As Chinese negotiators prepare to visit the United States this week for what is supposed to be the final round of trade talks, two ominous messages have U.S. shippers on alert. On Sunday, May 5, 2019, the United States President, Donald Trump, posted threats to increase the existing 10% tariffs on $200 billion worth of Chinese imports up to 25% as early as this upcoming Friday, May 10th. The 25 percent tariff threat also extended to the remaining $325 billion worth of additional Chinese goods that have been sitting in limbo on the third list.
While some media have taken the announcements as a sign of trade collapse between the two economic giants, others believe it is simply a leverage tactic for USTR Lighthizer and Secretary Mnuchin to use in upcoming negotiations. The Chinese delegation had been considering delaying this week’s talks in an effort to slow negotiations but have since confirmed the U.S. visit.
Officially, no communication has been issued from the White House to confirm a tariff increase for Friday, May 10, 2019 as of this publication.
It has been an emotional roller coaster for international shippers as the on-going dispute continues after 10 months of back and forth. Exactly two months ago, the U.S. officially postposed additional tariffs “until further notice,” giving importers a sign that China had finally conceded to United States’ demands for an end to unreasonable and discriminatory practices bringing against American businesses.
U.S. SECTION 301 CLAIMS AGAINST CHINA:
- China uses foreign ownership restrictions, such as joint venture (JV) requirements and foreign equity limitations, and various administrative review and licensing processes, to require or pressure technology transfer from U.S. companies.
- China’s regime of technology regulations forces U.S. companies seeking to license technologies to Chinese entities to do so on non-market-based terms that favor Chinese recipients.
- China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and intellectual property and generate the transfer of technology to Chinese companies.
- China conducts and supports unauthorized intrusions into, and theft from, the computer networks of U.S. companies to access their sensitive commercial information and trade secrets.
As negotiations re-ignite, importers and exporters may want to re-read newly minted ocean carrier contracts for penalty details, dust off alternative sourcing plans, and find creative strategies for avoiding tariff increases heading into summer, the start of the upcoming peak season for shipping.
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