Update 08/15/19
The USTR has confirmed, as we expected, that the additional 10% will be applied based on entry date for both List 4A and 4B.
Original Post 08/14/19
On Tuesday, August 13th the United States Trade Representative (USTR) announced additional details regarding the imposition of the latest tranche of Section 301 tariffs on Chinese-origin products (commonly called “List 4”). The USTR had previously announced that 10 percent tariffs would be imposed on List 4 goods as of September 1, 2019. On August 13th, the USTR clarified that the List 4 tariffs will be split into two lists – one, List 4A, will go into effect September 1st, and one, List 4B, will go into effect December 15th.
While it is currently unclear whether the September 1st and December 15th effective dates refer to the date of exportation from China or date of entry into the United States, we believe the safest approach until more definite information becomes available is to assume the effective dates refer to the date of U.S. entry. The List which will go into effect September 1st (List 4A) covers significantly more tariff lines than the List which will go into effect December 15th (List 4B). Among other items that may be of interest, List 4A includes various meats, cheeses, milk products, yogurt products, fats and oils, nuts, fruits, coffees, teas, spices, sugar and confectionary products, juices, and other food preparations.
The chemicals and chemical products of Chapter 29 which were originally included on List 4 have largely been deferred to List 4B, which goes into effect on December 15th. Other products on List 4B include apparel, footwear, computer equipment, and other goods. While most of the food products which will be subject to List 4 tariffs are on List 4A, List 4B also includes a few food products such as certain Alaska Pollock and certain nuts.
Additionally, the USTR announced that certain products have been removed entirely from the final version of List 4 (i.e., they are on neither List 4A nor List 4B) based on health, safety, national security, and other factors and will not face additional tariffs of 10 percent. These products include such goods as certain fish products such as frozen salmon and cod fillets, certain chemicals, certain printed materials such as Bibles, and certain child safety products. Importers should carefully examine the lists published by the USTR to determine if their products are covered.
Finally, the USTR also announced that it will be establishing an exclusion process for List 4. We will provide more information on this exclusion process as it becomes available.
Delay on Some Chinese Goods saves the Holidays
Ben England weighed in, “To avoid being lampooned as the Grinch, the Administration announced plans to delay implementation of the 10 percent tariffs on about $155 billion worth of Chinese items (List 4B) until December 15, 2019. List 4A tariffs on about $110 billion worth of Chinese goods will still go into effect beginning September 1, 2019. One of the big concerns regarding the September 1st date was the undeniable and unavoidable effect on U.S. retailers just as they would be stocking up for the Hanukah, Christmas, New Year’s Eve and Valentine’s Day holidays.” Ten percent on top of what retailers were already contracted to pay for goods from China (e.g., laptops, toys and games) would come directly out of the pockets of the U.S. retailers and therefore U.S. consumers. U.S. companies would not have been able to renegotiate prices with Chinese suppliers given the short notice on the September 1st date. Consumers will likely still feel the effects of food and other consumer items on list 4A with this September 1st implementation, but the impact is greatly reduced.
If your business is impacted by the tariffs, contact us to discuss your options with one of our affiliated Customs attorneys.
