July 9, 2018 Updates

Retaliatory Tariffs Against U.S. Enacted by China and Mexico Last Week

On July 6th, after the additional 25% tariffs on over $34 billion of Chinese goods went into effect, China reacted by enacting additional tariffs of 25% on over 545 products originating from the United States, also valued at $34 billion. These tariffs cover commodities such as agricultural products such as beef and dairy, automobiles and aquatic goods. Additionally, China plans to enact additional tariffs on 114 products originating from the United States, valued at $16 billion should the U.S. enact additional tariffs. These commodities include chemical products, medical equipment and energy products.

Last week also saw Mexico imposing its second round of retaliatory tariffs against the U.S. on dozens of U.S. goods valued at nearly $3 billion. Like China, Mexico is focusing on U.S. agricultural exports including, pork, apples, cranberries, cheeses, etc…. These tariffs are in direct response to the steel and aluminum tariffs against Mexico, Canada and the EU that went into effect on June 1st.

Updated CBP Guidance on Chinese Goods Subject to Tariffs

In the CSMS #18-000419 message released on July 3, U.S. Customs and Border Protection has updated their guidance on filing requirements for goods imported from China that are subject to the additional 25% tariff that went into effect July 6.  The final list of products covered by the Section 301 action was published by the United States Trade Representative (USTR) in the June 20 edition of the Federal Register.  Found in Annex A, this list comprises over 800 eight-digit HTSUS numbers. Any article covered by this list that is a product of China is subject to a 25% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading. In addition to reporting the Chapters 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.01 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy:  9903.88.01: 25% ad valorem additional duty for articles the product of China.

Chapter 98

The rates of duty imposed by subheading 9903.88.01 shall not apply to products for which entry is properly claimed under a heading or subheading in Chapter 98.

Trade Preference Programs

Products from China subject to the Section 301 trade remedy that are eligible for special tariff treatment under General Note 3(c)(i) to the HTSUS shall be subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.01.

Foreign Trade Zones

Per the Federal Register Notice published by the USTR, any product listed in Annex A, except any product that is eligible for admission under ‘domestic status’ as defined in 19 CFR 146.43, which is subject to the additional duty imposed by this determination, and that is admitted into a U.S. foreign trade zone on or after 12:01 am eastern daylight time on July 6, 2018, only may be admitted as ‘privileged foreign status’ as defined in 19 CFR 146.41. Such products will be subject upon entry for consumption to any ad valorem rates of duty or quantitative limitations related to the classification under the applicable HTSUS subheading.

Drawback

Section 301 duties are eligible for duty drawback

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