About 83 percent of respondents to a United States Fashion Industry Association survey say they'll reduce the amount of apparel they source from China in the next two years -- a strong increase from the 67 percent who said they planned to do that last year. But given that only 6.7 percent said their reductions in Chinese sourcing would be significant, it appears that Section 301 -- and the uncertainty of whether more apparel will be affected -- has had somewhat muted effects on the industry.
Section 301 (too broad)
CBP created Harmonized System Update (HSU) 1913 on July 21, containing 113 Automated Broker Interface records and 23 Harmonized Tariff Schedule record, it said in a CSMS message. The update includes adjustments required by the Office of the U.S. Trade Representative's announcement of new exemptions from Section 301 tariffs on China (see 1907080008). Modifications required by the verification of the 2019 HTS are included as well.
China believes that trade “frictions” with the U.S. “should be resolved through dialogue and consultation,” a Foreign Affairs Ministry spokesperson said on July 17. He was asked about President Donald Trump’s July 16 Cabinet meeting remarks that the U.S. has a “long way to go” before reaching a trade deal with China and can still impose the threatened List 4 Section 301 tariffs on $325 billion worth of Chinese goods “if we want.” If the U.S. “thinks there is still a long way to go before a deal is concluded, well, as the Chinese saying goes, a journey of a thousand miles begins with a single step,” the spokesperson said. “No matter how long the way is, as long as you step forward, you will eventually reach the destination.” In the face of the U.S. threat to impose the List 4 duties, “China will firmly defend its own interests,” the spokesperson said. “If the U.S. does impose new tariffs, that will indeed set new obstacles for the trade talks. There will be an even longer way to go before reaching a deal.”
There’s no question China “has engaged in unfair trade practices such as forced technology transfer and intellectual property theft,” Sen. Dianne Feinstein, D-Calif., wrote to U.S. Trade Representative Robert Lighthizer June 17, as posted July 16 in docket USTR-2019-0004. “The question is whether the broad-based tariffs imposed and proposed by the current administration are the right approach to addressing such issues,” Feinstein said. “They are not.” The Section 301 tariffs on Chinese imports “threaten U.S. jobs and businesses, including so many of those in California that rely on international trade,” she said. “The ports of Los Angeles and Long Beach, which handle nearly half of the container trade with China, have seen the flow of goods slowed due to the tariffs and the uncertainty surrounding them.” Feinstein has heard from “numerous” California companies “about the pain the tariffs are causing them,” she said. The tariffs are “disrupting their supply chains and raising their costs of doing business in ways that damage their competitiveness and in some cases, threaten their existence,” she said. The “primary impact” of the proposed List 3 tariffs “will be to damage our own citizens, businesses, and economy,” she said. “I urge you to pursue alternative approaches to address real trade issues with China.” Three rounds of 25 percent tariffs remain in effect on roughly $250 billion worth of Chinese imports. President Donald Trump last month delayed putting the threatened List 4 duties into effect on virtually all remaining Chinese goods as the U.S. and China try to restart talks toward a comprehensive trade deal (see 1906290001).
International Trade Today is providing readers with some of the top stories for July 8-12 in case they were missed.
The country of origin for watches is largely based upon where the watch "movement" is produced, but the origin of watch bands and cases is determined by whether the assembly is completed in the same country where the movement was made, CBP said in a June 25 ruling. Seiko Watch of America, through Ernst & Young, asked CBP to rule on how the company should declare country of origin in four scenarios and whether Section 301 duties might apply. CBP found that only in one of the scenarios would the proposed fourth list of Section 301 tariffs not apply.
Freshman Democrat Stephanie Murphy of Florida is already making a name for herself on trade, both during House Ways and Means Committee hearings and through leading an effort to restrict the administration's ability to levy tariffs on national security grounds without congressional approval.
In order to get back in America's good graces, India needs to do more than open its market to American dairy and pay medical device companies fairly, according to Jeffrey Gerrish, deputy U.S. trade representative. Those were the trade irritants that led to India's suspension from the Generalized System of Preferences, but at a U.S. India Strategic Partnership Forum leadership summit event July 11, Gerrish said the two countries need to "move beyond" the issues behind the GSP review to a more comprehensive reckoning.
For firms or trade groups that wish to testify on the Section 301 investigation into France's Digital Services Tax, they should file a request to appear by noon on Aug. 12 for the Aug. 19 public hearing. Filings of comments or testimony should be made at regulations.gov, docket number USTR-2019-0009.
Correction: The sixth list of Section 301 tariff exclusions only includes 110 subsets of tariff numbers in chapters 84, 85 and 90 (see 1907080023).