The Roller Coaster Ride Continues

Tariff, Taxes on Imported Goods

Photo credit: iStock.com/Olivier Le Moal

By Susan Kohn Ross

In yesterday’s “Talking Trade” Periscope broadcast, we made the point that the wording in the China 301 tariff notice left confusion which needed to be cleared up, and now, it has been. As is common knowledge, the 10% tariff on the goods on List 3 or Traunch 3 went up to 25% at 12:01 a.m. on May 10, 2019. How this applies is, however, a bit more nuanced. The Federal Register Notice reads: “Effective with respect to goods (i) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, and (ii) exported to the United States on or after May 10, 2019…”

The first question on everyone’s mind was does the 25% apply to goods based strictly on import date or on the combination of import and export date, and the latter turns out to be correct. So, importers will have a small additional period of time in which to import goods and legitimately avoid the 25% rate.

CBP had already reprogrammed its computer and so goods with an arrival date of May 10, 2019 or later were going to be assessed the 25%, subject to later refund. However, CBP has updated its programming, and this morning in CSMS 19-000238 announced that if the goods were exported from China prior to May 10, 2019, only the 10% need be paid.

Stay tuned as the negotiations between China and the U.S. continue. We are also awaiting news about an exclusion process for the List 3 goods and the publication of a List 4 for comment.

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