As we start the new year there has been some thawing and improvement in the trade environment but still some uncertainty looking forward. This is just to summarize what has happened recently as we all plan for 2020.
The most significant development was the Phase I deal between the U.S. and China which is scheduled to be formally signed in Washington on January 15, 2020. You will recall that this agreement cancelled the planned 15% increase in U.S. tariffs on Chinese goods worth $160 billion scheduled for December 15th. It was announced in October and impacted many consumer products (i.e. holiday gifts) such as cell phones, laptops, shoes and wearing apparel. Existing tariffs of 15% on another $120 billion worth of Chinese goods were halved to 7.5%. In exchange, China has agreed to purchase $50 billion worth of American agricultural products and take steps to tighten intellectual property protections.
These are all positive welcome developments although there are still 25% tariffs on $250 billion worth of imports from China coming into the U.S. And there are still questions in the minds of many as to how some of these changes will be implemented.
Regarding tariffs on Chinese goods it should be kept in mind that, although the exclusion application for List 1, 2, and 3 tariffs are now closed (with approximately 50 percent from these lists being approved), you may also have the right to the benefit of exclusions granted to other importers, including those of your competitors.
If your products are covered by exclusions granted to other importers, you can utilize the exclusion for entries of your own goods going forward, so long as you properly identify the exclusions on your entries. But the greatest benefit of a granted exclusion may lie in utilizing the exclusion to obtain refunds for duties paid on your past entries. So long as your goods are covered by the granted exclusions, you can obtain such refunds on exclusions granted to other importers, If you take certain actions with CBP to preserve your right to refunds, including filing protests with CBP within 180 days of the liquidation of each entry. Please contact firstname.lastname@example.org for more information if your product qualifies for granted exclusions.
We also have the revised NAFTA agreement known as USMCA which has been modified and passed in the House and hopefully will receive final ratification by all three countries early in the new year. This could provide a significant boost in trading opportunities among the U.S., Mexico, and Canada. Until final approvals happen NAFTA is still in effect.
If there is a dark cloud on the horizon it is the fact that U.S. Administration officials are indicating a hard look at new, increased tariffs on goods from the EU.
Be assured we will continue to monitor all these situations and encourage importers and exporters to do the same as it relates to your particular industries. Please feel free to contact us if you have any questions.
Best wishes to all for a Happy, Healthy and Prosperous New Year.