Section 301 is the US trade law under which the United States Trade Representative (USTR) imposed additional tariffs on Chinese-origin goods starting in 2018. The tariffs apply on top of the standard MFN duty rate and are organised into four lists by HS code. For chemical importers, Section 301 has been the single largest cost shock of the past decade, a substance that previously carried a 3.7 percent MFN duty became a 28.7 percent landed cost overnight when its HS code went onto List 3 at 25 percent.
The four lists and current rates
| List | Effective from | Tariff rate (current) | Coverage |
|---|---|---|---|
| List 1 | July 2018 | 25% | USD 34B of industrial inputs |
| List 2 | August 2018 | 25% | USD 16B mostly industrial |
| List 3 | September 2018 | 25% | USD 200B broad coverage |
| List 4A | September 2019 | 7.5% | USD 120B consumer goods |
Many industrial chemicals sit on List 3 (25 percent). Some specialty chemicals and pharmaceutical intermediates were excluded from the lists at various points; many of those exclusions have since expired.
How Section 301 interacts with HS classification
Section 301 is HS-code-specific. An HS code either appears on a list or it does not. Two adjacent HS codes can have wildly different Section 301 outcomes, one at 25 percent, the next at zero. This makes HS classification economically loaded for US imports of Chinese chemicals: a defensible reclassification can save a quarter of the landed cost.
The legitimate version of this is tariff engineering: modify the product (different formulation, different package size, different concentration) so it falls under a different HS code that is not on the Section 301 list. The illegitimate version is misclassification: write a different HS code on the commercial invoice without changing the underlying product. The first is legal and increasingly common; the second is customs fraud and CBP audits aggressively for it.
The exclusion process
Importers can petition USTR for exclusions for specific products. A successful exclusion takes the Section 301 tariff to zero for that product and HS code combination, often with a finite duration. The application must demonstrate that the product is not produced at scale outside China, that the Section 301 tariff causes severe economic harm, and that the exclusion does not undermine the trade-policy intent of Section 301. Most exclusion applications fail. Successful applications create a small window of opportunity that often expires within 12 to 24 months.
Practical sourcing notes
For every US-bound chemical shipment we ship from China, we confirm before booking: the destination HS code (HTSUS 10-digit), whether that code is currently on a Section 301 list, the current tariff rate, and any active exclusion that may apply. The classification is the importer’s responsibility at entry, but flagging the issue at quote stage saves the importer from a USD-tens-of-thousands surprise when the customs broker calculates the landed cost.
If a substance carries an HS code on List 3 at 25 percent, the buyer should consider:
- Sourcing the same substance from a non-Chinese origin where feasible (Korea, India, Vietnam), landed cost may be lower despite higher unit price
- Reformulating to a closer-but-different substance under a different HS code not on the list
- Filing for an exclusion if the use case fits the criteria
- Building the Section 301 tariff into the cost model and proceeding, the most common outcome
Related terms
HS Code classification determines whether Section 301 applies. Anti-Dumping Duty is a separate additional tariff applied to specific producers, often stacking on top of Section 301. Duty Drawback allows recovery of duties, including Section 301, on goods subsequently re-exported.