Section 301 Tariff Increase
On August 23, 2019, China announced it would impose tariffs on $75 billion worth of U.S. products imported into China. The retaliatory tariffs will impose an additional 5% or 10% duty on a total of 5,078 products, which include soybeans, auto parts, cars, small air crafts, beef and pork. According to Reuters, “China is also reinstituting an additional 25% tariff on U.S.-made vehicles and 5% tariffs on auto parts that had been suspended at the beginning of the year.”
In response, The United States Trade Representative will increase Section 301 Chinese imports that are currently at 25% to 30% for List 1, List 2, and List 3 starting October 1, 2019. These lists combined encompass about $250 billion in imports from China.
Furthermore, USTR also announced it will increase Section 301 Chinese imports on List 4 that are currently scheduled to become effective on September 1, 2019 from 10% to 15%. The USTR announcement did not go into detail if the entire List 4 (both 4a and 4b) will incur the 5% increase. List 4 tariff effective dates have been split. List 4a is scheduled for September 1, 2019 and List 4b is scheduled for December 15, 2019.
On August 18, 2017, USTR initiated an investigation into certain acts, policies and practices of the Government of China related to technology transfer, intellectual property and innovation (82 FR 40213). During the investigation, the Trade Representative determined that the acts, policies and practices of China under investigation are unreasonable or discriminatory and burden or restrict U.S. commerce, and are thus actionable under Section 301(b) of the Trade Act of 1974, as amended (Trade Act).
In response, President Trump initiated a number of actions which imposed ad valorem tariffs on certain imports originating in China. List 1, effective July 6, 2018 places an additional duty rate of 25% on $34 billion worth of goods from China. List 2, effective August 23, 2018 places an additional duty rate of 25% on $16 billion worth of goods from China. List 3, effective September 24, 2018 places an additional 10% on $200 billion worth of goods from China, and an increase up to 25% of these goods was imposed on June 15, 2019. List 1, 2, and 3 tariffs currently at 25% will jump to 30% on October 15, 2019. There are some exceptions to these tariffs through a product exclusion process. List 4a is scheduled for September 1, 2019 and List 4b is scheduled for December 15, 2019.
What to do
Scarbrough Consulting, Inc. is offering a free 30-minute consultation to any company that may be affected by the Section 301 announcements. Please send an email to email@example.com or fill out the form below. Our Global Trade Experts and Licensed Customs brokers are here to help.
Other ways to Learn More about Duty Savings
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.
To review Section 301, visit this helpful Resource Page
To read more about Section 301, visit USTR.gov
Download each Section 301 List below:
Scarbrough is offering a FREE 20-minute consultation to any importer affected by the Section 301 Tariffs. Email firstname.lastname@example.org or fill out the form below.