President Trump announces 10% duty on remaining $300 billion of China exports.
With a thread of tweets on Thursday, President Trump announced that negotiations hadn’t produced the progress he sought and effective September 1st, a 10% duty would be imposed on the remaining HTS numbers from China that were not covered under one of the USTR’s previous three lists or that has received an exclusion.
Following what many people believed to be progress with President Xi of China at the G20 Summit in Kyoto, Japan, President Trump paused the action that the United States Trade Representative had taken in May when they published for notice and comment the fourth list of HTS numbers. You can read that notice and the 2000+ comments here.
This past week, a US delegation was back meeting in Shanghai, China. That delegation included Treasury Secretary Mnuchin and USTR Lightheizer. There hadn’t been any significant reporting positive or negative about the talks until the world saw this on Thursday:
What Trump’s China Tariffs Mean Today
So where are we at with this today? Here are the important things to keep in mind.
- As of August 2nd, there has not been official confirmation of this published on either the USTR’s Section 301 China page or in the Federal Register.
- As with the confusion surrounding previous lists, the question remains as to whether or not the date will require goods to have been exported from China by September 1st or imported by September 1st.
- While neither is good, the former means a chance to book cargo and factories to finish orders in time to sail or fly by August 31st. The latter means the next several weeks will be utterly insane for ocean freight and a potential air freight bubble in the last two weeks of the month.
- We strongly encourage importers to speak with us about your continuous bond amounts because it would be better to proactively increase continuous bonds based on this 10% – or worst case 25% – moving forward so their import programs are not interrupted, nor additional costs for single transaction bonds be included as well.
We also cannot forget the impact this will potentially have on a new group of American exporters. Bestway was fortunate to have won the ‘E’ award several years ago which recognizes our contribution to American exports.
Each time the United States has imposed new trade remedies on a new group of HTS numbers, China has responded in kind, making the market less competitive for US exporters who have either had to take significant reductions in price to absorb these duties or who have lost out to competitors in other countries.
Importers and exporters who feel strongly about the trade actions being taken with China – or with other trading partners – are reminded that they should work with their industry’s trade associations or directly with their members of Congress to let them know first-hand are impacting their businesses.
At Bestway, we will continue to monitor the news about this latest China development and advise our clients accordingly.