U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin traveled to Shanghai for July 30 and 31 talks on a comprehensive U.S.-China trade deal, the White House said July 30. Vice Premier Liu He and Commerce Minister Zhong Shan led the Chinese delegation, it said. “The two sides discussed topics such as forced technology transfer, intellectual property rights, services, non-tariff barriers, and agriculture.” The Chinese “confirmed their commitment to increase purchases” of U.S. agricultural exports, it said. “The meetings were constructive, and we expect negotiations on an enforceable trade deal to continue” in Washington in early September, it said. The Shanghai meetings were the 12th round of negotiations that started in December, and were the first face-to-face talks between the sides since the negotiations broke down in May over Trump administration allegations that the Chinese reneged on previously agreed-to commitments. Overhanging the talks is the threat that the administration could put the List 4 Section 301 tariffs into effect at any time on virtually all Chinese goods not previously dutied.
International Trade Today is providing readers with some of the top stories for July 22-26 in case they were missed.
U.S. Trade Representative Robert Lighthizer said there's no need for more money for Section 301 exclusion adjudicators, but will assess whether additional funding is necessary as the process continues. He also said "USTR is reviewing various courses of action with respect to whether and how to renew the exclusions granted for Lists 1 and 2" in a newly released written response to one of the chairman's questions stemming from his testimony in June before the Senate Finance Committee.
The Court of International Trade will allow Moen to end its lawsuit over what the company said were misclassified showerheads despite the Department of Justice's objections, CIT said in a July 26 ruling. Moen, which sued CBP in 2015 over the classification of the goods, filed a motion to dismiss because the goods at issue are now subject to the Section 301 25 percent tariffs on imports from China. The DOJ fought the motion because of the already expended time and resources and because Moen will "likely litigate the correct classification of its showerheads if and when goods classifiable under its claimed tariff provision are no longer subject to the 301 duties.”
The Office of the U.S. Trade Representative issued its first set of product exclusions from the second group of Section 301 tariffs on goods from China. Newly exempt from the tariffs are "69 specially prepared product descriptions." The exclusions cover 292 separate requests, according to the notice. The product exclusions apply retroactively to Aug. 23, 2018, the date the second set of tariffs took effect, and will remain in effect until one year after the notice is published.
The Office of the U.S. Trade Representative is publishing its first list of product exclusions from the second tranche of $16 billion in Section 301 tariffs on China (see 1808150016). This list of exclusions includes 69 subsets of tariff numbers in chapters 39, 84, 85, 86, 87 and 90. The new exclusions take effect retroactively from Aug. 23, 2018, when the $16 billion in tariffs originally entered into force, and will remain for one year following publication of USTR’s notice. USTR is creating Harmonized Tariff Schedule subheading 9903.88.12 for the new set of exclusions.
President Donald Trump tweeted in the morning July 26 that the U.S. would "announce a substantial reciprocal action on Macron’s foolishness shortly. I’ve always said American wine is better than French wine!" Trump, who was angry about the digital services tax France put on what he called "our great American technologies companies," reportedly does not drink alcohol. Later in the day, a White House spokesman issued a statement that said: “The United States is extremely disappointed by France’s decision to adopt a digital services tax at the expense of U.S. companies and workers. France’s unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy. It also demonstrates France’s lack of commitment to the ongoing [Organisation for Economic Co-operation and Development (OECD)] negotiations. The Trump Administration has consistently stated that it will not sit idly by and tolerate discrimination against U.S.-based firms. The U.S. Trade Representative has already launched a Section 301 investigation into France’s digital services tax, and the Administration is looking closely at all other policy tools.” Wine was already on the proposed tariff list to compensate for Airbus subsidies (see 1904090031).
President Donald Trump appeared to put the kibosh on Apple’s requests for List 3 Section 301 tariff exclusions on Chinese imports of graphics processing modules, power supplies, heat sinks and a dozen other types of components for the Mac Pro desktop due this fall. Tweeted Trump on July 26: “Apple will not be given Tariff waiver, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!” There are “no other sources” outside China “for this proprietary, Apple-designed component,” Apple said in each of the 15 product exclusion requests it filed July 18, as searchable on the Office of the U.S. Trade Representative public docket. “This product is a component of a consumer electronic device,” Apple said. “It is not strategically important or related to ‘Made in China 2025' or other Chinese industrial programs.” Public responses in support or opposition to the exclusion requests are due Aug. 1, and Apple had few backers among those who weighed in with an opinion as of July 26. “The USTR should not set a harmful precedent of exempting companies from tariffs that move jobs to an overt adversary of the United States,” commented Gregory Lewandowski on Apple’s request for tariff exclusions on Mac Pro graphics processing modules. “This is absolute garbage,” commented Logan Marotz. “We cannot continue to bend to the will of these companies. They knew the possible consequences of their actions by moving their assembly factories over seas. Tough luck, but this is the game they play.” Apple didn’t comment, nor did USTR.
CBP has assessed about $30.9 billion in duties under the major trade remedies started during the Trump administration as of July 24, according to CBP's trade statistics page. That includes $22.1 billion in duties from the Section 301 tariffs on goods from China. The first tranche of Section 301 tariffs took effect on July 6, 2018 (see 1807050033); the second took effect on Aug. 23, 2018 (see 1808070046); and the third, on Sept. 24, 2018 (see 1809240015). CBP also has assessed about $6 billion under the Section 232 tariffs on steel and $1.9 billion under tariffs on aluminum. The Section 201 trade remedies on washing machines, washing machine parts and solar cells (see 1801230052), imposed Jan. 23, 2018, account for $933.2 million in assessed tariffs.
The number of investigations under the Enforce and Protect Act almost doubled in fiscal year 2018, CBP said in its annual report, and the agency was able to issue final determinations for 12 investigations that year; in fiscal year 2017, it finished only one. To conduct EAPA investigations, CBP has traveled to Thailand, Vietnam, China, Malaysia, Cambodia and the Philippines. During the year, it took interim measures in six ongoing EAPA investigations to collect antidumping and countervailing duties. The entire EAPA program prevented the evasion of $50 million in AD/CVD duties during the year, the agency said.