White House Announces 25 Percent Duties on Certain Chinese Origin Products

Thursday, March 22, 2018

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The White House and US Trade Representative (USTR) announced on March 22 that additional duties of 25 percent will be assessed in the near future on certain Chinese origin goods. The additional duties will be charged under the authority of Section 301 of the Trade Act of 1974, which allows for imposition of additional duties and other trade remedies in order to enforce trade agreements, resolve trade disputes, and open foreign markets to U.S. goods and services. It is the main authority under which the United States may impose trade sanctions on foreign countries that violate trade agreements or engage in unfair trade practices. The additional duties are in response to the White House concluding that China has engaged in unfair trade.

Importantly, the specific tariff provisions that will be subject to the new duties have not been announced.  In the next 15 days, the USTR will publish a list for comments and hearings and the list will cover approximately $50 billion of Chinese origin imports in the aerospace, information and communication technology, and machinery areas. There will then be a 30 day comment period and a hearing. At the conclusion of the comment period and hearing, the USTR will make any necessary adjustments to the list of tariff provisions subject to the additional duties and will publish a final list. This means that the additional duties are likely more than 45 days away.  While this is not a lot of time, the additional duties will not be imposed immediately (e.g., tomorrow, later this week, etc.). 

If ever there was a time for importers to review their tariff classifications, valuation and origin issues, now is the time. Importers of products from China (and frankly, other countries where Chinese inputs are used) should be reviewing their tariff classifications (including arguments for possibly reclassifying certain goods outside of any targeted tariff provisions), valuation (including use of any "first sale" options), and origin (to determine if China truly is the country of origin of their products).

Pisani & Roll LLP can help with importers and affected parties with all of these options and we are continuing to monitor developments in this area. For more information about the impact of the new duties, contact Pisani & Roll L at info@worldtradelawyers.com.

Category: Economic Development