The Trump Administration is moving forward with its plan to expand Import tariffs on the items proposed in List 3 which covers some 6,000 tariff line items. The tariffs will be assessed a 10% additional duty and become effective in one week on September 24, 2018.
The President is giving indications that these tariffs could increase to 25% by year end if the Chinese do not respond properly to his demands for changes in their trade practices. These increased tariffs will cover a multitude of consumer items including seafood, furniture, lighting, handbags, bicycle tires and many others from the original list of $200 billion worth of Chinese imports. We will now have half our trade from China being subject to additional tariffs. The final List 3 of products included can be found here.
China has previously announced they would respond with more retaliatory tariffs on U.S. products if the U.S. moved forward with this proposal. This retaliatory measure has now also been confirmed. The President has threatened to raise the stakes again by adding a further $267 billion in Chinese imports to the target list in response to additional Chines tariffs. This would effectively place tariffs on just about all imports with China.
So the trade war is in full swing. Where it will go, what it will achieve and how long it will last are still very much open questions. In the meantime importers and exporters are trying to assess what it all will mean for their businesses. Some other questions being asked include what cost can we pass on to customers and what other sources/markets outside China can be considered?
After considering public comments only a relatively few products were excluded from this latest tariff increase. These include child-safety products such as bicycle helmets. Also removed from the list were Apple smart watches and some other consumer electronics products. We will provide more details on all products impacted as soon as available.
Exclusion Petition Procedures for List 2 Products
Although no procedures were announced for requesting exclusion from this latest round of tariffs for List 3 the USTR did announce procedures for exclusion from the $16 billion worth of goods on List 2 that went into effect on August 23, 2018. The official Federal Register Notice on these procedures will come out today but the preliminary notice can be found here. It's important to remember that the key information the government is looking for to consider exclusion of a product are:
Whether the product can be sourced in the U.S. or some other country
Whether the imposition of additional duty will cause severe economic harm to the applicant or U.S. interests
Whether the product has special strategic importance or is related to the "Made in China 2025" program
We will continue to monitor this situation closely and keep you informed.