On Sunday, May 5, President Trump took to Twitter to announce the tariff rate on the Section 301 List 3 tariffs would increase Friday, May 10. According to Trump, he is increasing the tariffs from 10% to 25% since negotiations with China are moving “too slowly” with China’s attempt to renegotiate. Trump also tweeted that additional goods “will be shortly” taxed at a rate of 25%. The move comes even as a delegation of Chinese officials are still expected in Washington on Thursday and Friday this week. The official update to the Section 301 Action for U.S. imports from China is scheduled to be posted in the Federal Register tomorrow, May 9, 2019. An unpublished notice, including a statement that the rate of additional duty will increase to 25% from 10% (for the products covered by the September 2018 action) on May 10th, 2019 is currently available here. It should be noted that the language used regarding the effective date somewhat varies from previous announcements; it refers to both entry and export date. Please note that only official postings in the Federal Register equate to legal notification to the public.
For reference, the third list of Chinese goods included in Section 301 tariffs on over $200 billion dollars’ worth of products was to be increased on March 1, 2019 from 10% to 25%. However, the increase was delayed by President Trump in February as the negotiations between the U.S. and China were making “substantial progress.” U.S. Trade Representative Robert Lightizer has stated recently that while the U.S. is not breaking off talks, it has become clear that China is not living up to their trade commitments.
A full list of the HTS codes is available on the Federal Register. See an all-inclusive list of goods identified as part of the Section 301 additional tariffs here, including exclusions and removals. Until we have clarification on the effective date, this list is not yet reflective of the expected changes.
In light of this development, it is worth noting that if it is clarified the effective date is based solely upon first arrival into the U.S. importers may want to consider an option to select an appropriate entry date that is within the vessel’s arrival in the port. This allowance is made in 19 C.F.R. §141.68(a)(3), which states: “the ‘time of entry’ will be…the time the merchandise arrives within the port limits, if the entry documentation is submitted before arrival, and if requested by the importer on the entry documentation at the time of submission.” Pre-filing is crucial in this case to take advantage of this option by Friday, May 10.
Mallory Alexander’s consulting arm, M-PACT Solutions, is also available to assist with any inquiries regarding the new tariffs and classification questions regarding your products. Contact M-PACT Solutions at firstname.lastname@example.org.