Dear Valued Customer:

List of Section 301 Tariffs on Certain Imports From China Released by USTR

In our March 22, 2018 edition of The Current, we alerted our customers that President Donald Trump signed the Section 301 tariff action on some $50 – 60 billion of Chinese imports, the first shot in what could become a contentious global trade war. Trump had asked China to immediately reduce the trade surplus by $100 billion. The administration is acting due to practices it says amounts to years of stealing the intellectual property of American companies.

The U.S. Trade Representative (USTR) has released a list of more than 1,000 products that is being targeted. A copy of the list can be found here. As the list currently stands, the 25 percent tariff would be imposed on 1,300 8-digit subheadings in the Harmonized Tariff Schedule. The proposed product list subject to the tariffs includes aerospace, information and communication technology, robotics, machinery, pharmaceuticals, medical devices and optical equipment. Other affected products include antifreeze, rubber tires and tubes, televisions, optical instruments and weapons.

The proposed additional duties of 25% ad valorem on these products from China are to equal an annual trade value commensurate with the harm caused to the U.S. economy resulting from China’s unfair policies. The tariff would be assessed on top of any existing duties. Covered products entered into a Foreign Trade Zone would be required to be admitted as “privileged foreign status”, which would be subject to the tariffs if later entered for consumption.

The Federal Register notice is seeking a 30-day public comment period ending May 22 on the proposed tariff action. USTR said comments on the proposed list should address whether specific products on the list should be retained or removed, or whether products not currently on the list should be added, as well as the level of the increase in the rate of duty and the “appropriate aggregate level of trade to be covered by additional duties.” If requesting inclusion or removal of specific products, comments should address whether the increased duties would cause China to end its technology transfer policies, and whether the tariff would cause “disproportionate economic harm to U.S. interests, including small or medium size businesses and consumers.”

When the comment review analysis process is completed, USTR will announce the final determination on tariff action and will publish the updated product list in the Federal Register. As a result of this administrative process, it is unlikely that these tariffs would take place before June. Meanwhile, a surge of imports for goods on the list can be expected as importers put in rush orders to beat the clock.

As expected, China has announced that it may also impose tariffs on $50 billion worth of U.S. imports, which could include narrow-body and corporate jets, cars, SUVs, soybeans, beef, wheat, whiskey and chemicals. It is uncertain whether tariffs on both sides may be avoided and the USTR may change its target list after comments are received.

James J. Boyle & Co. will continue to monitor developments of the Section 301 measure to keep our customers apprised.

Thank you for your attention and cooperation. If you have any questions, please contact your nearest JJB representative.

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