June 15, 2018

Dear Valued Customer:

USTR Announces Section 301 Tariffs on Chinese Imports Effective July 6

Today the U.S. Trade Representative (USTR) posted an announcement stating that 25% tariffs on $34 billion worth of goods from China will go forward and released a final list of covered products. The tariffs will be implemented beginning on July 6, 2018.

President Donald Trump signed the Section 301 tariff action on Chinese imports due to practices amounting to years of stealing the intellectual property of American companies.

This list was compiled based on extensive interagency analysis and a thorough examination of comments and testimony from interested parties. It generally focuses on products from industrial sectors that contribute to or benefit from the “Made in China 2025” industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles. The list does not include goods commonly purchased by American consumers such as cellular telephones or televisions.

This list of products consists of two sets of U.S tariff lines. The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China. USTR has determined to impose an additional duty of 25 percent on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on July 6, 2018.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the “Made in China 2025” industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

The USTR states that they will issue a notice in the Federal Register within the next few weeks with details of an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action.

If your firm imports any products classifiable under the list of products subject to Section 301 duties, we recommend that for any shipments arriving into the first U.S. port of unlading on or before July 5, Customs entries should be pre-filed if possible with a request for an Elected Entry Date of the actual date of arrival of the vessel in order to secure the current lower tariff rate.

For shipments arriving on or after July 6, your options may include (a) payment of the 25% additional duties, (b) immediate re-exportation under bond or transfer the merchandise in-bond to Canada or Mexico instead of filing a consumption entry in the USA, or (c) place the merchandise in a bonded warehouse or Foreign Trade Zone in privileged foreign status. At the time of this writing, it is unclear as to whether any duty drawback will be allowed.

 

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

 

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