Of the 140 Harmonized Tariff Schedule subheadings that the Consumer Technology Association urged the Office of the U.S. Trade Representative in its June 17 comments to remove from List 4 Section 301 tariff exposure, the association won 37 deferrals to Dec. 15 in key product areas like smartphones, laptops and tablets and PC monitors when the final lists were released Aug. 13 (see 1908130033). The remaining subheadings face 10 percent tariff exposure when the duties on the newly configured List 4A take effect Sept. 1.
Section 301 (too broad)
Ten comments documents filed by trade groups and companies that would be affected by a digital services tax imposed in France -- as well as one filing by a European think tank -- describe the problems with the tax and the discriminatory intent against U.S. companies. But three of the groups, and one company, told the Office of the U.S. Trade Representative that tariffs on French imports under Section 301 are not the way to fix the problem, while only two individuals called for tariffs as a way to get France to roll back the law.
International Trade Today is providing readers with some of the top stories for Aug. 5-9 in case they were missed.
President Donald Trump said he delayed the imposition of 10 percent Section 301 tariffs on hundreds of Chinese products "for Christmas season, just in case some of the tariffs would have an impact on U.S. customers, which, so far, they've had virtually none. The only impact has been that we've collected almost $60 billion from China -- compliments of China."
The U.S. Trade Representative announced that some goods included on the upcoming list four of Section 301 tariffs, including laptops, computer monitors, cell phones, video game consoles, certain toys and certain items of footwear and clothing, will not face additional 10 percent tariffs until Dec. 15. The announcement said the tariff lines in question would be published on the USTR.gov website later on Aug. 13. The agency also said there will be some products excluded entirely from the new set of tariffs for health, safety, national security or "other factors," and that those tariff lines will also be published later in the day.
The escalating trade rhetoric between the U.S. and China should make all companies “realize (if you have not already) that this is not a temporary dispute and is not likely to be resolved anytime soon,” customs lawyer Ted Murphy with Baker & McKenzie blogged on Aug. 9. “The two sides are doubling down and digging in.” With 2020 elections “inching closer” and China’s 70th birthday of the People's Republic festivities set for October, “the political considerations associated with these events make it less likely that a deal will be reached,” he said. “As a result, companies should be re-examining/re-adjusting their supply chains and pursuing additional Section 301 mitigation strategies,” while taking “a view to the medium/long term,” Murphy said.
In a review of how the domestic industry has or has not been given breathing room to adjust to imports, the International Trade Commission says there has been some improvement in the financial performance of domestic washing machine producers, increased production and employment, and progress in implementing adjustment plans. Imports have declined, and Samsung and LG started production of washers in South Carolina and Tennessee, respectively, though they are having difficulties ramping up.
Businesses would get a reason for their exclusion denials if a bill introduced by Sen. Sheldon Whitehouse, D-R.I., earlier this month becomes law. S. 2362, which has no co-sponsors, would require that an exclusion process be opened before any Section 232 or Section 301 duties went into effect. The Commerce Department and the Office of the U.S. Trade Representative would be required to make determinations within 30 days on each request. In a press release announcing the bill, Whitehouse said: “President Trump’s tariffs are causing enormous uncertainty for Rhode Island companies as they make decisions about adding jobs and investing in research and development. It is the least we can do to put in place a fair, orderly process to determine whether a business qualifies for a tariff waiver.”
The final list of goods subject to the latest round of Section 301 tariffs will likely be out in days, and duties will probably remain in place for the foreseeable future, given the current state of U.S.-China trade negotiations, trade consultant David Trumbull of Agathon Associates said in an Aug. 8 post on his blog Textiles and Trade. “In view of short time before the tariffs are anticipated and the fact that [the Office of the U.S. Trade Representative] has already gathered public comments and testimony and started analysis, that USTR will likely issue the final list 4 within a few days,” he said. “Based on our observations from lists 1 through 3, we believe it unlikely that USTR will remove much from list 4. We also believe that, given the current state of U.S.-China trade talks, which are at the coldest ever, there is little likelihood of averting tariffs, meaning the September 1, 2019, [start] will likely stick. Finally, in view of the way List 3 went from 10% to 25%, we believe that if this trade dispute continues into 2020, there is substantial risk of 25% tariff of list 4,” Trumbull said.
CBP has assessed about $33.4 billion in duties under the major trade remedies started during the Trump administration as of Aug. 7, according to CBP's trade statistics page. That is about an 8 percent increase from the previous update on July 24 (see 1907250020). That includes $24.4 billion in duties from the Section 301 tariffs on goods from China. CBP also has assessed about $6 billion under the Section 232 tariffs on steel and $1.9 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 $962.4 million in assessed tariffs.