June 15, 2018
Today the Office of the United States Trade Representative (“USTR”) announced that the United States will impose tariffs on $50 billion-worth of products imported from China. USTR has broken out these tariffs into two sets. The first set covers 818 separate items (each identified by its 8-digit subheading in the U.S. Harmonized Tariff Schedule (“U.S. HTS”)). These tariffs will apply to products entered into the United States starting July 6, 2018. The products covered by this first set represent approximately $34 billion of annual imports into the United States. Starting July 6, Customs and Border Protection will assess a tariff equal to 25% of the declared value of these goods upon importation, in addition to any other tariffs that may apply. This first set primarily covers various types of machinery (please click here for the official list).USTR has stated that it will establish “within the next few weeks” an exclusion application process, through which interested parties may request that specific products be exempted from these tariffs. Although USTR has not identified possible bases for exemption, it seems likely that such bases could include, for example, the inability to obtain the same or similar products in the United States.
The second set has not yet been finalized, although it currently encompasses 284 separate U.S. HTS subheadings, representing approximately $16 billion of annual imports into the United States. Currently, the second set of products consists mainly of chemicals and machinery. The second set also includes several steel and aluminum products that were not covered by the tariffs the President imposed in March pursuant to his authority under Section 232 of the Trade Expansion Act of 1962. (Please click here for the list as it currently stands). The makeup of the second set will be subject to additional proceedings, including an opportunity for public comment. USTR has not yet indicated what the tariff rate will be for this second set of products.
USTR has imposed these tariffs after an investigation into certain of China’s trade practices under the authority of Section 301 of the Trade Act of 1974 (“Section 301”). Section 301 authorizes USTR to “impose duties or other import restrictions” on products imported from a country that USTR has found maintains “an act, policy, or practice” that is “unjustifiable and burdens or restricts United States commerce.” Specifically, USTR has found that additional tariffs on certain imports from China are warranted because of “China’s unfair trade practices related to the forced transfer of American technology and intellectual property.” The President has stated that the United States “will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”
Weil’s trade team has deep experience navigating the issues presented by this newest round of tariff increases. From customs analysis to advocating in front of U.S. federal agencies, including filing exclusion requests and submitting comments pursuant to a notice and comment period, Weil’s trade team stands ready to assist your company in an increasingly uncertain trade regulatory environment.
This Alert is not intended to provide legal advice. If you have questions regarding its content, please contact Ted Posner (firstname.lastname@example.org; (202) 682-7064) or Nathan Cunningham (email@example.com; (202) 682-7156).