Pier 1 Imports does not expect major ramifications from proposed 10 percent Section 301 tariffs on a wide range of goods from China (see 1807110050), the company said in a news release. "Consistent with recent years, approximately 59% of the Company’s fiscal 2019 net sales are expected to be derived from merchandise produced in China," the company said. "Of that amount, approximately half is expected to consist of product classes subject to the proposed tariff." While Pier 1 is looking at "strategies to mitigate the impact of the proposed tariff, including collaborative efforts with its vendor partners," it "does not expect financial results in fiscal 2019 to be materially affected," the company said. Still "there can be no assurance as to the final scope of the proposed tariff or the course or timing of trade negotiations," it said.
The top Democrat on the House Ways and Means Committee's Subcommittee on Trade is trying to force the administration to disclose information about its decision-making process on tariffs. Rep. Bill Pascrell, D-N.J., would have to get the House Speaker to bring the resolution up for a vote, in addition to securing a majority vote. The resolution asks for documents, spreadsheets and slide presentations that explain why the president chose a global 25 percent tariff on steel after the Commerce Department gave a global 24 percent tariff as one option, and why he made the aluminum tariff 10 percent, rather than 7.7 percent, as laid out by Commerce. It also asks for information on how the administration intends to help exporters hurt in the trade war, and its strategy on resolving the problems laid out in the Section 301 report, either through multilateral action or through negotiations with China.
The chemicals industry deserves to be spared from a $16 billion tranche of Section 301 tariffs, Ed Brzytwa, the director of international trade for the American Chemistry Council, said during a July 25 hearing on the tariffs. After testimony from more than a half-dozen businesses that import, manufacture or use imported chemical inputs, he explained that the U.S. chemicals industry has a cost advantage over China now because of cheap natural gas. Because China imports more than $5 billion a year in chemical compounds and plastics from the U.S., the industry's a natural target for retaliation. That -- paired with the fact that many chemical and plastic manufacturers need Chinese inputs -- means that putting chemicals on the list is doubly painful.
Temporary import bonds (TIBs) are allowed for goods subject to the Section 301 tariffs, CBP said in a list of frequently asked questions on the tariffs that took effect on July 6 (see 1807060012). "Any bond posted must be sufficient to cover all relevant duties, taxes, etc., including Section 301 duties," the agency said. Many of the other questions listed were previously addressed during a July 5 call with CBP officials about the tariffs (see 1807050033), a notice in the June 20 Federal Register (see 1806190060), or elsewhere (see 1807160027). Among the issues discussed in the FAQs are submitting entries using Chapter 98 provisions, duty calculation timing for TIBs and foreign-trade zones.
International Trade Today is providing readers with some of the top stories for July 16-20 in case they were missed.
The Consumer Technology Association wants the Office of the U.S. Trade Representative to remove 54 tariff lines from the list of imports from China targeted for a second tranche of 25 percent Trade Act Section 301 duties, said Sage Chandler, vice president-international trade, in comments filed July 23 in docket USTR-2018-0018. Chandler also testified at the USTR’s public hearing on July 24. The 54 tariff lines were well more than double the 22 Harmonized Tariff Schedule product codes that Chandler said CTA members had identified nearly four weeks ago for exclusion from the new list of duties (see 1807100025). Tariffs on the proposed products “will harm the very industries they seek to protect, all while failing to influence China's behavior or help the administration's stated goal of eliminating China’s discriminatory trade practices,” Chandler said in her latest comments.
More than 20 businesses and trade groups -- the first set of more than 80 scheduled to testify -- told the Section 301 investigation panel on July 24 that including their imports on the tariff list of $16 billion in Chinese products will lead to higher consumer prices, lower profits, abandoned expansion plans or worse. For Jane Hardy, CEO of Brinly-Hardy Company in Kentucky, having Harmonized Tariff Schedule heading 8432.4200, fertilizer spreaders, added to the list is an existential threat. With the tariff on steel, her family-owned company, founded in 1839, began paying 25 percent to 37 percent more for the metal, even though she'd always bought domestic steel. Then, with the first tranche of Section 301, Chinese wheels and hardware that her Indiana factory uses as it builds equipment were taxed at 25 percent.
Though Hasbro products have escaped three rounds of Trade Act Section 301 tariffs implemented or proposed on Chinese goods, the toymaker is talking with the Trump administration and its congressional delegations “to ensure we’re communicating just how terrible an impact an ongoing tariff or trade war” would have on the company and the U.S. economy, CEO Brian Goldner said on a July 23 earnings call. “Thus far we’ve only seen non-material changes to the tariff schemes of other countries that don’t really impact our business,” he said. Hasbro’s toy business “has not been part” of Section 301 duties that took effect July 6, “but we continue to monitor the situation,” he said. “We continue to talk and firmly believe in a free-trade environment as the best course for our company and for the industry.” Hasbro sources about 65 percent of its product in revenue terms from China, but “we’re moving more production outside China,” Goldner said. “We found some great new partners and territories that provide very-high-quality product that can meet with our specifications,” he said. Hasbro also draws about 25 percent of its U.S. revenue from products sourced from manufacturing sites it runs in five states, Goldner said.
Consumer electronics wearables will be one of six categories of sports and activity gear included in a “global product labeling database” that the Sports & Fitness Industry Association and the World Federation of the Sporting Goods Industry will partner on in about a month, said Alli Schulman, SFIA coordinator-communications and marketing, on a July 18 webinar to mobilize member company opposition to proposed 10 percent Trade Act Section 301 tariffs on sports equipment and accessories (see 1807190003). The database will “provide labeling requirements for 49 countries around the world." More details will be disclosed in an SFIA webinar Aug. 2, she said.
Goods under the $800 de minimis level are not subject to Section 232 tariffs, a CBP spokesperson said July 18. CBP previously said that tariffs don't apply to de minimis shipments covered under the Section 301 tariffs (see 1807050033). The agency recently ruled against the use of foreign-trade zones to get around limits on de minimis entries (see 1807180022).