion.In evaluating product exclusion requests, the USTR will consider whether a product is available from a source outside of China, whether the additional duties would cause severe economic harm to the requestor or other U.S. interests, and whether the product is strategically important or related to Chinese industrial programs (such as “Made in China 2025”).The request period ends on December 18, 2018, and approved exclusions will be effective for one year, applying retroactively to August 23, 2018. Because exclusions will be made on a product basis, a particular exclusion will apply to all imports of the product, regardless of whether the importer filed a request.More information, including the process for submitting the product exclusion request and details what information should be included in your submission can be found here. Please let me know if your company plans on filing an exclusion. SEMI has prepared a document that includes guidelines for your exclusion filing, an explainer on how to submit, and links to official government info. SEMI is glad to assist your companies file exclusion requests for your products. SEMI will continue tracking ongoing trade developments. Any SEMI members with questions should contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].

Two months after opposing $34 billion in U.S. trade tariffs on behalf of the U.S. semiconductor manufacturing industry, Jonathan Davis, global vice president of industry advocacy at SEMI, this week spoke out against an additional $16 billion in duties on Chinese goods. Testifying before the same U.S. interagency panel mulling the tariffs, Davis called for the removal of 29 tariff lines covering items critical to semiconductor manufacturing including machines and spare parts used to make, wafers, flat panel displays and masks.In his testimony to the panel, Davis stressed that while SEMI supports stronger protections against the theft of valuable intellectual property (IP), tariffs do little to address U.S. concerns over IP loss. Over the past month, SEMI has also submitted written comments and opposed the tariffs in public testimony. The panel includes representatives from the U.S. Trade Representative (USTR), Departments of Treasury, Commerce, State and Defense, and the Council of Economic Advisers.Also testifying, Joe Pon, corporate vice president at Applied Materials, explained that the proposed tariffs will harm small and midsized companies and other U.S. business interests. Describing the tariffs as a tax on exports of high-value U.S. goods, Pon said the duties give non-U.S. firms an unfair competitive advantage.In a parallel push to Davis’s testimony, SEMI, with more than 10 representatives from six member companies, met with 16 congressional offices this week to underscore the damage the tariffs would wreak on the U.S. semiconductor industry. The fallout would include higher operating costs, fewer exports and slower innovation. The tariffs would also curb industry growth and put thousands of high-paying, high-skill jobs at risk. SEMI pressed congressional leaders to reject the tariffs and support a push for congress to re-assert itself on trade policy.Tariffs to Cost U.S. SEMI Members More than $500 MillionSEMI estimates that the second list of proposed tariffs, covering about $16 billion in Chinese goods, will cost its 400 U.S. members more than $500 million annually in additional duties.The tariffs on $34 billion in Chinese goods, which took effect July 6, impact products such as test and inspection equipment as well as spare parts that enter the U.S. from China. That round of tariffs will cost SEMI member companies and estimated tens of millions of dollars annually. SEMI Public Policy Team Asks Members to Review Tariff ListLooking ahead, SEMI encourages members to review the newly released $200 billion tariff list, determine any impact to their businesses and share their findings with SEMI’s public policy team.The U.S. Trade Representative (USTR) has published the exclusion process for products subject to the China 301 tariffs. If your company’s products are subject to tariffs, you can request an exclusion.In evaluating product exclusion requests, the USTR will consider whether a product is available from a source outside of China, whether the additional duties would cause severe economic harm to the requestor or other U.S. interests, and whether the product is strategically important or related to Chinese industrial programs (such as “Made in China 2025”).The deadline for submitting product exclusion requests to USTR is October 9, 2018. Approved exclusions will be effective for one year upon approval and retroactive to July 6, 2018.More information including the process for submitting the product exclusion request can be found here.Any SEMI members with questions should contact Jay Chittooran, Public Policy Manager at SEMI, at [email protected].