09 Jul 2018

China-US Trade Tariffs Go Live, Industries Urge Negotiation

It’s official.  At 12:01 AM on July 6, 2018, the United States implemented the first round of additional 25 percent Section 301 tariffs on 818 lines targeting “Made in China 2025” industrial imports to U.S.  China countered almost immediately with its own 25 percent tariffs on 545 lines of U.S. products ranging from vehicles to agriculture.  After months of unsteady back-and-forth negotiations, the two economic powerhouses still haven’t been able to agree on intellectual property theft and unfair trade practices that are at the core of the dispute.  But the United States Administration isn’t finished, with a secondary list under public review in July, an additional $16 billion in Chinese imports is on the chopping block, but even more could be anticipated.  The President hinted to reporters on July 5th that more could be coming down the pipe if progress isn’t made, “we have $200 billion in abeyance, and then after that $200 billion, we have $300 billion in abeyance.”

China’s Ministry of Commerce released a statement declaring, “The United States violated the WTO rules and launched the largest trade war in economic history to date… We will promptly inform the WTO about the situation and work with countries around the world to jointly safeguard free trade and the multilateral system.”

U.S. industries have shown mixed support of the new international trade policies; while most recognize the need for better treatment of U.S. intellectual property and fair trade, they don’t believe tariffs are the way to bring about an amicable long-term solution.  The National Association of Manufacturers, Retail Industry Leaders Association, United States Council for International Business, and U.S.-China Business Council have all urged both parties to return to the negotiating table before further escalation continues.

Exclusion Requests

For companies seeking reprieve, the Office of the U.S. Trade Representative released procedures for exclusionary requests from Section 301 tariffs, due by October 9, 2018.  Exclusions will be made on a “product basis…a particular exclusion will apply to all imports of the product, regardless of whether the importer filed a request,” USTR confirmed.

  • The public will have 90 days to file a request for a product exclusion; the request period will end on October 9, 2018.
  • Following public posting of the filed request on Regulations.gov, the public will have 14 days to file responses to the request for product exclusion. After the close of the 14 day response period, interested persons will have an additional 7 days to reply to any responses received in support of or opposition to the request.
  • Exclusions will be effective for one year upon the publication of the exclusion determination in the Federal Register, and will apply retroactively to July 6, 2018.

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