UDPATE for Chinese Importers: Final List Published for USTR Issues Tariffs on Chinese Products

The USTR released the final list for the second tranche of Section 301 tariffs.  This is the remaining tariffs from the list that was released on April 5th.  These products will be subject to the additional duty rate of 25% from China.  Please note that this is not to be confused with the list that contains approximately 6031 tariffs and is being reviewed in the announcement on August 1st.

For the list of goods impacted please refer to the link below: https://ustr.gov/sites/default/files/enforcement/301Investigations/Final%20Second%20Tranche.pdf

Please note that this is not to be confused with the list that contains approximately 6031 tariffs and is being reviewed in the announcement on August 1st. That is a completely separate list and is still in the review process for consideration of increasing the tariff to 25% instead of the initial announcement of 10%. Written comments are being accepted until September 5, 2018 for those additional tariffs.

For the complete list of items and procedures for electronic submission of comments please refer to the link:  https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

Sunset Says:  In today’s changing trade world, it’s of the utmost importance for importers and exporters to communicate regarding the potential impacts on their costs. Companies that rely on Free Trade Agreements between the US and other countries for critical parts or components may be vulnerable to recent policy changes and any future policy changes.   

Based on retaliatory surcharges implemented, this could be an opportunity for other countries to negotiate Free Trade Agreements with the US for additional resources to importers. -Liberty Baugher, International Logistics Supervisor, Sunset Transportation

Previous news from the Office of the United States Trade Representative

(https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-issues-tariffs-chinese-products)

Washington, DC – The Office of the United States Trade Representative (USTR) today released a list of products imported from China that will be subject to additional tariffs as part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property.

On May 29, 2018, President Trump stated that USTR shall announce by June 15 the imposition of an additional duty of 25 percent on approximately $50 billion worth of Chinese imports containing industrially significant technologies, including those related to China’s “Made in China 2025” industrial policy.  Today’s action comes after an exhaustive Section 301 investigation in which USTR found that China’s acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden U.S. commerce.

“We must take strong defensive actions to protect America’s leadership in technology and innovation against the unprecedented threat posed by China’s theft of our intellectual property, the forced transfer of American technology, and its cyber attacks on our computer networks,” said Ambassador Robert Lighthizer.  “China’s government is aggressively working to undermine America’s high-tech industries and our economic leadership through unfair trade practices and industrial policies like ‘Made in China 2025.’  Technology and innovation are America’s greatest economic assets and President Trump rightfully recognizes that if we want our country to have a prosperous future, we must take a stand now to uphold fair trade and protect American competitiveness.”

The list of products issued today covers 1,102 separate U.S. tariff lines valued at approximately $50 billion in 2018 trade values.  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.

USTR recognizes that some U.S. companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action.  USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks.

 

Background

President Trump announced on March 22, 2018, that USTR shall publish a proposed list of products and any intended tariff increases in order to address the acts, policies, and practices of China that are unreasonable or discriminatory and that burden or restrict U.S. commerce.

These acts, policies and practices of China include those that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.  They bolster China’s stated intention of seizing economic dominance of certain advanced technology sectors as set forth in its industrial plans, such as “Made in China 2025.”  (See USTR Section 301 Report here.)

On April 3, USTR announced a proposed list of 1,333 products that may be subject to an additional duty of 25 percent, and sought comments from interested persons and the appropriate trade advisory committees.

Interested persons filed approximately 3,200 written submissions.  In addition, USTR and the Section 301 Committee convened a three-day public hearing from May 15-17, 2018, during which 121 witnesses provided testimony and responded to questions. The public submissions and a transcript of the hearing are available on www.regulations.gov in docket number USTR-2018-0005.

Click here to view a fact sheet on the Section 301 product list.

Click here to view a fact sheet on the Section 301 investigation.