Publishers are currently fighting something of a rearguard action to exclude books from tariffs that were imposed September 1, even as a December 15 deadline looms on a new tariff affecting books not covered by the earlier round.
Under U.S. trade representative rules, an “exclusion process” begins a few months after tariffs are implemented on a group of products. That means that publishers whose books are currently under the tariff have from October 31 to January 31 to request that their books be excluded.
If the USTR grants an exclusion for a particular group of titles, that exclusion will apply to all books within the category from any publisher. (In USTR-ese: “Requesters may submit a range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.”) If an exclusion is granted, any duties that have been paid will be refunded retroactive to September 1. Exclusions stay in place for one year, beginning on the date the tariff went into effect.
Publishers seeking exclusions can apply via the USTR portal (exclusions.ustr.gov) and address a series of questions about why each product group should be exempt from the tariff. Among the primary areas the USTR will examine are: whether the product is available from the U.S. or a third country, and if not, why China is the only viable option for production; whether the industry/company is looking at options other than China, and if so, what the time frame necessary to reroute supply chains would be; and whether the tariff causes severe economic harm to the requesting party or its customers.
Children’s publishers have already made it clear that, for their picture books, Chinese manufacturers are by far the most efficient—and in some cases the only—printing option. Publishers of Bibles and other religious books made a similar case; those books are not subject to the current tariff, nor will they be hit with the December 15 tariff.
Once a publisher applies for an exclusion, interested parties have 14 days to use the USTR portal to support or object to the request. The requesting publisher then has seven days to reply to any responses filed. USTR will respond to the requests “on a rolling basis.”
With the exception of children’s picture books, coloring books, and drawing books (category 4903), all other books—trade, educational, and professional—printed in China are subject to the September tariff. Ray Ambriano of Meadows Wye & Co., an international logistics company specializing in the publishing industry, said it is worth the time for publishers to apply for exclusions, even though he believes they face an uphill battle. Books affected by the tariff are on list 4A and Ambriano explained that exclusions were granted for some products on earlier lists, but exclusions have become fewer as the process has rolled on. “If you believe the USTR wants to enforce these tariffs to fully impact China, they can’t exclude too much,” he said.
The book category faces a particular problem, as different types of books fall under different classifications. Although most adult books have the 4901 designation, there are subclassifications to consider: a hardcover novel, Ambriano explained, would fall under 4901.99.00.70, whereas technical, scientific, and professional books are classified under 4901.99.00.50. If only TSP titles were excluded, it would be difficult for importers to determine how customs officials would decide, for example, if a book on architectural design could be defined as a technical book, Ambriano explained. Any partial exclusion, he added, would cause confusion and create an enforcement and compliance nightmare.
The exclusion for the children’s books group is due to expire on December 15, barring any developments in the U.S.-China trade war that cause President Trump to change his mind about enforcing the new tariffs. As the questions over tariffs remain, the AAP indicated that it continues to represent and advise its members in ongoing U.S.-China tariff actions with respect to the upcoming deadline as well as filings from AAP and members companies themselves. For his part, Ambriano is advising clients not to hold up shipments; books that ship from China by November 25 should make it to Los Angeles before December 15, he said. If the tariffs do take effect on December 15, the exclusion process for children’s books will likely begin in late January