China’s ‘Retreat From Specific Commitments’ Sparked Trump to Hike Tariffs, Says USTR Notice
Those who took as bluster President Donald Trump’s tweeted threat last weekend to hike the List 3 Section 301 tariffs to 25 percent came to the realization Wednesday the rate increase is real and looms less than 48 hours away. A notice set for publication in Thursday’s Federal Register says the rate hike will take effect 12:01 a.m. EDT Friday, turning Trump’s tweet into the force of law.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
U.S. Trade Representative Robert Lighthizer ordered the rate hike at Trump’s direction, “in light of the lack of progress” in negotiations with the Chinese on a trade deal since March, said the notice. “In the most recent negotiations” last week in Beijing, “China has chosen to retreat from specific commitments agreed to in earlier rounds” of talks, it said.
Lighthizer didn’t disclose publicly the specific terms on which he alleges China reneged. The disclosure suggesting an impasse dating to March in the talks doesn’t square with recent Trump administration statements that a comprehensive trade accord was near (see 1905060015).
The details of a newly created List 3 exclusion process will be spelled out in a separate notice, said the document. Lighthizer had held out against an exclusion process for as long as the List 3 tariffs stayed at 10 percent but recently caved to congressional pressure and said he will install one by the end of the month (see 1905020037). Wednesday’s notice officially raising the tariffs to 25 percent made his concession to Congress a moot point.
Customs expert Ted Murphy with Baker & McKenzie interprets two exemptions in the notice as sparing U.S. importers the rate hike if they already have merchandise en route from China, he blogged Wednesday. Customs and Border Protection will continue to duty that merchandise at 10 percent, he said.
Though the exemptions “will likely be a welcome accommodation to companies with shipments on the water, it may lead to some confusion at the border,” said Murphy. He said he presumes CBP “will issue further guidance on the type of proof needed to demonstrate that a given shipment was exported to the United States before May 10,” such as bills of lading, he said. CBP didn’t comment.
The administration “is only hurting American businesses, farmers and consumers by raising tariffs to 25 percent,” emailed National Retail Federation spokesperson Bethany Aronhalt Wednesday. “Instead of doubling down on this flawed strategy, the administration should be working with our allies to put pressure on China to change its unfair trade practices. Tariffs are taxes on Americans, period.”
The Telecommunications Industry Association is “greatly concerned” the administration “announced the imposition of an additional tax on imports to take effect with little advance notice,” said Cinnamon Rogers, senior vice president-government affairs. “The 25 percent duty as described will impact products essential to the functioning of our country's telecommunications networks, ultimately resulting in significant new costs for American consumers.”