CBP created Harmonized System Update (HSU) 1815 on Sept. 21, containing 1,230 Automated Broker Interface records and 306 harmonized tariff records, it said in a CSMS message. This update includes modifications related to the imposition of the third tranche of Section 301 tariffs on China (see 1809210026), as well as changes to Chapter 63 related to a new subheading for bed nets. The update also includes some updates related to the enactment of H.R. 4318, the Miscellaneous Tariff Bill Act of 2018 (see 1809140004). "Please be aware that only a portion of the records have been added thus far, and have been included in this update. This effort is ongoing and will continue until all changes have been completed," CBP said. The MTB changes are effective Oct. 13.
Section 301 (too broad)
Importers of products covered by the new third set of 10 percent Section 301 tariffs on China will file under two new tariff provisions in Chapter 99 beginning at 12:01 a.m. EDT on Sept. 24, according to a notice published Sept. 21 by the Office of the U.S. Trade Representative. New subheading 9903.88.03 will cover the vast majority of new products subject to tariffs that fall in 8-digit subheadings fully subject to Section 301 tariffs. New subheading 9903.88.04, on the other hand, covers a set of 11 8-digit subheadings that are only partially covered and have exceptions at the 10-digit level.
With the “great news” that Element Electronics persuaded the Trump administration to remove liquid crystal display (LCD) panels and motherboards under the Harmonized Tariff Schedule 9013.80.90 and 8529.90.13 headings from the third tranche of Section 301 tariffs set to take effect Sept. 24 (see 1809170051), Element’s Winnsboro, South Carolina, LCD TV assembly factory “will remain open!,” it emailed retail customers Walmart and Target. “Thanks again for supporting Element -- the only major television brand assembling TVs in America.” Element had said in public hearings that it would be forced to shutter the factory and terminate the remaining 126 jobs there if tariffs on the components it sources from China went through because the prohibitively higher costs would have forced the company to import finished TVs from China rather than assemble them in Winnsboro.
China, which previously asked for consultations with the U.S. at the World Trade Organization over steel and aluminum tariffs and two previous rounds of Section 301 tariffs (see 1808270020), asked on Sept.18 for consultations on tariffs that will be levied next week on $200 billion in Chinese goods. As with the previous cases, China says the measures violate WTO rules by imposing higher tariffs on China than on other countries, by exceeding U.S.-agreed bound rates, and because the U.S. did not go through the dispute resolution system at the WTO before acting.
The two rounds of Section 301 tariffs, implemented July 6 and Aug. 23, account for less than 10 percent of the shipment volume FedEx does in the “China-U.S. lane bidirectionally,” and that volume represents about 2 percent of total revenue for the “whole enterprise,” said Raj Subramaniam, FedEx chief marketing and communications officer, on a Sept. 17 earnings call. New tariffs on the $200 billion worth of imports would raise the impact to a quarter of the commerce FedEx does between China and the U.S., he said. “The uncertainty around the issue and the potential for additional tariffs is affecting the market and we're beginning to see some of the economic activity in China starting to moderate as a result of that,” Subramaniam said about an hour before President Donald Trump announced the third tranche of tariffs would take effect Sept. 24. FedEx hasn’t yet seen “any significant shifts in the customer supply chain” as a result of the tariffs, he said. “However, if the situation continues for any amount of time, we do expect customers to diversify their supply chains and perhaps some of the trade patterns might change.” Subramaniam is confident that “the scale and flexibility of FedEx will enable us to deliver strong results in enterprise despite any uncertainty on trades and tariffs,” he said.
China will impose new tariffs on oak wood veneer, non-electrical machines, makeup, copper and natural gas, which are all among the top-volume items in 3,571 U.S. imports that will be subject to 10 percent retaliatory tariffs at 12:01 a.m. on Sept. 24. Another 1,636 tariff lines will be subject to an additional 5 percent tariff, with bleached wood pulp, cow hides, optical media and needles and catheters among the highest-volume goods. Together, the two lists accounted for about $60 billion in imports last year. China's tariffs come in response a newly released list of goods from China to face Section 301 tariffs in the U.S. starting Sept. 24 (see 1809170051).
International Trade Today is providing readers with some of the top stories for Sept. 10-14 in case they were missed.
That the Section 301 tariffs on $200 billion worth of Chinese imports take effect Sept. 24 gives potential litigants little time to weigh a court challenge blocking the duties if they are going to act before they become effective (see 1809170051). The extremely quick turnaround time, published in a notice that U.S. Trade Representative Robert Lighthizer released late on Sept. 17, bore out worries that the Trump administration would release its order imposing the tariffs soon after the comments period expired Sept. 6.
Importers will have to pay an additional 10 percent on about 5,700 8-digit tariff lines starting Sept. 24, President Donald Trump said on Sept. 17. "If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports," said Trump in the statement.
The Office of the U.S. Trade Representative released a notice with instructions for making product exclusion requests for the second tranche of Section 301 tariffs that took effect Aug. 23. Granted requests will apply for a year following publication of the exclusion determination in the Federal Register and will be effective retroactively back to Aug. 23, the notice said. The exclusions requests are due by Dec. 18 and responses to the requests "are due 14 days after the request is posted in docket number USTR-2018-0032" on regulations.gov, USTR said. "Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14 day response period, or 7 days after the posting of a response." The instructions are similar to the USTR's instructions for exclusion requests from the first batch of Section 301 tariffs (see 1807160013).