Section 301 Developing News
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Last month we left off with an understanding of where the United States and China currently stand in the Section 301 trade war. At the beginning of the year the United States initially planned to increase rates on list three items to 25%. However, the United States granted a 90 day period in which the rates on list three items would remain at 10%, allowing more time for an agreement to be made between both countries before raising the rates. The two countries are still trying to come to an agreement. Below are some updates on the trade war.
On Monday February 11, “the Dow Jones Industrial Average closed 53.22 points lower at 25,053.11, giving up an earlier gain of 90 points. The S&P 500 ended the day up less than 0.1 percent at 2,709.80 as gains in the industrials sector were capped by losses in health care and communications services. The Nasdaq Composite closed 0.1 percent higher at 7,307.90” according to CNBC. The United States is halted at a waiting point and not much fluctuation will occur as people are just waiting out to see the likelihood of a trade deal.
There is speculation that the two Presidents will meet in Florida within the next month or so. This week the United States and China will continue to try and strike a deal by focusing specifically on intellectual property. United States Trade Representative Robert Lighthizer wishes to operate in an environment where technology, innovation, and know-how are all protected.
Analysts expect a deal as early as the end of this month. China needs a deal badly to calm the United States’ President from imposing another round of tariffs on imports from China. It has been reported that last month, the Chinese economy grew at it’s slowest pace in 28 years.
A deal is on the horizon and drastic changes are in the near future. Stay updated on Section 301 news here on the DutyCalc blog.
Update Section 301
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The trade war between the U.S. and China continues to impact economies on both sides. Tariffs have caused the U.S. stock market to plummet as the changes have led to a disruption in supply chain for major companies like Amazon, Facebook, and Apple. In China, analysts have reported that economic growth has slowed to its lowest in ten years. Sure, investors and shareowners are worried, but the two countries are making progress towards repairing the trade relationship.
It has been confirmed that on December 1, 2018 the U.S. and China reached an agreement to delay an increase on list three products. The increase of 10% to 25% on U.S. products was originally set to begin on January 1st. However, according to the White House, there will be a 90-day extension. If no agreement is made within those 90 days, rates will then rise to 25%.
In addition, China has agreed to, “purchase a not yet agreed upon, but very substantial amount of agricultural, energy, industrial and other product from the United States to reduce the trade imbalance” (Crowell Moring). This agreement from China may be a policy change or may be left up to private sector entities. The commitment has not yet been confirmed.
Lastly, during the December 1st meeting China also agreed to reduce the tariffs on U.S. automobile exports down from 40%.
There is still a significant gap between what the U.S. is seeking and what China is willing to offer, but these minor changes and progressions seem to hint at a solution. What happens within the next 90 days will give us an idea of what might happen in the near future.
For more information on the Section 301 tariffs and updates on the U.S. – China trade war, check back in to the DutyCalc blog.
Section 301
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Last summer, Section 301 was heavily investigated, and the U.S. Trade Representative’s office concluded that Chinese trade policies are causing billions of dollars in damage to companies in the United States. Since then, the Trump Administration has come out with three lists of products in which the United States threatened to levy tariffs on listed items.
Since then, President Trump has imposed tariffs on $250 billion of imports from China into the United States. The reason being that Trump wanted, “to force concessions from Beijing on his list of demands for trade reforms. He had also threatened to target another $267 billion worth of goods if his demands are not addressed” (WSAU). A response from Chinese President Xi Jinping ensued shortly after in which he demanded that the United States lift tariffs, specifically the ones placed on aluminum and steel imports. Conflicting positions has led a Washington-based source to quote, “they are not close to a favorable deal on trade. Not in the same universe” (WSAU).
With all these conflicting positions in play, President Trump and Xi held a meeting in late November/early December to try and come to an agreement regarding high tariffs. From this meeting, recent news reportings have stated that Trump and Xi have, “agreed to keep their trade war from escalating with a promise to temporarily halt the imposition of new tariffs as the world’s two largest economies negotiate a lasting agreement” (Bloomberg). The two leaders have agreed to stop new tariffs and intensify their trade talks. From this the U.S. will still impose existing tariffs on $200 billion of Chinese goods at 10%. Additionally, the U.S. planned to raise rates at the beginning of this year to 25% but that has now been postponed due to the conclusion of the last meeting. 90 days from the date of the meeting, if there is no progress between both parties, the U.S. will then impose the 25% tariff rate.
As this is a major international conflict, both President Trump and Xi seem to want to strike a deal that serves as a benefit for both progressing economies. A deal is sure to come in the near future. Stay updated with current news by following the DutyCalc blog.
Section 301 status
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The new Section 301 tariffs have caused drastic changes within the industry. Importers and exporters are scrambling to obtain the newest information as there are thousands of product listings that are affected by Trump’s trade changes. Below is an update on the current status of Lists 1-3.
List 1, which contains $34 billion worth of imports, has been effective since July 7, 2018. List 1 originally had over 1,000 tariff lines but ended up being condensed down to 818 items.
List 2, which contains $16 billion worth of imports, has been effective since August 23, 2018. List 2 originally had over 284 tariff lines but ended up being condensed down to 279 items.
List 3, which contains about $200 billion worth of imports, has been effective since September 24, 2018. List 3 originally had over 6,000 tariff lines but ended up being condensed down to 5,745 items.
Though these lists of tariffs have been implemented, The Office of the U.S. Trade Representative, has provided an opportunity for the public to request for product exclusion. Giving companies the opportunity to address situations that allow exclusion of a specific product within a subheading but not the tariff subheading as a whole. Because of such a high volume of requests, the USTR is still currently in the process of posting final exclusions.
To take full advantage of duty drawback on the Section 301 duties, check out our full service and software drawback options. Duty Calc has already helped our customers claim thousands of dollars due to these new changes. With the right help, you can easily claim all duties that are available to you.
New changes are still to come in the near future which will continue to impact this industry. Duty Calc will keep all of our customers up to date to the best of our ability. Continue to check back in to the Duty Calc blog for updated information on Section 301 and new tariff information.
Section 301 News
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The recent activity regarding Section 301 tariffs have caused major changes for the import and export industry. List 1 and List 2 have been in effect since July, but the final list has officially been released and has been effective since September 24th of this year. List 3 includes a variety of imports from China which include products like chemicals, textiles, metal, and electronics. Tariffs for List 3 were set at an ad valorem rate of 10 percent but will increase to 25 percent at the beginning of the new year. List 3 targets about $200 billion worth of Chinese imports and unlike List 1 and List 2, there is no indication that there will be any kind of exclusion process for products in the final list.
Though List 3 was released less than a month ago, the administration threatened China with a potential List 4. This threat by the U.S. was publicly stated saying that if China retaliates against farmers or any other industries, they will begin to launch a process that aims to increase tariffs on an additional $267 billion worth of goods.
Because of these drastic changes in the industry, claiming duty is much more compelling. That being said claiming drawback is no simple process. Duty Calc is your number one resource for claiming up to 99% of the duty paid upon import. Through Duty Calc you have a full-service drawback option or, like many of our customers, you can do it yourself by using our easy to use drawback software. Our customer service team is always here to help so feel free to contact us with any questions. Our contact information can be found on the home page. Get a head start in claiming all the drawback available to you through our services. Act before it is too late.
