Heads up: New 10% Tariff on $300B China Imports to the U.S. starting September 1st
On August 1, 2019 President Donald Trump declared that effective September 1, 2019, an additional 10% Section 301 tariff will be imposed on all the remaining Chinese goods imported from China amounting to an estimated worth of $300B.
On August 13, 2019, the United States Trade Representative (USTR) released two lists, List 4A and List 4B, that enumerates all the Chinese goods that will be subjected to this additional 10% tariff. For the items on List 4A, the 10% additional duty fee will take effect on September 1st, while for the items on List 4B, the 10% additional duty fee will take effect on December 15th. The items on both lists are industrial and consumer related items, almost all are imported Chinese goods that were not affected from the first three rounds of tariffs declared by Trump. Some items in the final lists were totally excluded from the initial list issued by the USTR citing health, national security, safety and other important reasons.
This new announcement by President Trump was released following a meeting that happened in Shanghai between the two governments with the intent to restart trade talk negotiations. The said meeting was the first in-person trade talk to occur since the G-20 truce that happened in Osaka last June. Trump explained that in prior negotiations: (1) China pledged to purchase U.S agricultural products in large quantities and (2) that China had also promised to cease sales of Fentanyl to the U.S. and in both occasions China had failed to do so. With this, Trump imposed the additional 10% tariff rate and had announced that trade talks with China will continue. This additional 10% tariff rate is not part of the Chinese goods worth $250B that were given a 25% tariff rate by Trump last May 2019. Following this announcement, Trump also declared that the 10% rate could increase to a maximum of 25%.
The trade battle between the United States and China, two of the world’s largest economies, has been happening now for more than a year. Trump first began talking about enforcing tariffs on imported Chinese goods and investment restrictions for Chinese companies in March of last year. The first round of tariff declarations happened last year in June, when both governments imposed eye-for-an-eye tariffs on $34B worth of imported goods from both countries. Two months later, the second round of tariff declaration happened when Trump imposed a 25% tariff rate on $16B worth of imported Chinese goods, mostly industrial related items. The third round of tariff declarations happened last May when Trump again announced additional tariff rate of 25% on Chinese goods with an import value of $250B. The most recent tariff increase is the fourth round of tariff declarations made by President Trump.
September 1st is coming up quickly. Importers should first determine the impact of this tariff rate and quantify the possible additional expenses their companies might incur. Review all transportation plans and see if your imports can be cleared through U.S. Customs before the effective date in order to avoid the tariff increase. Gallagher is available to assist companies to ensure timeliness of the customs process.Call 303-365-1000 or email us anytime!