Fashion Intel & Analysis
The Office of the United States Trade Representative (USTR) announced today the next steps in the process of the List 4 China tariffs. The announcement said the Administration will delay the additional 10% tariffs on certain products, including “certain items of footwear and clothing” until December 15. Other products that will be excluded are cell phones, laptop computers, video game consoles, and certain toys.
USTR said that some products will be removed from the tariff list entirely based on health, safety, national security, and other factors. In addition, USTR intends to conduct an exclusion process for the additional tariff.
The announcement says additional details for the List 4 tariffs will be available later today and we will share that information when it is available.
The Office of the U.S. Trade Representative publishes in today's Federal Register the first list of product exclusions for items that appear on List 3 in the 301 case against imports from China. As you remember, the Administration raised the tariff to 25% earlier this summer and opened up the product exclusion process on June 30th. The USTR list covers 10 products, including high-tenacity polyester yarn not over 600 decitex (HTS 5402.20.3010). The product exclusions will be retroactive to September 24, 2018 and remain in effect for one year after the posting of the Federal Register notice. U.S. Customs and Border Protection (CBP) will issue instructions on entry guidance and implementation. The full Federal Register notice is available here.
USTR is continuing to accept exclusion requests for List 3 goods until September 30th. USFIA encourages all members to think about filing for product exclusions for any products that appear on List 3, including headwear, handbags, travel goods and leather products. To answer your questions about the product exclusion process, we are hosting a webinar with Associate Member Arent Fox on August 13th. The webinar is free for members and will cover the what, how, and when of the exclusion process- including an overview of the specific forms and guidelines, the deadlines for submitting the requests, and how to file responses to posted requests. Click here to learn more and register.
At this week's AGOA Forum in Cote d'Ivoire Deputy U.S. Trade Representative C.J. Mahoney said that the Trump Administration supports the African Continental Free Trade Area. In the statement from USTR Mahoney said "The United States and the African Union share a mutual desire to pursue deeper trade and investment ties beyond the African Growth and Opportunity Act, which is scheduled to expire in 2025, eventually leading to a continental trade partnership between the United States and Africa that supports regional integration."
Trade tensions continue to rise this week. Following a tweet by President Trump, the Treasury Department announced that they have named China a currency manipulator. While this designation has no immediate impact on trade, it does reflect an increase in the disputes between the U.S. and China. On the Chinese side, the Ministry of Commerce announced that Chinese-related companies would stop purchasing U.S. agriculture products. White House economic advisor Larry Kudlow tried to calm markets today by saying that the Administration still expects to hold negotiations with China in September.
Update on the China Tariffs
There remain a lot of unanswered questions about the Trump Administration action to impose tariffs on List 4 products on September 1st. Here is what we know so far:
What Products Are Covered by This Action?
USTR plans to publish a Federal Register notice that will list the products that will be charged the 10% tariff. A USTR spokesperson told the press that the list may reflect revisions based on the public comments and testimony at the June hearing.
What Is the Timing for the Tariffs?
While the President said the tariffs go into effect on September 1st, the big question is whether the tariffs will be assessed based on date of import into the U.S., or based on date of export from China. Administration officials say that this is a policy decision that will be announced by USTR.
In remarks to the press Thursday afternoon, the President said that there will not be negotiations with China to try to avoid the imposition of the additional tariffs.
What Is the Chinese Response?
Not surprisingly, Chinese officials are quoted as saying China will take “countermeasures” if the tariffs go into effect. The Chinese Foreign Minister Wang Yi spoke during a meeting of South East Asian ministers in Bangkok and said “Adding tariffs is definitely not a constructive way to resolve economic and trade frictions, it's not the correct way."
What Can Brands and Retailers Do?
Interested in more background and insights about the President’s decision?
Take a look at the remarks yesterday to the press gaggle.