China has announced the creation of a tariff exemption program for their domestic industry. This program creates a tool similar to the one adopted by the U.S. Trade Representative's Office for Section 301 tariff exemption requests from U.S. companies. While China's criteria to qualify may make it difficult for some dairy products to be approved, we are providing this information to members for them to evaluate and take action with their buyers as they see fit. 

The new Chinese program will enable Chinese importers and end-users of U.S. imports affected by retaliatory tariffs to apply for an exemption of the added tariffs. To qualify, applicants must provide evidence that they meet one of three criteria:

1. Difficulty finding suitable alternatives from other sources;
2. Financial hardship for the applicant; or
3. Negative structural impact on the industry.

The application window for the first set of tariff exemptions opens on June 3, 2019 and closes on July 5, 2019; this will relate to those products covered by China's first wave of retaliation on July 6, 2018. A second application window for tariff exemptions opens on September 2, 2019 and closes on October 18, 2019; this will relate to those products covered by China's second wave of retaliation on September 18, 2018. Applications should be submitted through the website of the Tariff Policy Research Center, Ministry of Finance: http://gszx.mof.gov.cn.

More information on the procedures for tariff exemption is available here. For current tariff rates on U.S. dairy products, please refer to the China entry from Volume 1 of the Export Guide.

Recommended action: U.S. dairy exporters evaluate the potential of this program and consider contacting their buyers in China to gauge the feasibility of an exemption for the products they are shipping. Please note, USDEC cannot secure exemptions on behalf of its members as the applications must be made by Chinese entities (e.g. importers, buyers, industry associations).

Questions: For technical questions related to the latest Chinese announcement, please reach out to Eddy Fetzer (efetzer@usdec.org).  Jaime Castaneda (jcastaneda@usdec.org) or Shawna Morris (smorris@usdec.org) should be contacted on policy-related matters.