While public hearings regarding proposed tariffs on $200 billion worth of Chinese products have wrapped up this week, the public comment period doesn’t close until September 6, 2018. Affiliated Attorneys Jessica Rifkin and Ben England recently spoke with an importer who attended two days of the hearings. She noted that the committee did ask a question of each person who testified, but rarely had follow-up questions. Numerous testifiers indicated that there are few alternative sources for many of the products in question.
This latest round of tariffs (commonly called “List 3”) was proposed on July 11, 2018. It includes a much wider range of products than the previous tariffs, commonly referred to as “List 1” and “List 2.” In addition to seafood, as we previously reported, many other human and animal foods and ingredients are listed, including vegetables, nuts, fruits, and grains. Among the over 6,000 products are color additives, cosmetics, fabric, furniture, metals, paper, tires, tobacco, and vehicle parts. These tariffs are expected to take effect in late September; however, whether they will be imposed at the originally proposed 10% level or increased to 25% remains unknown at this time.
What Options Exist for Impacted Companies??
Companies impacted by the earlier 25% List 1 tariffs (which took effect on July 6, 2018) can request an exclusion for a particular product if it meets certain criteria. This window closes on October 9, 2018.
List 2 tariffs went into effect on August 23, 2018. The U.S. Trade Representative has announced that, like the List 1 tariffs, it will accept requests for exclusion for particular products from the List 2 tariffs; it will issue a notice shortly setting out the due date and requirements for those exclusion requests.
Individuals and companies can still submit written comments to the U.S. Trade Representative about the most recent (List 3) proposed tariffs. That comment period ends September 6, 2018. We expect that if this recent round goes into effect, there will be a 90-day time period to file for exclusion requests, likely closing in late December 2018.
Otherwise, companies should be using this time to confirm the classification of likely impacted goods through the HTS (Harmonized Tariff Schedule) codes, assess existing contracts with customers and suppliers, evaluate alternative supply chains, and consider negotiating new business relationships. Just as important, cautions Ms. Rifkin, is what companies should not be doing, “Customs is going to be looking carefully for evasion. Simply transshipping goods through another country or reclassifying goods without adequate justification in an attempt to avoid tariffs at the border is very risky activity with the potential for steep penalties.”
The regulatory consultants of FDAImports.com and our affiliated attorneys can help you evaluate your options, including contract review and product classification. Contact us at contact@fdaimports.com today.
This blog is provided for informational and educational purposes only and does not constitute legal advice, and is not intended to form an attorney-client relationship. Please contact your regular FDAImports representative for additional information.
