Next Round of Tariffs to Hit Key Active Ingredients
The U.S. Trade Representative announced a potential fourth round of tariffs on $300 billion worth of imports, which capture nearly all remaining Chinese-origin chemicals, except certain pharmaceuticals and rare earth minerals.
Products on the Tranche 4 list could face duties up to 25%. There are major impacts to high-volume agrichemicals, some of which were previously de-listed from earlier lists. Some of the key active ingredients include glyphosate, 2, 4-D, glufosinate, atrazine, and dicamba.
- June 10, 2019: Due date for filing requests to testify and a summary of expected testimony at the public hearing.
- June 17, 2019: Due date for submission of written comments.
- June 17, 2019: Section 301 Committee public hearing at U.S. International Trade Commission.
- Seven days after the last day of the public hearing: Due date for submission of post-hearing rebuttal comments.
“Dates regarding the Tranche 4 tariffs coincide with an expected meeting between Presidents Trump and Xi at the G20 summit in late-June. President Trump has not decided whether to impose the tariffs on Tranche 4, but will likely have the final list ready if negotiations fail or stall before the G20 meeting,” Jim DeLisi, President of Fanwood Chemical, tells AgriBusiness Global.
The Tranche 4 announcement follows the action by the U.S. on May 10 to raise an existing 10% tax on many Chinese imports, including many agrichemicals, to 25%.
While many importers were willing to absorb the 10% increase that affected 50% to 60% of active ingredients coming from China, it will be much harder for them to simply absorb the additional 15%, DeLisi says of the most recent tariff hike. Many will start looking for other chemistries.
The tariff increase could even have implications for some products labeled “made in the USA,” since those products still require intermediates that come from China, he says.
The National Association of Chemical Distributors expressed concern over the tariffs and the “negative impact” they will have on chemical distribution industry.
Regarding the tariffs, NACD President and CEO Eric R. Byer said, “While addressing China’s unfair trade practices is an important endeavor, we urge the Trump administration to rethink this approach and use alternative measures to level the playing field without harming America’s job creators.”
“Addressing China’s improper trade practices is critical to balancing the U.S.-China trade relationship and growing the U.S. economy. However, an escalation in protectionist policies will hinder the economic progress made over the last two years and negatively affect the American public. In light of the increased List 3 tariffs, NACD urges the Trump administration to work expeditiously with the Chinese government to eliminate these tariffs on importers that will otherwise harm American manufacturers and consumers,” according to a statement from NACD.
Be sure to attend Jim DeLisi’s webinar “Tariffs and Global Crop Protection: What’s Next in the U.S.-China Trade War?” on June 5. Register now >