There have been many recent developments in the trade negotiation process that prompted the United States to increase duties on certain Chinese products worth approximately $200 billion of import value as of May 10, 2019. The Chinese government announced yesterday that it will increase sanctions on $60 billion worth of U.S. goods as of June 1, 2019.
The United States currently has three lists in place for Chinese products subject to sanctions under Section 301. Lists # 1 and 2 are at 25% additional duties. List #3 has been increased to 25% as well, but goods could still pay 10% if they are exported from China prior to May 10, 2019, and entered for consumption between May 10, 2019 and May 31, 2019. The total value for products under the three lists is $250 billion.
China has its own lists of U.S. goods subject to sanctions. The scheduled increases are as follows: List #1 from 10% to 25%, List #2 from 10% to 20%, and List #3 from 5% to 10%. List #4 will be subject to a 5% tariff. The total value for products under the four lists is $110 billion.
The U.S. Trade Representative (USTR) has announced that under the direction of the President, new products worth $300 billion would be subject to 25% additional duties. This would become List #4. The USTR is seeking public comments and will hold a public hearing regarding this proposal on June 17, 2019. If sanctions are implemented for this group, even wearing apparel and footwear will be subject to additional tariffs, and all commodities will likely be affected. A full list of classification numbers and product descriptions are included in the USTR notice attached.
There are also three groups of product exclusions granted to goods covered by List #1, and a fourth group should be announced in the Federal Register soon. Qualifying products are eligible for duty refunds provided that the proper claims are timely filed with U.S. Customs.