Updated Timeline of Trade War
Tariffs on over $200 billion in imported goods from China went from 10% to 25% Friday, May 10. According to U.S. Treasury Secretary, Steve Mnuchin, the talks with representatives from China were “constructive”, but offered little more detail than that. However, according to a document in the Federal Register, commodities in transit from China prior to May 10 are exempt from the new tariffs.
According to a document in the Federal Register, the tariffs apply to goods “entered for consumption, or withdrawn from warehouse for consumption” and goods “exported to the United States on or after May 10, 2019”. At this point, the topic of exempt goods is still up for discussion according to a recent tweet from President Trump stating “waivers on some products will be granted, or go to new source!”. In addition to the newest tariff hike, Trump also announced on Friday that the White House has begun the process of applying the 25% tariffs to an additional $325 billion worth of Chinese imported goods which would make nearly every good imported from China subject to the 25% import tariffs.
Furthermore, in addition to the U.S. raising import tariffs 15%, China has announced they will be applying in kind countermeasures. Little detail is known on China’s response at this time. It is predicted that they will either implement more import tariffs or withhold necessary permissions for U.S. companies to operate in China.
Tariff Exclusions & Cost Mitigation
The recent 15% increase on Friday applies to all listed items on ‘List 3’ despite prior uncertainties regarding the items on this list. However, in the Federal Register document announcing the tariff increase, the document goes further to say that the USTR will be establishing a process by which businesses may submit requests for exemptions on the import duties. The USTR plans to publish a separate document highlighting the exclusion process, but an exact publish date has not been specified.
With the new duties applied, it is important to explore cost mitigation strategies. Of those strategies, President Trump cited in a recent tweet for businesses to explore new sourcing options, which seems to be the most notable cost mitigation tactic. For a full list of cost mitigation strategies click here. Additionally, spring and summer import volumes from China are expected to be exceptionally high as the U.S. explores a fourth round of tariffs on the remaining $325 billion in Chinese imports.
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