The Office of the U.S Trade Representative issued some new product exclusions from Section 301 tariffs on the third list of products from China, according to a pre-publication copy of a notice posted to the agency’s website Nov. 26. The product exclusions apply retroactively to Sept. 24, 2018, the date the tariffs on the third list took effect, and will remain in effect until Aug. 7, 2020. New subheading 9903.88.35 will be used for these products.
The Office of the U.S. Trade Representative issued a new set of product exclusions from the 25 percent Section 301 tariffs on goods from China. The exclusions include products from the third list of Section 301 goods. The new exclusions "are reflected in 32 specially prepared product descriptions, which cover 39 separate exclusion requests," according to the notice.
IRobot started making some models of its Roomba vacuum line in Malaysia as part of an effort to shift away from China, the company said in a Nov. 21 news release. “Establishing manufacturing operations in Malaysia is a fundamental component in our initiative to diversify iRobot's manufacturing and supply chain capabilities, while also mitigating our exposure to current and prospective tariffs on products that are imported from China," said Colin Angle, CEO at iRobot. The company previously announced the plans to begin a production line in Malaysia (see 1910230027).
The silence from the White House on auto tariffs and a Court of International Trade ruling on 50 percent tariffs on Turkish steel (see 1911180013) has left some trade lawyers wondering whether the window has closed to levy Section 232 tariffs on European cars. The panel of judges said that the law “cabins the President's power" procedurally, because of its deadlines. The Trump administration missed its deadline of Nov. 14 last week.
Consumer electronics company Sonos forecasts a $30 million blow to fiscal year 2020 profits, resulting from the 15 percent Section 301 List 4A tariffs that took effect Sept. 1, Chief Financial Officer Brittany Bagley said on a Q4 call Nov. 21. Most of the impact will be in the holiday quarter, she said. Citing “frequent speculation” about trade negotiations, Bagley said, “We are assuming for the purposes of this call that this remains in effect for the full year at 15 percent.” To mitigate tariff exposure, the company is diversifying its supply chain out of China and has accelerated production of U.S.-bound products in Malaysia. That capacity is “ramping up quickly, and we believe we will have largely eliminated the go-forward impact of tariffs by the end of the fiscal year,” Bagley said.
When the Ways and Means Trade Subcommittee held a hearing on the U.S.-Japan mini-deal, the Office of the U.S. Trade Representative declined to send anyone to testify. Rep. Ron Kind, D-Wis., one of the biggest boosters of free trade in the Democratic caucus, said that absence represents “the disdain the current administration has" for Congress, and its role in setting trade policy. He predicted that "this will have serious ramifications for the next time" Congress has a vote on fast-track authority.
CBP added on Nov. 13 the ability in ACE for importers to file entries with recently excluded goods in the third tranche of Section 301 tariffs, it said in a CSMS message. Filers of imported products that were granted an exclusion (see 1911080003) should report the regular Chapters 39, 42, 44, 48, 50, 54, 60, 73, 82, 83, 84, 85, 87, 90 and 94 Harmonized Tariff Schedule number, as well as subheading 9903.88.34, CBP said in the message. “Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when” subheading 9903.88.34 is submitted, CBP said.
The trade war that President Donald Trump began with China 16 months ago is creating pain for businesses, but there's a deeper strategic mistake to consider, said Matthew Goodman, senior vice president for Asian economics at the Center for Strategic and International Studies. Goodman, who was speaking during the first session in a Congressional Trade Series on Nov. 19, said, “I still don't know what the basic strategic goal is here." He said he didn't know whether the administration wants to get structural changes to China's economy, as it claims, or whether it wants to reduce the bilateral trade deficit, or to contain China's rise.
International Trade Today is providing readers with some of the top stories for Nov. 12-15 in case they were missed.
Importers of goods from the European Union need to be particularly careful about the complicated web of country coverage and exceptions under Section 301 tariffs that began in October, according to KPMG trade consultants speaking during a webinar on Nov. 19. The structure of the new tariffs creates opportunities for duty savings in the form of tariff engineering, shifting supply chains and taking advantage of narrow carve-outs.