Wendy Cutler, former acting deputy U.S. trade representative, says that the first bucket of Section 301 tariffs, the ones tailored to Made in China 2025, worked. Even though Cutler is generally not a fan of tariffs, she said, "I think those succeeded … in getting China to negotiate in earnest."
The International Trade Commission recently released Revision 12 to the 2019 Harmonized Tariff Schedule. Changes in the latest version relate entirely to the imposition of 15 percent Section 301 tariffs on products from China, effective Sept. 1. New U.S. Note 20(r) and U.S. Note 20(s) are added to subchapter III of chapter 99 describing the applicable tariff treatment and HTS subheadings covered by the new tariffs, respectively. New subheading 9903.88.15 is added for goods subject to the new List 4 tariffs.
The U.S. trade representative is telling the World Trade Organization that the case China brought against the U.S. for Section 301 tariffs should be dropped. "China’s decision to launch this dispute is hypocritical. China is currently retaliating against the United States by imposing duties on most U.S. exports -- over $100 billion of trade. China cannot legitimately challenge measures at issue for being 'unilateral' and WTO-inconsistent, while at the same time openly adopting its own unilateral tariff measures in connection with the very same matter."
CBP created Harmonized System Update (HSU) 1915 on Sept. 3, containing 64 Automated Broker Interface records and 12 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes adjustments required by the fourth tranche Section 301 tariffs. Modifications required by the verification of the 2019 HTS and to support Partner Government Agency message set functionality are included as well.
International Trade Today is providing readers with some of the top stories for Aug. 26-30 in case they were missed.
As the 15 percent List 4A Section 301 tariffs took effect Sunday on $52 billion worth of TVs, Bluetooth headphones, smartwatches and other China-sourced consumer tech goods, the Consumer Technology Association marked the development by renewing its call for congressional legislation to rein in presidential authority to wage tariff actions. The U.S. president “does not have unilateral authority on trade,” CTA CEO Gary Shapiro said.
CBP has assessed about $35.9 billion in duties under the major trade remedies started during the Trump administration as of Aug. 28, according to CBP's trade statistics page. That includes $27 billion in duties from the Section 301 tariffs on goods from China. The assessed tariffs under Section 301 will likely start to increase quicker once the planned 15 percent tariffs take effect on Sept. 1 (see 1908270066). CBP also has assessed about $6.1 billion under the Section 232 tariffs on steel and $1.7 billion under tariffs on aluminum. The Section 201 trade remedies on washing machines, washing machine parts and solar cells (see 1801230052), imposed Jan. 23, 2018, account for $1 billion in assessed tariffs.
CBP on Aug. 30 issued new filing instructions for goods subject to Section 301 duties, in light of the 15 percent tariffs set to take effect on Sept. 1. The agency’s CSMS message contains updated information on how to enter goods with subheadings on the first group of fourth tranche products, on which Section 301 duties take effect at 12:01 a.m. EDT on Sept. 1 (see 1908270066). Beginning on Sept. 1, goods included in the first group of the list must be filed under subheading 9903.88.15. Then, effective Dec. 15, tariffs take effect on a second list of goods under subheading 9903.88.16.
Movado Group downgraded its forecast in virtually all metrics for fiscal year 2020 ending Jan. 31, blaming market volatility it sees worsening with the 15 percent List 4A Section 301 tariffs taking effect Sept. 1 on fashion watches and smartwatches imported from China. It's “very early on in the process” to forecast with any precision the impact of the List 4A tariffs taking effect in a few days, CEO Efraim Grinberg said on a fiscal Q2 call. The tariffs will “definitely have an impact, I believe, on U.S. business,” he said. “We will take certain actions in terms of pricing initiatives, in terms of working with our suppliers,” to mitigate the fallout, he said. “Some will have an effect to gross profits.”
Protests in Hong Kong could cut off an escape route importers have been using to avoid Section 301 tariffs, according to a blog post by trade consultant David Trumbull. The 1992 Hong Kong Policy Act “gives Congress and the President, or the President alone by Executive Order, the power to suspend U.S. recognition of the separate Hong Kong Customs Territory if the U.S. determines that Mainland China has suppressed Hong Kong's autonomy,” Trumbull said. “The current tension in Hong Kong, with protesters saying that China is attempting to do just that could trigger President Trump to invoke the Hong Kong Policy Act and subject goods of Hong Kong origin to the Section 301 tariffs,” he said. “Companies relocating production from Mainland China to Hong Kong to avoid the Section 301 tariffs on China are getting the jitters” over concerns that the U.S. could use the law to end Hong Kong’s status as a separate customs territory from China, he said.