Fashion Intel & Analysis

Through a series of tweets this morning, President Trump attacked China as negotiations are underway this week in Shanghai.  Trump criticizes China for not buying more agriculture products as they promised to do and accuses them of stalling negotiations until the 2020 election.  The tweets may reflect the President's desire to increase the pressure on China.  Several news outlets, including the Wall Street Journal and the South China Morning Post, have recently reported that China has been buying soybeans, and Reuters says that is confirmed by new U.S. government data released yesterday.

The Office of the U.S. Trade Representative has announced the first list of product exclusions for the $16 billion in Chinese products subject to 25% tariffs (List 2). The product exclusions will be retroactive to August 23, 2018 and will extend 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 product exclusion list is available here.  

While this announcement is a good sign that the Administration is approving product exclusion requests, it also highlights the fact that it takes a long time for companies to get that tariff relief.   These tariffs went into effect almost one year ago, on August 23, 2018.   For companies interested in filing product exclusions for items on List 3, such as luggage, handbags, headwear and leather apparel, USFIA will be offering a webinar during August to provide additional insights. 

The U.S. and Guatemala have reached an agreement on asylum after Trump threatened a travel ban, tariffs, and remittance fees earlier this week. “The United States and Guatemala have reached an agreement on asylum. The agreement was just signed in the Oval Office,” the official White House twitter feed reported this afternoon. Details on the agreement are not yet available.  

President Trump issued a memorandum today instructing USTR to take action to stop developing countries at the World Trade Organization from self-designating themselves as countries eligible for “special and differential treatment. “

“When the wealthiest economies claim developing-country status, they harm not only other developed economies but also economies that truly require special and differential treatment.  Such disregard for adherence to WTO rules, including the likely disregard of any future rules, cannot continue to go unchecked,” Trump said.

In addition to China, the memorandum notes Brunei, Hong Kong, Kuwait, Macao, Qatar, Singapore, the United Arab Emirates, Mexico, South Korea and Turkey as economies wrongly claiming developing status.

Trump has directed USTR to “use all available means” to change the policy at the WTO. If substantial progress has not been made after 90 days, the U.S will no longer treat as a developing country for the purposes of the WTO any WTO Member that in the USTR’s judgment is improperly declaring itself a developing country and inappropriately seeking the benefit of flexibilities in WTO rules and negotiations, and where relevant, the U.S. will not support any such country’s membership in the OECD.

Today U.S. Customs and Border Protection released the CBP Trade and Travel Report Fiscal Year 2018. CBP recaps many of the enforcement activities this past year.  They particularly focus on the big increase in duties paid. CBP collected over $40.6 billion in duties in fiscal year 2018, an increase of nearly 23 percent over the previous fiscal year. The sharp increase in duty collections is attributed to the 232 tariffs on steel and aluminum, 201 tariffs on washing machines and parts, solar panels, and of course the 301 tariffs on Chinese goods.

The money collected from the imposed tariffs continues to increase in FY19. Below is an update based on Customs and Border Protection’s Trade Statistics.

As of July 17, 2019, the U.S. has collected more than $30 billion in additional tariffs. 
•    $917 million in Section 201 tariffs on washing machines and on solar panels. 
•    $1.8 billion in Section 232 aluminum tariffs.
•    $5.9 billion in Section 232 steel tariffs. 
•    $21.3 billion in Section 301 tariffs on goods from China.