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PESA Modified Exclusion Highlights Trade Obstacles

PESA is pleased to announce USTR has clarified the language of a previously granted exclusion request USTR-2018-0025-6591. The approved exclusion covers the following:

(94) Centrifugal pumps, submersible, designed for use in artificial lift systems for extracting oil and gas (described in statistical reporting number 8413.70.2004)

The exclusion applies retroactively to July 6, 2018 and is valid until October 2, 2020.

MODIFICATION REMOVES CONFUSION
For several PESA Member Companies who were granted exclusions requests, issues arose after the Federal Register used modified subheading descriptions and were not able to use exclusions previously granted. The codes that the U.S. Trade Representative (USTR) publishes in the Federal Register are the final description that Customs and Border Patrol (CPB) uses in order to apply the exclusion.

Therefore it is important for Member Companies to determine if their imported products are covered by the exclusionary description in the notice and classified in the corresponding subheading.

The product exclusion process allows individual companies or trade organizations to file requests for particular products to be exempted from additional duties. Many PESA Members have requested exclusions on products they import from qualified foreign suppliers and therefore subject to tariffs. After organizing and submitting product exclusions on behalf of Members, PESA was granted six different exclusions, providing relief for many Members and other U.S. businesses.

However, the Wall Street Journal reported that USTR has tens of thousand requests pending and of the third round, only 3% have been granted. This is a sharp decrease from the 35% of exclusions that were granted during the first and second round of tariffs. USTR also estimated that each exclusion request submission requires 2.5 staff hours in order to evaluate.

The imposed tariffs will remain in effect despite the January 15 trade deal with China, although the percentages were lowered in some cases.

PESA will continue to help our Member Companies navigate this complex process and advocate against these types of tariffs. If your company has questions about the exclusions or renewals process, please contact Tim Tarpley, Vice President Government Affairs.