Tariff Increases to 25 Percent for List 3 Chinese Goods Official, “And” Leaves Room for Exports

2019-05-09T15:43:05+00:00May 9th, 2019|Customs, Import, Industry Spotlight|

Acting on threats from earlier this week, the Office of the U.S. Trade Representative (USTR) officially posted a notice of modification in the Federal Register increasing duties on $200 billion worth of goods from China, also referred to as List 3, from 10 percent to 25 percent.

But new language added to the Annex notes may allow for a brief reprieve for importers, and perhaps just enough time to continue trade negotiations:

Effective with respect to goods (i) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, and (ii) exported to the United States on or after May 10, 2019, subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States is modified.

According to the notice, the 25% duty rate applies to goods that fit both criteria of being exported and entered on or after 12:01 AM, Friday May 10, 2019.  For shippers, this indicates cargo currently on the water or in-transit will be able to receive the existing 10 percent duty treatment, while airfreight cargo and inventories consumed from bonded warehousing will feel the impact much sooner.

Customs and Border Protection (CBP) has not yet released details of how the changes will be processed in ACE, the Automated Commercial Environment, and changes have been slow to technologically implement for the Agency in the past.

Importers are advised to keep a detailed record of impacted shipments with documentation verifying the vessel date of export.  Shippers that believe a 25 percent duty has been applied in error may file post-summary entry corrections to request a refund with the proper back-up documentation.

Upon implementation, the USTR will also provide exclusion procedures for the $200 billion worth of goods from China on List 3, much like those already in place for the initial $34 billion on List 1 and $16 billion targeted on List 2.

The sudden tariff increase by the United States signals a breakdown in trade negotiations even as the Chinese delegation travels to Washington to continue discussions this week. The U.S. has indicated the Chinese government tried to reopen finalized commitments and was backtracking on the transfer of proprietary technology.

On May 5, the U.S. President warned of an additional final round of 25% duties on the remaining $325 billion worth of goods, List 4, effectively targeting all U.S. imports from China. Duties will be applicable in addition to existing duties as well as antidumping (AD) and countervailing (CV) penalties.  The U.S. has recently begun investigating several AD/CVD investigations into wooden cabinets and ceramic tile.

As Green continues to monitor the situation, stay up-to-date on freight news by following us on FacebookTwitter, and LinkedIn. For continuous updates, make sure to check out our website at greenworldwide.com.

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