President Hedging as March 1st Tariff Increases Loom, Exclusion Process for Tariffs on List 3 Products Coming

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President Hedging as March 1st Tariff Increases Loom, Exclusion Process for Tariffs on List 3 Products Coming

Author: sales@jsconnor.com

20-Feb-19

President Hedging as March 1st Tariff Increases Loom, Exclusion Process for Tariffs on List 3 Products Coming

Importers from China have been trying to maximize shipments for the last 6 months or so, where possible, to avoid the scheduled tariff increases from 10% to 25% which covers about half of U.S. imports from China. The deadline was recently moved from January 1st to March 1, 2019 if U.S. and China trade negotiators could not reach agreement to address unfair Chinese trade practices.

The Administration has recently made statements indicating that the March 1st deadline could be extended if negotiators were making sufficient progress toward satisfactory resolution of the issues. A Chinese trade delegation is due in Washington next week and many observers are hopeful that another agreement to extend the deadline will be forthcoming.

It is anyone's guess at this point what will happen over the next week. U.S. importers, and indeed the world trade community, are waiting anxiously to hear the outcome.

Meanwhile, the bill that was signed into law on February 15, 2019 averting another government shutdown also contained some good news for importers. Unlike the process established for requesting exclusions for products on Lists 1 and 2 from China ($50 billion worth of goods), no such process had been established for the $200 billion of goods on List 3. The recent law however, included a provision requiring the USTR to establish an exclusion process for List 3 items. By March 17th the USTR is required to report to Congress on the status of for the List 3 exclusion process.

Perhaps the exclusion process will be improved for List 3 but this another question we wait for answers on. Hopefully the tariffs will not be increased to 25% but we will continue to monitor and keep you advised.