2020 End of Year Update

First, all of us at LHCB thank you for your continued support during this difficult year.  We SINCERELY wish you a Merry Christmas, if you celebrate, otherwise Happy Holidays, and best wishes for a WONDERFUL 2021!  Please note the following programs that were not renewed or extended.

GSP, China exclusions, and special tariffs not renewed (From NCBFAA)

Some provisions the association had hoped for—namely Generalized System of Preferences renewal, China Section 301 tariff exclusion extensions, and the Miscellaneous Tariff Bill—were conspicuously absent. 

Generalized System of Preferences (GSP): Effective Jan. 1, customs brokers will need to obtain and pay duties from importers for merchandise that had been eligible for duty-free treatment from nearly 120 designated beneficiary countries and territories. CBP is expected to issue instructions advising importers, through their customs brokers, to flag GSP-eligible imports with the applicable special program indicator but to pay the appropriate normal trade relations (column 1) duty rates until the trade program’s renewal. Similar previous expirations, the NCBFAA expects that when Congress renews GSP it will provide for retroactive refunds and CBP will automatically refund duties for GSP-eligible goods submitted via ABI.

Section 301 China Tariff Exclusions: Starting Jan. 1, hundreds of the Section 301 China tariff exclusions will expire, requiring importers through their customs brokers to pay the 25% or 7.5% trade remedy tariff, as appropriate, to covered merchandise of China origin. CBP will assess the trade remedy tariffs, in addition to any applicable normal trade relations (column 1) duty rates. Although advocacy efforts persist, at this time the NCBFAA has no clear indication that Congress and the incoming administration will extend these exclusions next year and do so retroactively as a part of a more comprehensive plan to have Congress and the White House to revisit the Section 301 exclusion process altogether.

Miscellaneous Tariff Bill (MTB): All temporary duty suspensions found under Harmonized Tariff Schedule heading 9902 are expected to expire on Jan. 1, requiring importers through their customs brokers to pay the appropriate normal trade relations (column 1) duty rate. The U.S. International Trade Commission issued a report in August 2020 outlining which new or renewed 9902 provisions could be included by Congress, following legal parameters. While not all current 9902 provisions were considered for additional renewal, many were expecting approval and many more new provisions would have been included had Congress acted to pass the MTB. Note that the MTB bill unlikely will include a retroactive provision. Instead, based on previous history, the MTB only will be prospective from the time Congress enacts the law. That said, those companies interested in the MTB and advocating for the legislation to be extended likely will request retroactivity. Although the NCBFAA remains hopeful that the MTB might pass the first or second quarter of 2021, the 2018 MTB was not passed by Congress until the third quarter of the year following expiration of the previously granted duty suspensions.

The NCBFAA expects the trade to take an active role in legislative efforts in 2021 and hope we find momentum with the new Congress and administration to pass tariff relief legislation, including the GSP, section 301 China exclusion extensions, and MTB. Until then, importers will rely on their customs brokers to obtain and provide the required duties to CBP.

Again, Merry Christmas or Happy Holidays, and best wishes for a WONDERFUL 2021! 

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