While the reasons that Section 301 tariff exclusions were granted are murky to trade lawyers, in general, more information is better when submitting requests, trade lawyers said during a panel at the American Association of Exporters and Importers Annual Conference June 28. Pictures of your product, emails from domestic companies saying they can't provide the quantity you're looking for, and the number of U.S. jobs that are imperiled if you have to pay 25 percent more for this product are all good pieces of information to provide, they said.
CBP has assessed about $27.8 billion in duties under the major trade remedies started during the Trump administration as of June 19, according to CBP's trade statistics page. That includes $19.3 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 $5.8 billion under the Section 232 tariffs on steel and $1.8 billion under tariffs on aluminum. The Section 201 trade remedies on washing machines and solar cells (see 1801230052), imposed Jan. 23, 2018, account for $857.7 million in assessed tariffs.
Rep. Stephanie Murphy, D-Fla., introduced a bill, the Reclaiming Congressional Trade Authority Act of 2019, that would require that any tariffs implemented on national security grounds -- whether through Section 232 or another mechanism, such as the national emergency on immigration -- be approved by Congress. The bill, introduced June 25, would allow tariffs to be in place for 120 days without congressional approval. It has a Senate companion bill, S. 899, introduced by Sen. Tom Carper, D-Del., and Sen. Tim Kaine, D-Va.
International Trade Today is providing readers with some of the top stories for June 17-21 in case they were missed.
House Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., said after a June 25 hearing on Mexican labor reform that the Democrats asking for changes to the NAFTA rewrite are asking for changes that are "relatively narrow." "Our hope is we can move with dispatch, get our concerns resolved, strengthen the agreement and move forward," he said, adding that trade deal votes "never get easy, putting them off."
The “same concerns” that led the Trump administration to remove smartwatches and fitness trackers from the List 3 Section 301 tariffs on Chinese imports in September “continue to apply” with the proposed fourth tranche, commented Fitbit in docket USTR-2019-0004. Imposing 25 percent tariffs would cause Fitbit “significant and unavoidable economic harm," it commented.
Specialty speaker brand SVS Sound is “very serious” about “investigating” the sourcing of finished products from Thailand or the Czech Republic if the List 4 Section 301 tariffs take effect on Chinese imports, but doesn’t yet know of the financial ramifications, CEO Gary Yacoubian said in a June 20 interview. The proposed List 4 tariffs would be “devastating” to SVS because they would affect 100 percent of its product line, Yacoubian commented in docket USTR-2019-0004. Yacoubian previously served as chairman of the Consumer Technology Association, when it was named the Consumer Electronics Association.
The proposed List 4 Section 301 tariffs cover “all of Apple’s major products,” and would harm the company’s “global competitiveness,” the iPhone maker said in heavily redacted comments posted June 20 in docket USTR-2019-0004. “The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by U.S. tariffs,” Apple said. “A U.S. tariff would, therefore, tilt the playing field in favor of our global competitors.” Tariffs also would reduce Apple’s “U.S. economic contribution,” it said. It vowed last year “to make a total direct contribution to the U.S. economy of over $350 billion over 5 years and we are pleased to report that we are on track to achieve this contribution,” the company said in the filing.
The Office of the U.S. Trade Representative will begin accepting exclusion requests for the third tranche of Section 301 tariffs through a new portal on June 30 at noon, the agency said in a notice. The exclusion requests will be due through the portal at exclusions.ustr.gov/ by Sept. 30, with responses due 14 days after the request is posted on the portal, USTR said. Exclusions will be effective going back to Sept. 24, 2018, when the tariffs on $200 billion in goods from China were implemented with a 10 percent tariff.
Despite three rounds of Section 301 tariffs and the threat of a fourth, “very few customers are moving existing production out of China,” CEO Mark Mondello of supply-chain services provider Jabil said on a fiscal year Q3 earnings call June 18. The “deep-rooted, mature supply chain that's foundational to China” has most customers staying put, he said. Many also “don't see a reasonable payback” from shifting sourcing elsewhere, plus “a decent percentage” of their Chinese production is “for final consumption in geographies other than the United States,” he said. Some customers have decided “to ramp some of their new products” in countries of origin other than China, he said. “I think that's really healthy. It's really good for us because it continues to help us balance factories and factory loading.” Mondello wants “things to get settled, and settled as soon as possible, between the U.S. and China,” he said. “If things got really, really bad, either short-term or long-term, I think it's going to be tough on everybody, us included, but let's hope that that doesn't occur.”