SEMA eNews Vol. 22, No. 9, February 28, 2019

President Delays Tariff Hike, Cites Positive U.S./China Trade Negotiations

By Washington, D.C., Staff

President Trump has delayed a scheduled increase in tariffs on certain Chinese products, noting that U.S. and Chinese negotiators had made substantial progress in resolving trade disputes. Ten percent tariffs on $200 billion worth of Chinese goods that were scheduled to rise to 25% on March 2 have been postponed for an unfixed period of time. The 10% tariffs were imposed last September. The tariffs were in addition to 25% tariffs imposed on $50 billion worth of Chinese products.

“SEMA welcomes progress in the talks between the United States and China to resolve trade disputes,” said SEMA President and CEO Chris Kersting. “SEMA supports the administration’s efforts to address China’s unfair trading practices, but the use of tariffs as a negotiating tool has caused harm to many SEMA member companies.”

U.S. and Chinese officials are drafting six separate agreements that will cover agriculture, services, non-tariff barriers, currency, intellectual property rights and forced technology transfers, and cybersecurity.

In related news, the U.S. Trade Representative (USTR) will soon create an exclusion process for the tariffs imposed on the $200 billion worth of Chinese goods. Companies will be able to obtain an exclusion if they can demonstrate that the product is available only from China, that the duties will cause severe economic harm, and that the good is strategically important. The exclusion request process was mandated under the spending bill signed into law in late January to reopen the federal government. Companies were able to seek exclusions for the 25% tariffs imposed on the $50 billion worth of products but not the 10% tariffs. SEMA will provide a link to request an exclusion when it is published by the USTR.

To follow is a summary of the current tariffs and Harmonized Tariff Code listings.

Chinese Products: 25% tariffs have been imposed on $50 billion worth of Chinese imports, and 10% tariffs on another $200 billion worth of goods. The imposition dates for the $50 billion tariffs were staggered: July 6 for $34 billion and August 23 for $16 billion. Tariffs for the $200 billion in goods began on September 24, 2018.

$34 billion: 818 Harmonized Tariff Code listings, including miscellaneous metal and rubber parts for auto equipment, machinery, tools, measurement and medical devices: USTR China Tariff List 1

$16 billion: 279 Harmonized Tariff Code listings, including many types of plastics: USTR China Tariff List 2  

$200 billion: 5,745 Harmonized Tariff Code listings, including many auto parts, from engines and metal fasteners to tires, steering wheel components, rubber gaskets, transmission belts, brake pads, windshields and suspension springs:  USTR China Tariff List 3

For more information, contact Stuart Gosswein at stuartg@sema.org   

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