As the Office of the U.S. Trade Representative considers which European products to target in retaliation for launch subsidies to Airbus aircraft, it's getting divergent messages from U.S. aerospace interests. Boeing says it's not a time for half-measures or gradual steps, after 15 years of negotiations and legal action at the World Trade Organization. Instead, USTR should put 100 percent tariffs on Airbus planes, wings, tails and fuselages, said the aircraft maker's chief executive for regulatory and legislative affairs, Theodore Austell. He argued that if it's not at 100 percent, "we're unlikely to get their attention."
Only 453 8-digit Harmonized Tariff Schedule subheadings would not be covered by Section 301 tariffs on products from China, should the duties be imposed on the proposed fourth tranche of goods without any changes from the Office of the U.S. Trade Representative’s list. That’s only about 4 percent of the over 11,000 8-digit subheadings in the HTS, with the remainder being subject to tariffs of up to 25 percent.
International Trade Today is providing readers with some of the top stories for May 6-10 in case they were missed.
The top Democrat on the Senate Finance Committee said he thinks China cheats in trade, but that consumers are going to bear the brunt of this confrontation. Sen. Ron Wyden, D-Ore, speaking to International Trade Today in a brief hallway interview May 14, said, "It is really harder and harder to divine this administration's strategy on trade. It's almost wash, rinse and repeat. They threaten something, the financial markets react badly, consumers express concern, then they pull back and start a process and you kind of get the feeling it may just be this way from now until Election Day 2020. I believe deeply in fighting trade cheating. I wrote the Enforce [and Protect] Act. With respect to say, China, I hope the Chinese cave."
Smartphones are the largest of eight classifications of consumer technology products that would bear the biggest brunt of the 25 percent Section 301 tariffs proposed on $300 billion in imports not previously dutied during the U.S.-China trade war, according to the Consumer Technology Association’s top trade strategist. “The import values of the products that hit our members are massive,” emailed Vice President-International Trade Sage Chandler on May 14.
CBP created Harmonized System Update (HSU) 1907 on May 10, containing 43 Automated Broker Interface records and 10 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes adjustments required by the Office of the U.S. Trade Representative's announcement of increased tariffs on goods from China (see 1905100015). The update also includes the new exemptions from Section 301 tariffs on China (see 1905100034). Modifications required by the verification of the 2019 HTS are included as well.
Trade Partnership Worldwide President Laura Baughman stands by her organization’s February survey report that found levying Section 301 tariffs on all remaining $300 billion in Chinese imports in addition to other sanctions in effect would cause severe U.S. economic harm, she said in an email. President Donald Trump's chief economic adviser Larry Kudlow, in a Fox News Sunday appearance May 12, called the study flawed. He tried to make the case that any economic "consequences" would be "modest" and well worth it.
President Donald Trump started May 13 threatening China that if it retaliates against the latest U.S. Section 301 tariffs, "it will only get worse!" but late in the afternoon reminded White House reporters that he'd be meeting with President Xi Jinping at the G-20, and, he added, "that will be probably a very fruitful meeting."
The Office of the U.S. Trade Representative has published a list of "essentially all products not currently covered" by Section 301 tariffs, with the exception of pharmaceuticals, certain chemicals made into prescription drugs, rare earth minerals and critical minerals. The office is seeking public comment on hiking tariffs on these goods, which represented approximately $300 billion in imports last year.
GoPro remains "on track" to begin "ramping" its "U.S.-bound" action-camera production this quarter in Guadalajara, Mexico, as a proactive hedge against possible future Section 301 tariffs on Chinese goods, Chief Financial Officer Brian McGee said on a Q1 earnings call May 9. GoPro has no current exposure to the three rounds of tariffs imposed since July, but wanted protection anyway against new duties, he said. Guadalajara's production ramp will "support" U.S. sales beginning in Q3, McGee said. "We expect most of our U.S.-bound cameras will be in production in Mexico in the second half of 2019." GoPro's decision to shift production from China to Mexico for most cameras destined for U.S. import "supports our goal to insulate us against possible tariffs, as well as recognize some cost-saving and efficiencies," he said. GoPro says it's keeping production of non-U.S. cameras in China because it's an important strategic hub and the Chinese consumer market loves the product.