On May 8, 2019, USTR released its federal register notice on the tariff increase for the third tranche (List 3) Section 301 tariffs on China. The duty rate on the estimated $200 billion worth of Chinese products will increase from 10% to 25% effective 12:01am ET on Friday, May 10, 2019. The notice also announces that an exclusion process will be instituted for these products in a separate notice.
The rate increase to 25% means that entries of goods
- entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, and
- exported to the United States on or after May 10, 2019 will now be subject to an additional tariff of 25%. Entries must be subject to both qualifiers-meaning that if a shipment has been exported prior to May 10, 2019 it will still be subject to the 10% duty rate. However, if the shipment is exported after 12:01am ET on May 10 the 25% duty rate will apply. To see our full post, click here.
China Hits Back With Higher Tariffs on $60B in U.S. Goods
On May 13, 2019, China’s Ministry of Finance announced that it will raise tariffs on $60 billion in U.S. goods, starting on June 1, 2019. This action was taken in retaliation for President Trump’s latest decision to raise tariffs on $200 billion worth of Chinese products from 10% to 25%. The proposed tariffs would affect a wide range of U.S. goods exported to China. A range of tariff rates are proposed, however, depending on the type of product. To see the full post on the retaliatory actions taken by China, click here.
On May 13, 2019, the Office of the U.S. Trade Representative (USTR) released another round of proposed tariffs on Chinese goods worth roughly $325 billion. If these new tariffs come into effect, this would be the fourth round of tariffs in the ongoing and escalating trade war between the two countries. This proposed list of new tariffs came in response to China’s retaliatory tariff increase on $60 billion worth of U.S. products which was in response to the U.S.’s sudden and unprecedented increase of tariffs to 25% on the third round of Section 301 goods which had been in effect since September 24, 2018. To see our full post on the issue, click here.
On May 16, 2019, the President announced that he would be terminating Turkey’s status as a beneficiary of specialized treatment pursuant to the U.S. Generalized System of Preferences program (GSP).
At the direction of President Trump, the Office of the U.S. Trade Representative (USTR) announced in March its intent to withdraw the beneficiary status from India and Turkey under the GSP. To see our previous post on the issue, click here. There still has been no update from the White House on India’s status as a GSP beneficiary country.
Hours after the announcement that Turkey would no longer be a beneficiary of GSP status, the President announced that the U.S. would be reducing its previously imposed tariffs on Turkish steel from 50% to 25%. The announcement indicated that this decision was made after a reduction in steel imports from Turkey over the past year. The Department of Commerce cites as a basis for this reduction that the 232 steel tariffs have resulted in the decline in imports of steel articles from Turkey by “48 percent in 2018.”
On May 17, 2019, the White House issued a proclamation delaying the immediate institution of special additional tariffs on the imports of automobiles and automobile parts into the U.S. In the proclamation, President Donald Trump stated that he would:
“[D]irect the United States Trade Representative (Trade Representative) to pursue negotiation of agreements contemplated…to address the threatened impairment of the national security with respect to imported automobiles and certain automobile parts from the European Union, Japan, and any other country the Trade Representative deems appropriate, and to update me on the progress of such negotiations within 180 days. Under current circumstances, this action is necessary and appropriate to remove the threatened impairment of the national security.” To see the full post, click here.
On May 17, 2019, after numerous rounds of negotiations, the United States, Canada, and Mexico issued formal statements on lifting duties on Section 232 steel and aluminum products. While Canada and the U.S. explicitly stated that their respective tariffs would be lifted within the next two days, Mexico has yet to announce how quickly their retaliatory tariffs would end.
In the new agreement between the US and Canada, the U.S. would be lifting the imposed tariffs from last June– 25% on imports of steel and 10% on aluminum – as well as Canada’s retaliatory tariffs on steel and aluminum products. Similarly, Mexico will be lifting their retaliatory tariffs that targeted U.S. pork, dairy, and metal products. To see the full post, click here.
On Tuesday, May 21, 2019, USTR and the Office of Management and Budget (“OMB”) published in the Federal Register a request for comments on the Section 301 exclusion process for Tranche 3 tariffs which were increased from 10% to 25% on May 10, 2019. The notice also included a draft exclusion request form for the List 3 products. The draft exclusion request form includes more data requirements on U.S. and third-party sourcing, overall gross revenue, and on whether the company has applied for and/or received previous exclusion requests. To see our full post on the issue, click here.
Key Facts:
- President Trump is imposing tariffs on all imported goods from Mexico beginning on June 10, 2019
- The tariff rate will begin at 5% and increase to 10% on July 1, 15% on August 1, 20% on September 1, and 25% on October 1, 2019.
- The tariffs will remain at 25% until “Mexico substantially stops the illegal inflow of aliens coming through its territory”
On May 30, 2019, President Trump announced that he would impose tariffs on all imported goods from Mexico beginning on June 10, 2019 at a 5% duty rate and increasing an additional 5% each month for three months.
The President cited to The International Emergency Economic Powers Act as his inherent authority to impose these broad tariffs. However, it is unclear which section of the Act he is invoking these powers from. The President is also required to immediately transmit to Congress a report specifying the circumstances which necessitate such action and the reason for choosing this response.
