Republicans and Democrats on the Senate Finance Committee criticized Commerce Secretary Wilbur Ross on June 20 over the steel and aluminum tariffs and the implementation of granting exclusions for certain imports subject to those tariffs. Democrat Sen. Claire McCaskill, who described a nail maker in her home state of Missouri who is laying off more than half its 500-person workforce as its inputs' cost increases, told him: "it appears to me a chaotic and, frankly, incompetent manner you're picking winners and losers." Only Sen. Sherrod Brown, D-Ohio, asked supportive questions during the hearing on tariffs.
Importers should be reviewing options toward reducing the impact of any of the Section 301 tariffs on goods from China, Baker & McKenzie lawyer Ted Murphy said in a June 19 blog post. President Donald Trump on June 18 announced plans for 10 percent duties on $200 billion worth of goods from China (see 1806180058) if China moves forward on planned retaliations to the initial Section 301 tariffs (see 1806150028). "While there is still time for the two countries to reach a negotiated settlement and avoid a trade war (the first tranche of duties does not go into effect until July 6th), that does not appear likely, at this point," Murphy said.
The Office of the U.S. Trade Representative posted information on submitting public comments on the new list of products proposed for Section 301 tariffs. The notice again lists the products from China that will see new tariffs starting July 6 (see 1806150003) but doesn't spell out the process for requesting product exclusions. Those details will come in a separate notice, USTR said. The agency's notice also "creates a new Chapter 99 subheading for entry purposes (entries of articles classified in the tariff subheadings identified in Annex A have to use the new Chapter 99 classification as a secondary classification, so the additional 25% duty can be assessed) and addresses foreign trade zone admissions," Baker & McKenzie lawyer Ted Murphy said said in a June 18 blog post
International Trade Today is providing readers with some of the top stories for June 11-15 in case they were missed.
Despite repeated lobbying trips from Commerce Secretary Wilbur Ross, the Senate passed a version of the defense authorization bill June 18 that includes an amendment designed to retain the seven-year export ban on Chinese telecommunications equipment manufacturer ZTE. However, the way the amendment is written, the Commerce Department would retain the discretion to allow ZTE to continue importing semiconductors from U.S. sources.
Most of the computer, aviation and automotive, electrical and machinery products that will be hit by tariffs under Section 301 are produced by foreign companies operating in China, according to an updated study from the Peterson Institute for International Economics. The think tank says it aims to do "truth telling about the benefits of globalization" as well as study labor market adjustment due to globalization and how to find a sustainable growth model for mature economies.
The U.S. plans to impose a 10 percent tariff on an additional $200 billion worth of goods from China in response to China's retaliatory tariffs, President Donald Trump said in a June 18 statement. China's decision to implement 25 percent tariffs on $34 billion in U.S. imports, mirroring the Section 301 tariffs, shows China "has no intention of changing its unfair practices related to the acquisition of American intellectual property and technology," said Trump. "The latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage."
The reactions from industry and Capitol Hill on the Section 301 tariffs were largely split along lines previously drawn over the Trump administration's general approach to tariffs. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a news release that while the changes from the initial list of products from China were "encouraging, " he is "alarmed that additional products are now placed on the list for possible future action." Brady called on the Office of the U.S. Trade Representative to "narrow these tariffs and implement an effective exclusion process that provides relief for American companies, unlike the problematic Commerce 232 exclusion process.”
China will implement retaliatory 25 percent tariffs on 545 tariff lines, largely agricultural and auto targets, but also "aquatic products," on July 6, it said in a statement. Like the U.S., it is saving an additional $16 billion in targets in reserve. For China, those will be chemicals, energy imports and medical equipment. For the U.S., semiconductors, plastics, railcars, tractors, cranes and new industrial machinery lines could be in the second phase. China's tariffs are in response to the Section 301 tariffs on imports into the U.S. set to begin July 6 (see 1806150003)
The entire congressional delegation from Washington state sent a letter to the U.S. trade representative, asking him to negotiate a solution with countries facing Section 232 steel and aluminum tariffs, because retaliatory tariffs on apples, cherries, pears and potatoes will cost the state's farmers tens of millions of dollars. The letter talks about cherry sales in China, apple sales in India, China and Mexico, and notes, "With cherry harvest beginning in the Pacific Northwest, time is of the essence for our growers."