This upcoming Valentine’s Day will be a sweet one for many importers: tariffs are set to be reduced by half for more than $300 billion worth of imports from China on that day. The US Trade Representative has announced that that is the day that the new reduced tariffs on tranche 4 of the 301 tariffs will be reduced from 15% to 7.5%.
As part of the China phase 1 deal, the previous tariffs before this tranche, which fully went into place at 15% in September 2019, are slated for a reduction. However, that’s all that’s changing at this time with 301 tariffs out of China, as all previous tranches that still cover hundreds of billions of products are remaining in place. As of yet, there is no indication that the ongoing public health crisis in China will result in temporary reductions as relief, even as China reduces some of theirs to facilitate imports of needed products.
At the same time, new 301 tariffs loom from across the opposite ocean. Potential tariffs of up to 100% on things like European union are still possible, depending on the final decisions from the Trump administration. As of yet, it’s not quite sure when, or if, these will be implemented, but they will be similar to those implemented in China and will be eligible for drawback.
It’s not only section 301 duties that are changing, either. Last week, President Trump announced that additional duties on steel and aluminum under section 232 of the Trade Expansion Act of 1962 will be going into effect. There are major exceptions based on country of origin as notably Canada and Mexico are excluded from duties on both kinds of metals. Any importer of metals into the USA should check to see immediately if these new tariffs apply to their products.
Sincerely, James Rodgers