Supply chain location changes are difficult and take time, so companies are turning to other ways to avoid or reduce Sections 301 and 232 tariffs, experts said at a March 7 Georgetown Law International Trade Update (see 1903070033) panel on the Trump administration and the supply chain. For steel and aluminum imports, there's been "a big uptake in foreign-trade zones," said Lynlee Brown, a senior manager at Ernst & Young. With Section 301, companies are using drawback, and after a recent CMS message, they may be taking advantage more often of substitution drawback. But the best bang for the buck, Brown said, is in customs valuation. Companies are making changes there not only because of Section 301, but also because of the administration's tax reform.

General Electric’s trade policy director doesn’t buy the conventional wisdom that it’s too hard for U.S. companies to source goods from countries other than China to escape the Trump administration’s Section 301 tariffs on Chinese goods, he said Tuesday. “Supply chains are actually kind of flexible," Drew Quinn told an International Trade Association workshop on Asia. He conceded he agrees with those who argue not many countries of origin can match the skills or scale found in China. Legislation introduced last week in the House (HR-1452) and Senate (S-577) to mandate an exclusion process for the List 3 tariffs that took effect Sept. 24 would grant exemptions to goods “not commercially available” outside China, or not produced outside China ”at a cost-competitive price at commercial scale,” as International Trade Commission data would define that (see 1903010031). GE hasn’t heard back from the Office of the U.S. Trade Representative about any of the 25 exclusion requests it made to exempt power, aviation and healthcare goods from the List 1 tariffs, said Quinn, a former deputy USTR. He worries that only List 3 tariffs would be lifted in a U.S.-China trade deal, he said: "We hope that List 1's 25 percent tariffs does not become the new normal."

Two hand tool sets that undergo some work in China are not subject to the Section 301 tariffs because the sets are classifiable based on the ratchets, which are of Taiwan origin, CBP said in a Feb. 14 ruling N301954. Apex Tool, through Sandler Travis lawyer Marilyn-Joy Cerny, sought CBP's advice on classification, marking and the country of origin. Unlike another recent ruling involving Cerny and Apex Tool that found the Section 301 tariffs do apply (see 1810100040), CBP said the set can be classified through General Rule of Interpretation (GRI) 3.

American manufacturers expect a trade deal between the U.S. and China to be announced within “the next couple of weeks” but think tariffs on Chinese goods will likely remain in place for longer, said Ryan Ong, director of international economic affairs policy for the National Association of Manufacturers. Ong, speaking at an export controls and customs information session at KPMG offices in Washington on March 6, said the increasingly “intense negotiations” between the U.S. and China during the last few months suggest a deal is close.

Section 301 tariffs on Chinese imports have had a diverse impact on electronics companies serving the custom installer industry, according to manufacturers at the ProSource Summit Expo in Nashville on March 3. Origin Acoustics has seen a wide variety of impacts within its product line, CEO Nick Berry told Consumer Electronics Daily, a sister publication to International Trade Today. Passive speakers, which lack a built-in power source, have been relatively immune, but the effect on amplifiers has been “extreme,” he said. Tariffs on a container of electronics that Origin imported from China in December cost the company more than all the tariffs it paid the prior year, he said. The hike in the duty rate to 10 percent from 1 percent -- “an extreme scenario” -- was going to be a “clear negative” to the balance sheet, so the company, entering its fifth year in business, implemented its first-ever price increase for 2019, he said.

NASHVILLE -- The Section 301 tariffs on Chinese imports have had a diverse impact on electronics companies serving the custom channel, we found in interviews with manufacturers at the ProSource Summit Expo Sunday.

A deal is shaping up with China that would lift most of the Section 301 tariffs on Chinese imports, according to a report from The Wall Street Journal. The article cautioned it could still fall apart over enforcement, or over political pressures on either side that the deal is too favorable to the other country. President Donald Trump tweeted that "I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.) based on the fact that we are moving along nicely with Trade discussions.... and I did not increase their second traunch [sic] of Tariffs to 25% on March 1st. This is very important for our great farmers - and me!"

International Trade Today is providing readers with some of the top stories for Feb. 25 - March 1 in case they were missed.

General Electric, a major U.S. exporter, remains supportive of "the notion of trying to open markets," said Drew Quinn, director of trade policy at GE. But, the tariffs the U.S. is using to try to bludgeon China into a more open stance are worse than the status quo, he said. Quinn, who was speaking at a March 5 Washington International Trade Association program on Asia, said that tariffs are generally pretty low on the aircraft engines, MRI machines and turbines it sells. There aren't a lot of investment barriers, either. "The biggest issue for us is the host country's industrial policies, and how they favor their national champions," he said. But even there, Quinn said, GE has found a way to work with foreign countries where it has facilities, and has been able to participate in subsidies. "We may have a different and less absolutist position than some people."

The unidentified Orlando-area tech firm Rep. Stephanie Murphy, D-Fla., spotlighted at last week’s House Ways and Means Committee hearing as typifying small businesses hurting from the Section 301 tariffs on Chinese imports (see 1902280010) sells aftermarket automotive electronics to Best Buy and Crutchfield, plus small independents, we learned from several informed people. It’s a CTA member and longtime CES exhibitor but wants to stay anonymous for reasons undefined.