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Shippers voice concerns over latest US-China tariffs

CBP will begin to collect duties from 6 July on 818 additional product lines covering $34bn worth of imports from PRC

Representatives of US retail importers have voiced their concerns about the impact of the latest US-China tariffs after the US last Friday said it would go ahead with new 25% taxes on $50 billion of Chinese imports.

Despite an agreement last month to suspend planned punitive tariffs against one another after achieving “meaningful progress” towards a new trade framework, the Office of the United States Trade Representative (USTR) last Friday released a list of products imported from China that it said would be “subject to additional tariffs as part of the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property”.

US Customs and Border Protection will begin to collect the additional duties on 6 July on 818 lines of the original 1,333 lines that were included on the proposed list published on 6 April. These lines cover approximately $34 billion worth of imports from China, USTR said.

US president Donald Trump reportedly also said the US would impose another $100bn of Chinese imports if Beijing “engages in retaliatory measures, such as imposing new tariffs on US goods, services, or agricultural products; raising non-tariff barriers or taking punitive actions against US exporters or US companies operating in China”.

As reported today in Lloyd’s Loading List, China has published its own list of threatened tariffs on $50bn in US goods, including soyabeans, aircraft and autos, threatening it would hit back if Washington followed up with further measures. And now Washington has completed a second list of possible tariffs on another $100bn in Chinese goods, in the expectation that China will respond to the initial US tariff list in kind, sources told Reuters.

The Guardian said China’s commerce ministry said China did not wish to have a trade war, “but the Chinese side has no choice but to strongly oppose this. We will immediately introduce tariff measures of the same scale and strength. All the results from the negotiations previously reached by the two parties will be invalid.”

It added: “It is deeply regrettable that in disregard of the consensus between the two sides, the US has demonstrated flip-flops and ignited a trade war.”

National Retail Federation (NRF) president and CEO Matthew Shay said tariffs are taxes on American consumers, noting: “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.

“Tax reform has encouraged US companies to expand and invest in their workforces and unleashed the strongest levels of consumer confidence in a generation. Unfortunately, these tariffs and the retaliation China has promised put all this economic progress at risk. Once again, we urge the administration to change course and develop a clear and comprehensive strategy to hold China accountable.”

A study commissioned by NRF and the Consumer Technology Association found that tariffs on $50 billion of Chinese imports, coupled with the impact of retaliation, would lead to four job losses for every job gained and reduce US gross domestic product by nearly $3 billion.

NRF testified before the Office of the US Trade Representative during a hearing last month to share the retail industry’s concerns over tariffs.

USTR explained on Friday that president Trump had stated on 29 May that USTR would announce by 15 June “the imposition of an additional duty of 25% on approximately $50 billion worth of Chinese imports containing industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy. Today’s action comes after an exhaustive Section 301 investigation in which USTR found that China’s acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden US commerce.”

The list of products issued last week covers around 1,100 separate US tariff lines valued at approximately $50 billion in 2018 trade values. It generally focuses on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, USTR said.

USTR said list of products consists of two sets of US tariff lines: The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China.

USTR said it had determined to impose an additional duty of 25% on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on 6 July.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

USTR said it “recognizes that some US companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks.”


Will Waters | Monday, 18 June 2018

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