Earlier this week, President Trump’s administration announced the imposition of tariffs on European goods covering a wide range of goods, from aircraft, to wine, cheese, olive oil and many more items starting October 18th.
The move comes after the World Trade Organization granted the US permission to tax European exports annually to the amount of $7.5 billion in response a US complaint over subsidies given to the European plane manufacturer Airbus. The $7.5 billion in tariffs is annually and continues until an agreement is reached.
The list of goods subject to tariffs will place a 25% tariff on Parmesan cheese, coffee, mussels, single malt whiskeys and other agricultural goods from Europe in addition to a 10% tariff on European aircraft.
If you have any questions how this may impact your business, contact experienced trade and customs attorney David Hsu by phone/text at 832-896-6288, or by email at email@example.com, firstname.lastname@example.org.
According to Reuters, President Trump and Japanese Prime Minister Shinzo Abe met last Sunday at the G7 Summit – agreeing that the current duties on cars remain at 2.5% for passenger vehicles and 25% for pickup trucks from Tokyo. Previously, the US did threaten Japan with additional duties of 25% on auto exports to the US under the premise of national security.
U.S. President Donald Trump on Monday said the United States would not imminently impose new tariffs on autos imported from Japan as the largest and third-largest economies continue their trade negotiations. Japan would also agree to greater market access for US agricultural products such as beef and to increase purchases of US corn.
The Trump administration has postponed the levying of 10% tariffs on List 4 goods covering $300 billion in imports from China until December 15th. The initial date of September 1st was postponed after reports of a phone call with Beijing.
A new round of trade talks will be held in September after this month’s talks did not result in a trade deal.
There is still time to lower your import risk, if you would like solutions to lowering the duties you need to pay, contact experienced trade attorney David Hsu at 832-896-6288 or by email at email@example.com, firstname.lastname@example.org.
According to the Wall Street Journal, the Treasury department’s tariffs is expected to generate almost $72 billion in tariffs through June of this year. This number will likely go much higher if the “List 4” duties take effect on September 1st. On September 1st, over $300 billion in Chinese goods will be subject to a 10% tariff with a potential to increase to 25%.
Specifically, as of June 30th, the Treasury department has collected $63 billion in tariffs over the past 12 months. In contrast, prior to the trade war, the US only brought in $30 billion dollars.
The WSJ estimates the annual generated amount can be as high as $100 billion by the end of the year once the 10% duties are placed on over $300 billion worth of imported goods from China.
If you have any questions how the current 301 duties or proposed List 4 duties will impact you, contact experienced trade attorney David Hsu at 832-896-6288 or by email at email@example.com, firstname.lastname@example.org.
As you are aware, the exclusion process for List 3 is now openuntil September. We have received a lot of exclusion requests and I thought I’d share the information the US Trade Representative (USTR) requires in order to review an exclusion request:
1. 10-digit subheading of the HTSUS applicable, use 8/10 digits (if there are different HTSUS 8 and 10 digit codes used, we will need a separate request)
2. Product name
3. Detailed description of the product: (1) physical characteristics (e.g., dimensions, weight, material composition, etc.). (2) Requestors may submit a
range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with
similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.
4. The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any
unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requestors may submit attachments that
help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a
Requestor’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the
product using criteria that cannot be made available for public inspection.
5. Requestors must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data
on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the Requestor purchased, in 2017, 2018,
and the first quarter of 2019.
6. Requestors must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019.
7 For imports sold as final products, Requestors must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product
8. For imports used in the production of final products, Requestors must provide the percentage of the total cost of producing the final product(s) the
Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for. Required
information regarding the Requestor’s purchases and gross sales and revenue is BCI and the information entered will not be publicly viewable.
9. Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources
in the United States and/or in third countries. The Requestor must provide an explanation if the product is not available outside of China or the Requestor
is not sure of the product availability.
10. Whether the Requestor has attempted to source the product from the United States or third countries.
11. Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the
Requestor or other U.S. interests.
12. Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
If you have any questions about the exclusion request process, contact experienced attorney trade attorney David Hsu at 832-896-6288 or by email at email@example.com.
As you are aware, yesterday, President Trump imposed a September 1st deadline for an additional $300 billion in tariffs on Chinese goods if a trade deal is not reached.
The $300 billion covers the remaining items not previously listed in Lists 1, 2 or 3. The List 3 exclusion process is currently underway and Commerce recently published lists of additional exclusion requests that have been granted in Lists 1 and 2.
Here is a summary of what has been reported by various news outlets:
- There has been no progress in trade talks with China this week in Shanghai between Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer and their Chinese counterparts.
- Trump believes China is moving too slow in working on a deal and set September 1st as a deadline to impose duties on the remaining imports of goods from China.
- The new duties if imposed in September will be at 10%. We have seen goods in List 1, 2, 3 have tariffs as high as 25%.
- Some news outlets report that China may be stalling to sign a trade deal until after the 2020 election.
- September 1st would mark an end to a “truce” between the two countries.
- China has threatened to respond with their own retaliatory tariffs if Trump goes through with the September 1st deadline.
- Trump claims China has not gone through with their promise to buy more agricultural products from the US in large quantities.
- Trump also claims China would curtail the shipments of Fentanyl to the United States, but has not and the shipments continue to harm Americans.
- According to reports, Chinese negotiators want Trump to remove the tariffs on $250 billion in Chinese goods before they will purchase US agricultural goods and comply with their other concessions.
- Trump believes the US economy is strong as unemployment has hit a 50-year low, a position that will enable the US to outlast China in the event of a prolonged trade war.
- Analysts claim further duties will only hurt Americans in increasing the prices of goods.
- Shipping companies and importers are trying to get as many shipments into the US prior to the September 1st deadline.
Will post more news as they become available. If you have any questions how the 301 duties will impact your business, contact David Hsu at: firstname.lastname@example.org, email@example.com or by phone/text at 832-896-6288.
According to CNBC, profits earned by China’s industrial firms fell 3.1% in June from a year earlier, according to the China’s National Bureau of Statistics.
The decrease in industrial profits is likely due to the US/China trade war and the increase in tariffs on Chinese imports. CNBC also states that economic growth in the second quarter slowed to a near 30-year low.
With the US and China set to meet on July 30th for the first time since May, both sides may be looking for an agreement to end the almost year-long trade war.
According to the South China Morning Post, some Chinese manufacturers that relocated to Vietnam due to the tariffs placed on imports to the US, are moving back to China or exploring manufacturing options in Thailand, Bangladesh and Myanmar.
The SCMP article quotes a factory manager who said differences in culture (no over time in Vietnam and lower skill labor force) were two main causes of delays in delivery times and poor production numbers. With the tariffs in place, this has increased the demand for land and labor in Vietnam, causing costs to also increase. As foreigners cannot own land in Vietnam, there is also a risk for Chinese manufacturers to partner with a Vietnamese counterpart. Another factor leading to increased manufacturing costs for Chinese companies are the stricter labor and environmental protections, causing many Chinese companies to face fines for violations.
The current trade situation in Vietnam and US tariffs are forcing some manufacturers to look towards Thailand – attractive because of the stable political situation but high labor costs; Bangladesh which is relatively unknown to Chinese manufacturers and Myanmar which has low labor costs, but Myanmar faces sanctions due to their human rights abuses.
While not discussed in the SCMP article, the other big problem for Chinese manufacturers is the issue of how long the US 301 duties will remain in place. Just as spontaneously as the 301 duties were put in place, the 301 duties can also spontaneously end at the discretion of President Trump. I believe this unpredictability is the main question Chinese manufacturers must answer before spending the money and dedicating the time, resources, and manpower needed to move production to a foreign country.
If you have any questions regarding country of origin and how to avoid tariffs by moving production to other countries besides China, contact experienced trade attorney David Hsu at 832-896-6288 or by email at firstname.lastname@example.org, email@example.com.