Potentially Great Impact to Optical as U.S. Begins Process of Assessing China 301 Duties

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ALEXANDRIA, Va.—Eyewear products originating in China could be impacted directly by a proposed fourth tranche of products which could be subject to tariffs. As threatened earlier this week, the U.S., through the Office of the United States Trade Representative, released a proposed fourth tranche of tariff numbers for the special China 301 duties, which will greatly impact the optical industry, The Vision Council reported to its members late yesterday. This fourth tranche includes all remaining tariff numbers not previously subjected to China 301 duties with limited exceptions, and thus captures all optical products that to date have remained outside of the trade war. Lenses, frames, sunglasses, reading glasses and low vision devices originating in China will be subject to additional duties if this fourth tranche is implemented.

The new list must go through the regulatory rule making process, which will give affected parties the opportunity to comment in favor or in opposition of the proposed action. Those comments must be received by June 17, 2019. Additionally, on that date there will be a public hearing on the issue. Those interested in seeking permission to be heard must request approval by June 10.

After the Administration receives the comments and testimony, it will review and decide on the final list of tariff numbers for the additional duties. However, it is expected that few changes will be made to the proposed list. The rate of the additional duty is to be determined at that time, as well, with an estimated 25 percent or less increase to be put into effect.

The Vision Council said it expects that a final fourth list could be implemented as early as the end of June 2019 to correspond with the G20 Summit. Goods entered into the U.S. before that date will avoid the duty increase.

The Vision Council has reached out to related organizations to support comments that The Vision Council will file seeking to exempt its members’ products from this list. The organization said, "We hope a coordinated effort will convey the detrimental impact that tariffs will have on member products, causing price increases to some of the most widely-used medical devices sold in the United States."

The group added, "We want to caution our members who are manufacturing in China that while it might be possible to avoid the China 301 duties by moving some final production into other countries, you should seek professional advice first. The United States Customs and Border Protection’s recent administrative rulings have found that simple assembly in third-party countries of Chinese-origin components into finished goods that are subsequently imported into the U.S. remain subject to the China 301 duties on those components under certain circumstances. To note, any added China 301 duties are assessed in addition to any regular duties already assessed on your imported products."

In the coming weeks, The Vision Council will share sample letters with its membership that can be customized and sent to the United States Trade Representative and elected officials. The Vision Council will keep the membership informed on this topic. Any questions about this issue can be directed to Rick Van Arnam, The Vision Council’s regulatory counsel, at rvanarnam@barnesrichardson.com.