China will impose tariffs on about $75 billion worth of U.S. goods in retaliation for the coming 10 percent Section 301 tariffs on $300 billion in Chinese goods, China’s State Council said, according to an unofficial translation. China said it will impose either 10 percent or 5 percent tariffs on more than 5,000 U.S. products. The tariffs will be imposed in two separate batches on Sep. 1 and Dec. 15, China said.

BJ’s decisions to “diversify” its supply chain give the warehouse-club retailer “significantly reduced” exposure to the 10 percent List 4 Section 301 tariffs on Chinese goods compared with the competition, said CEO Chris Dawson on a fiscal Q2 earnings call Thursday. BJ’s started “several years ago” to “reduce reliance on China by sourcing high-quality products from other markets in both Asia and Africa,” he said.

Target remains “mindful of the volatility and uncertainty in the marketplace, including the timing and extent of additional China tariffs,” CEO Brian Cornell said on a Q2 earnings call Aug. 21. Noting that List 4 Section 301 tariffs at 10 percent are set to hit Sept. 1 on apparel, TVs, toys and home goods, Cornell said Target is following developments carefully: “We’re encouraged that many items originally slated for tariff increases in September have now been delayed until later in the year,” he said of the List 4B tariffs deferred until Dec. 15. As long as the trade situation with China “remains fluid,” he said, “it will present an additional layer of uncertainty and complexity as we plan our business.”

Misinformation abounded in a Section 301 tariffs “update” the Sports & Fitness Industry Association sent to its membership Wednesday. List 3 tariffs “currently at 10% on $200 billion in imports,” wrongly said one bullet point. “President has threatened to raise them to 25%.” President Donald Trump did hike List 3 to 25 percent May 10 when his administration accused China of reneging on previous commitments in the trade talks (see 1905060015). Another errant bullet point said the new 10 percent List 4A tariffs taking effect Sept. 1 (see 1908130028) “will be applied to any product not entered for U.S. consumption by midnight August 30, 2019.” The actual deadline is midnight Aug. 31. We brought the errors to the attention of SFIA, where a spokesperson emailed Wednesday that “all is corrected now.”

The Office of the U.S. Trade Representative posted the transcript of the Aug. 19 hearing on the Section 301 investigation in response to France's digital services tax (see 1908200020).

It’s “undeniable” that “uncertainty” in China has increased as the U.S.-China trade war “escalated,” said Photronics CEO Peter Kirlin on a fiscal Q3 call Tuesday. Demand for the photo masks that Photronics supplies to the display industry is “design-driven” and “not necessarily” tied to unit sales of displays, he said. But “uncertainty can cause some customers to become more cautious and slow the rate of new product releases, thus impacting our business,” he said. China is 53 percent of Photronics flat-panel display revenue, he said. Kirlin thinks the trade war's “long-term” impact will be “a significant positive for our business,” because it significantly raises the opportunities of Chinese customers “to fully localize their supply chain,” he said. The short-term impact will be negative, but it’s “hard to really gauge in the next few months what the real impact looks like, because it’s a dynamic situation,” he said. Kirlin spent the first two weeks of August visiting customers in China, he said. Two or three months ago, the trade war “really wasn’t present in the active dialogue,” he said. “Now it’s on the tip of almost every customer’s tongue.” The threat of the 10 percent List 4 Section 301 tariffs, which President Donald Trump announced Aug. 1 on Twitter (see 1908010059), “was hanging out there regarding the largest export market,” the CEO said of Chinese customers selling goods to U.S. importers. “Who knows what tomorrow’s Twitter feed will bring?” Tariffs take effect Sept. 1 on finished TVs from China, but duties on smartphones, laptops, tablets and other consumer tech goods were deferred to Dec. 15 (see 1908130028).

Riding Q2 comparable sales that grew 3.4 percent, with a 2.4 percent rise in store traffic, Target is projecting similar sales growth for Q3, CEO Brian Cornell said on a Q2 earnings call Wednesday. But management is “mindful of the volatility and uncertainty in the marketplace, including the timing and extent of additional China tariffs,” said the CEO.

The Office of the U.S. Trade Representative is seeking Office of Management and Budget approval to renew its exclusion request form for Section 301 tariffs, USTR said in a notice. The form was previously approved by OMB under an "emergency" review (see 1906170025) and is set to expire at the end of the year, USTR said. The burden estimate for the form was also revised, based on comments received in response to the emergency processing notice, the agency said.

CBP should be ready for when the next round of Section 301 tariffs take effect on Sept. 1, and multiple preparations are ongoing, CBP Acting Commissioner Mark Morgan said during the Aug. 21 Commercial Customs Operations Advisory Committee meeting in Buffalo, New York. While some products won't be tariffed until December (see 1908130018), "duties on a significant number of fourth tranche goods are still anticipated to go into effect Sept. 1, which is just a little over a week from now," he said. "CBP is prepared to implement this latest round of duties as it has been with all the other rounds." The agency has been working with "USTR to obtain a final list of the goods subject to tariffs, even though it started to change a little bit," will "make the necessary program changes to ACE" and "ensure trade stakeholders have all the information they need to file a proper entry."

U.S. Trade Representative Robert Lighthizer expects Canada's Parliament to continue progress on the U.S.-Mexico-Canada Agreement in the fall following October elections, he said in recently posted written responses to House Ways and Means Committee members following a June 19 hearing (see 1906190062). "The Trudeau government has begun necessary steps to ratify the USMCA in its Parliament and has stated that it plans to move forward on implementation in tandem with the United States," he said. "The Canadian Parliament has adjourned for the summer and is not expected to return before federal elections are held on October 21, 2019. We anticipate that Canada will take up the legislation once a new government is seated later this fall, and we are confident that the Parliament will vote in favor of the Agreement."