Where It All Began
- It all began with the U.S. Administration’s stated concerns that China Trade Practices are doing seriously harm to U.S. companies at home and abroad, as well as limiting U.S. companies’ ability to export U.S. products to China.
- China uses joint venture requirements, foreign investment restrictions, and licensing processes to require U.S. or pressure technology transfers from U.S. companies.
- China deprives U.S. companies of the ability to set market-based terms in licensing and other technology related negotiations.
- China directs and unfairly facilitates the systematic investment, and acquisition of, U.S. companies and assets to generate large-scale technology transfers.
- China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
- Some of the retaliation from China as well as the USA’s other trading partners is also related to the fact that the U.S. imposed tariffs on steel and aluminum imports earlier this year.
- USTR’s concern is that the WTO was not designed to handle trade issues with a major economy that is not strictly motivated by the need to “make a profit.”
Other Related Issues
- The Chinese have retaliated and will likely continue to retaliate until there is some form of negotiated settlement.
- This retaliation is having a significant impact on U.S. farmers.
- The new retaliation lists hit almost every product that the Chinese import from the U.S.
- Since China does not import from the U.S. nearly as much as they export to the U.S., they have effectively run out of bullets to retaliate “tit for tat.”
- Both countries retaliation list include tariff lines where there is currently no trade!
- President Donald Trump has announced his intentions to place similar levies on all of the rest of Chinese exports if there is no solution.
- China has begun penalizing U.S. companies in China and will likely begin collecting tariffs on their exports to the U.S. on sensitive items such as rare earth metals.
What You Should Do
- If you have products on Tranche 1, you should consider visiting this dedicated U.S. Trade Representative website to request an exclusion.
- If you have products on Tranche 2, once the new Federal Register notice is issued, plan to file for individual product exemptions.
- Tranche 3:
- Now that the list has been published, it needs to be carefully reviewed to see if products of interest to you are included.
- Prepare to request exemptions, if and when USTR publishes a procedure for handling such requests.
- In the case of each of these Tranches, please be aware that if exemptions are granted, all importers will benefit from such exemptions, and any duties collected will be refunded. Therefore, prepare your invoicing system to keep track of these duties as your customers will be expecting refunds.
- With all tranches, these tariffs should be considered surtaxes, unless the final federal register notice declares otherwise for items recently approved for Temporary Duty Suspensions.
- Customs has issued a ruling that these tariffs can be included in duty drawback filings.