Tariffs

Tariff Turmoil Gets Hotter!

birds eye view photo of freight containers

Photo by Tom Fisk on Pexels.com

By Susan Kohn Ross

As has been widely reported, on Friday, first President Trump announced and then USTR Lighthizer confirmed the 301 tariffs on goods out of China will increase. Specifically, the tariffs on the goods on Lists 1, 2 and 3 will rise from 25% to 30% starting October 1, 2019, while the tariffs on the List 4 products will start at 15% on September 1, 2019 or December 15, 2019, rather than the original 10%, depending on whether your product is on List 4A or List 4B. USTR also acknowledged there will be a notice and comment period provided in the Federal Register notice to follow. While no doubt many American traders hope the possibility exists to remove products from any of the lists, that seems highly unlikely. While this upheaval continues, companies should also keep in mind the ability to seek exclusions for goods on List 3 expires on September 30, 2019. The exclusion process for goods on List 4 has still not been published. (more…)

China Tariff Update: List 4, Next Steps

Truck in port

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By Susan Kohn Ross

While the Federal Register notice containing all the relevant details has yet to be published, today, the U.S. Trade Representative published an announcement confirming that certain unidentified products were removed from List 4 for health, safety, national security and similar reasons, and those remaining would be rolled out on two different lists with two different effective dates. List 4A will be effective September 1, 2019 and can be found here. List 4B can be found here, and will be effective on December 15, 2019. USTR notes the products on List 4B include “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.” Given the contents of List 4B, one is left to wonder whether USTR was trying to avoid making Christmas too grim for American consumers! (more…)

China 301 List 3 Exclusion Process Announced

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By Susan Kohn Ross

 

In the June 20, 2019 pre-publication edition of the Federal Register, the U.S. Trade Representative announced the long awaited process for seeking exclusions for goods on List 3, the one which recently went from 10% to 25%. While the exclusion process itself generally mirrors the process applied to those goods on Lists 1 and 2, there are a few differences, but let’s start at the beginning.

Any exclusion request for List 3 goods must be filed between June 30 and September 30, 2019. The request must be filed through the portal: http://exclusions.ustr.gov (active beginning June 30, 2019). One new wrinkle is parties must register in the portal before filing. (more…)

Tariff Turbulence Continues to Fly!

USA Mexico Trade War

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By Susan Kohn Ross

Putting all the hyperbole and posturing to one side, the recent agreement between Mexico and the U.S. which averted the tariffs can be found in the U.S. – Mexico Joint Statement released June 7, 2019. It consists of a few broad policy statements:

  1. Mexico will deploy its National Guard throughout Mexico, giving priority to its southern border – meaning the border with Guatemala;
  2. Mexico will take “decisive” action to dismantle human smuggling and trafficking organizations and their illicit financial and transportation networks;
  3. The U.S. and Mexico will strengthen bilateral cooperation, including information sharing and coordinated actions to better “protect” and “secure” their common border;
  4. The U.S. will immediately expand the existing Migrant Protection Protocols so that those crossing into the U.S. to seek asylum will be “rapidly” returned to Mexico where they “may” await adjudication of their asylum claims;
  5. Mexico agrees to “authorize” the entrance of those individuals for humanitarian reasons, in compliance with its international obligations, while they await adjudication of their claims;
  6. Mexico will offer jobs, healthcare and education to those individuals according to its principles; and
  7. The U.S. commits to “work to accelerate” the adjudication of asylum claims and “conclude removal proceedings as expeditiously as possible.”

(more…)

Trade Trouble – East, West and South, but North is Settled for Now!

Container Ship Enroute to Port

Photo credit: iStock.com/Darwin Brandis

By Susan Kohn Ross

Agriculture Secretary Perdue recently stated the trade damages to be addressed in a new round of farm aid is $15 to $20 billion! The general press is replete with stories about how, as these tariffs continue, companies are making sourcing changes that will be hard to reverse. So, what is the latest news?

First, there is trade with China. It seems clear that unless there is a breakthrough at the G-20 meeting in Tokyo, or shortly thereafter, the anecdotal headaches we hear about will get far more costly. The American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai conducted a survey before List 3 was announced. Even at that point, American companies operating in China acknowledged higher production costs, decreased demand for products, reduced staffing, reduced profits, increased inspections at importation, increased bureaucratic oversight and regulatory scrutiny, slower approval of licenses and permits, higher product rejections, and increasing plans to relocate (but not back to the U.S.). (more…)

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. (more…)

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…” (more…)

No Further Shutdown; List 3 Exclusion Process Coming

USA and Chinese flags on mountain signpost.

Photo credit: iStock.com/Darwel

By Susan Kohn Ross

The Consolidated Appropriations Act of 2019 was signed into law on Friday, February 15, 2019, so the potential for another shutdown was averted, but there was a hidden gem buried in a related document. This new law contains a specific appropriation for the U.S. Trade Representative’s office which reads: “For necessary expenses of the Office of the United States Trade Representative, … $53,000,000, …” (more…)

China Tariffs – List 3 Finalized and Taking Effect

Economic trade war between USA and China

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In this video blog, MSK Partner & International Trade Practice Chair Susan Kohn Ross covers the latest developments with the 301 tariffs. 

At the end of the day on September 17, 2018, the U.S. Trade Representative issued notice that List 3 of the China tariffs has been finalized and takes effect with a 10% tariff on September 24, 2018. If “sufficient” progress is not made with the Chinese as defined by the Trump Administration, that tariff rate will rise to 25% on January 1, 2019. List 3 is the list containing products worth $200 billion.

The USTR announcement can be found here. The original list of products was 6,031. The final list was reduced to 5,745 and can be found here.

To no one’s surprise, the Chinese immediately announced their own retaliatory action and those details can be found here. (more…)

China 301 List 2 – Effective August 23, 2018

USA and Chinese flags on mountain signpost.

Photo credit: iStock.com/Darwel

By Susan Kohn Ross

USTR Lighthizer yesterday published notice that the 25% tariff on goods appearing on List 2 will become effective on August 23, 2018. For those who wonder if filing comments makes a difference, the answer is yes! In his announcement, USTR Lighthizer made the point the list dropped from 284 to 279 tariff items based on testimony and comments which had been received. None of this, of course, helps those companies which are taking a serious financial hit from these tariffs, but then once the official notice is published in the Federal Register, an exclusion request will be included, and so companies should be gearing up to do two things: (more…)