Tariff Turmoil

USA and Chinese flags on mountain signpost.
Photo credit: iStock.com/Darwel

By Susan Kohn Ross

The last few days have seen some startling developments regarding trade between the U.S. and China. Perhaps none of this is remarkable given the current climate, but trying to keep track has caused untold whiplash!

On May 10, we learned from USTR the timing of the 25% tariff on List 3 was changed. It is now applicable to goods entered on or after June 1, 2019. Given that CBP originally programmed its computer and the 25% on List 3 goods applied so long as the arrival date was May 10 or later, if you get caught in the payment timing cycle of having to pay the 25%, you will want to coordinate with your customs broker to file a Post Summary Correction and seek a 15% refund.

Buried in a Federal Register notice dated May 9, USTR announced it will publish notice of an exclusion process for List 3 goods, but does not tell us when. The general feeling is there was no earlier provision for an exclusion process for List 3 goods because USTR was overwhelmed with exclusion requests for goods on Lists 1 and 2, and that still seems to be the case. The most recent exclusion approvals still relate to List 1 goods, and no decisions about any List 2 goods – yet.

China announced on May 13 in response to the U.S. raising the List 3 tariffs to 25% that effective June 1, it was raising the tariffs on the lists of goods previously announced. At the same time, China also announced it will adopt exclusion measures of its own on goods from the U.S. and Canada. China published four (4) revised product lists, each of which carries its own tariff rate – either which is 25% (List 1), 20% (List 2), 10% (List 3) or 5% (List 4). Here are those lists:

List 1
List 2
List 3
List 4

And then we learned about a U.S. List 4 – this is being discussed in the general press as the remaining goods imported from China not previously hit with a tariff. This action would impose an additional 25% tariff on the goods to be covered – see here. USTR is seeking public comment and will hold public hearings. The relevant schedule is:

June 10, 2019 – Due date for filing requests to appear and a summary of expected testimony at the public hearing.

June 17, 2019 – Due date for submission of written comments.

June 17, 2019 – The Section 301 Committee will hold the public hearing.

In anticipation that hearing may last more than one day, USTR also stated that 7 days after the last day of the public hearing, post-hearing rebuttal comments are due.

In particular, USTR is soliciting comments about:

  • Specific tariff subheadings which should be the subject of the increased duties – whether a subheading should be retained, added or removed;
    • Would imposing the tariff on a particular product be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether imposing the tariff on a particular product would cause disproportionate economic harm to U.S. interests, including small or medium-sized businesses and consumers.
  • The level of the increase, if any, in the tariff rate; and
  • The appropriate aggregate level of trade to be covered by the additional tariffs.

To participate in the hearing process, access www.regulations.gov and reference Docket No. USTR-2019-0004.

MSK remains available to assist companies in navigating the 301 maze. Feel free to contact us with your questions or requests.

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