China Cuts Tariffs on U.S. Goods
In December 2019, after the Phase One China Trade Deal was signed, President Trump announced Section 301 tariffs from China on List 4a would decrease from 15% to 7.5% on February 14, 2020. Simultaneously, China has now also decided to gesture with a tariff reduction of its own on U.S. goods.
$75 Billion in U.S. Goods
According to the Wall Street Journal, “China said it would slash tariffs on $75 billion of U.S. imports in half as part of its efforts to implement a recently signed trade agreement in Washington.”
Effective February 14, 2020, China will cuts tariffs (10% and 5%) in half, lowering additional tariffs on U.S. goods from an additional 5% and additional 2.5%. The original tariffs have been in place since September 1, 2019. At nearly the same time, China also waived tariffs on 16 U.S. products. Those exemptions went into effect on September 17, 2019 and will expire on September 16, 2020.
U.S. Goods Affected
Some U.S. exports into China that will be effected by the new tariff of 5% include 916 tariff lines and products such as fruits, nuts, meats, seafood,among others. Those effected by the new tariff of 2.5% include 801 tariff lines and products such as soybeans, oil, plastic products, cosmetics, photographic film, among others.
Still, over 6000 tariff lines are still subject to an additional tariff ranging between 5-25% on U.S. goods imported into China.
The “Phase One” agreement is just the beginning. Conversations in the direction of a “Phase Two” Trade Deal still must occur, which will dive deep into intellectual property rights, currency manipulation and the opening of the Chinese financial services market, among other issues. President Trump says these negotiations will begin immediately and they will not wait until after the 2020 election.
Our Global Trade Experts and Licensed Customs brokers are here to help.
If the Section 301 tariffs are affecting your company, watch this webinar recording to learn more. Scarbrough’s President and COO, Adam Hill, along with Patrick Caulfield, an attorney at GDLSK, an international trade and customs law firm, talk about legal opportunities to recover or avoid paying duty to CBP. This is an interactive webinar set up as a question/answer forum.
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