U.S. President Donald Trump took to Twitter on Aug 1 announcing a new 10% tariff on the fourth list of $300 billion dollars worth of imports from China, effective Sept. 1. This will add a tariff to just about all of the remaining imports from China that haven't already fallen victim to Section 301 duties. The 10% tariff will be in addition to any other applicable tariffs already in place on products on the list.
The new tariffs will apply to 3,805 product categories including livestock, meat and dairy products, floral products, fruits and vegetables, spices, apparel, shoes, chemicals, toys, sports equipment, TVs and electronics, musical instruments, and more. View the list of products in the Annex of Federal Register Notice 84 FR 22564 here.
According to the USTR, List 4 covers all apparel, footwear, and manufactured textile products but excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, and rare earth minerals.
On Aug 13, USTR announced it would be implementing the 10% tariffs on $300 billion of Chinese imports in two phases, splitting the products into two lists. It also removed some products from the list based on health, safety, and national security concerns.
The USTR delayed to December 15 tariffs on products including cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.
View the lists here:
On Aug 23, “Twelve hours after China said it would retaliate against Mr. Trump’s next round of tariffs by raising taxes on American goods, Mr. Trump said he would bolster existing tariffs on Chinese goods," reported the New York Times.
President Trump instructed the United States Trade Representative (USTR) to increase by 5% the tariffs on approximately $550 billion worth of Chinese imports.
Trump cited Chinese negotiators "re-negging" on parts of the deal, and a lack of agricultural purchases from China as a main factors for levying the tariffs. He also claimed that his "friend President Xi" didn't stop the sale of Fentanyl to Americans.
Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to...
— Donald J. Trump (@realDonaldTrump) August 1, 2019
...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and...
— Donald J. Trump (@realDonaldTrump) August 1, 2019
...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...
— Donald J. Trump (@realDonaldTrump) August 1, 2019
...We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!
— Donald J. Trump (@realDonaldTrump) August 1, 2019
"Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to buy agricultural product from the U.S. in large quantities, but did not do so.
Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die!
Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%.
We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!"
With the tariff on products on List 4 set at just 10%, we are not expecting the USTR to accept exclusion requests. However, if the Administration decides to further raise the tariff to 25%, the USTR may open up an exclusion process similar to the one used for List 3 products.
Only one month of lead time before the tariff goes into effect certainly isn't much notice! Companies importing goods from China need to take a look at their upcoming shipments' projected arrival dates to see if there are any that will be subject to the new tariffs. It's also a good idea to explore any legal options for reducing or eliminating their exposure to these increasing costs.
Here are 5 tips from SupplyChain 24/7 for minimizing negative effects from the China trade tariffs on your supply chain:
Chinese negotiators are expected to visit Washington to continue their trade discussions in person in early September, with the hopes of reaching a comprehensive trade deal.