U.S. Trade Representative Robert Lighthizer said there will be an exclusion process for the third tranche of Section 301 tariffs on products from China and that the agency has "begun preparations to launch a process by the end of the month." His comment came in written replies submitted in recent weeks to Rep. Suzan DelBene, D-Wash., after a House Ways and Means Committee appearance in February. He had previously argued no exclusions were needed for the 10 percent tariffs despite urging from Congress.
The International Trade Commission recently posted Revision 3 to the 2019 Harmonized Tariff Schedule. The new version includes changes necessary to implement the latest group of exemptions from Section 301 tariffs on certain products from China, as announced by the Office of the U.S. Trade Representative in a notice issued April 18 (see 1904170038). That includes the addition of new subheading 9903.88.07 for goods that qualify for the exemption, as well as new paragraph (j) of Note 20 to subchapter III of chapter 99, which lists goods covered by the new exemptions.
International Trade Today is providing readers with some of the top stories for April 22-26 in case they were missed.
UPS, “like most other U.S. multinationals,” advocates for “fair and balanced trade,” CEO David Abney said on a Q1 earnings call April 25. The China-U.S. trade “uncertainty” is “prompting softer industry forecasts” in the Asia-Pacific region, he said. “We certainly encourage leaders of the two countries to find solutions that support increased two-way trade,” and also “assuring that many U.S. companies have access to export to China,” he said. Some UPS customers “have adjusted their supply chain” to mitigate the higher costs of the Section 301 tariffs and retaliatory Chinese duties, and to “adapt to changing trade dynamics,” he said. China economically “is still strong, maybe not as strong as in previous years,” he said. There are “a lot of developments” taking place in two-way trade between the U.S. and China, but also between “China and the rest of the world,” he said. That “sometimes gets lost in the China-U.S. discussions,” he said. “We think it gives us plenty of opportunities to focus and to apply our strategic imperatives” in e-commerce, he said. “We feel good about the economy for the rest of the year.”
Though the Trump administration postponed indefinitely raising the 10 percent Section 301 tariffs on Chinese goods to 25 percent, iRobot, even “at the 10 percent level,” anticipates incurring $20 million to $25 million in tariff costs for 2019, Chief Financial Officer Alison Dean said on a Q1 earnings call April 24. IRobot argued unsuccessfully last summer for removing duties on the finished vacuum cleaners it imports from China under the 8508.11.00 tariff line on grounds the duties would hurt the company and that robotic vacuums are not an “industrially significant technology in China.”
Tool sets imported from China by the Apex Tool Group can be hit with multiple Section 301 tariffs, CBP said in an April 10 ruling. As was the case in a September 2018 ruling involving Apex (see 1810100040), the tool set is classified based on the article subject to the highest rate of duty under General Rule of Interpretation 1. CBP ruled that the tool sets are dutiable at a 38.9% rate.
The Senate Finance Committee chairman said that both China and the U.S. will step down Section 301 tariffs and the retaliatory tariffs in phases, with each side lifting the tariff at roughly the same time if they believe the other side is complying with a trade deal in good faith. He said the reductions will probably be done in tranches. "Over how long a period of time, I don't know," Sen. Chuck Grassley, R-Iowa, told reporters on a call on April 24. "But there won't be a 100 percent reduction of tariffs on the day the agreement's signed."
International Trade Today is providing readers with some of the top stories for April 15-19 in case they were missed.
Americans for Free Trade -- along with 150 national and regional trade groups -- sent a letter to the White House April 22 saying that all tariffs should end with a China trade deal, and that the enforcement of that deal should "avoid any enforcement mechanism that would trigger future tariffs and result in long-term economic uncertainty." The letter also said that the exclusion process for Section 301 imports should continue, even if those tariffs end at the signing of the agreement. The groups, which include the National Customs Brokers & Forwarders Association of America, said, "American businesses and farmers bearing the burden of the trade war have been told repeatedly by your Administration that they must endure 'short-term pain for long-term gain.' They were promised that tariffs were merely a means to an end, and that all this damage would be worth it. A deal that fails to lift tariffs would represent a broken promise to these hardworking Americans. "
CBP has assessed about $22.6 billion in duties under the major trade remedies started during the Trump administration as of April 10, a CBP spokeswoman said. That includes $15.3 billion in duties from the Section 301 tariffs on goods from China, she said. The first tranche of Section 301 tariffs took effect on July 6, 2018 (see 1807050033); the second took effect on Aug. 23, 2018 (see 1808070046); and the third, on Sept. 24, 2018 (see 1809240015). CBP also has assessed about $5 billion under the Section 232 tariffs on steel and $1.6 billion under tariffs on aluminum as of Oct. 16, 2018, the spokeswoman said. The Section 201 trade remedies on washing machines and solar cells (see 1801230052), imposed Jan. 23, 2018, account for $725 million in assessed tariffs, she said.