The Office of the United States Trade Representative has issued its proposal for the assessment of an additional 25% tariff on over 2000 items of Chinese origin being imported into the United States. The products covered by this list include many tech products, machinery, as well as many of the steel and aluminium subheadings covered by the Section 2132 national security tariff measures announced with effect from 23 March. The full draft Federal Register Notice from the USTR can be found here. Several key items to note are:
These are merely proposals at the moment. There is an opportunity for public comment, which are due on or before by 11 May. In addition, there will be a hearing scheduled for later in May and an
opportunity to submit post-hearing submissions on or before 22 May. Any additional tariffs ultimately imposed will be pursuant to a final order issued thereafter. Only goods of Chinese origin are subject to these additional tariffs. Origin is determined in accordance with the non-preferential rules of origin which, while not provided for specifically under US law, are referred to under General Note 3 to the Harmonised Tariff Schedule of the United States, which is itself statutory law under 19 USC 1202.
Double Hit?
In addition, we make reference to a paragraph in the USTR’s draft Federal Register notice, which states that “the proposed action is an additional duty of 25 percent . . . [f]or example, if a good of
Chinese origin is currently subject to a zero ad valorem rate of duty, the product would be subject to a 25 percent ad valorem rate of duty; if a good of Chinese origin were currently subject to a 10
percent ad valorem rate of duty, the product would be subject to a 35 percent ad valorem rate of duty; and so on. (underline and bold emphasis added).
Several items covered by this proposed tariff of 25% are also covered by the Section 232 national security tariffs imposed as of 23 March. Based upon the wording of the above highlighted
language (“currently in effect”), we expect that this means certain steel and aluminium items covered by both tariff measures—the Section 232 measures imposed as of 23 March as well as
these proposed Section 301 tariff measures—will have total additional duties imposed in the amount of 50% on certain China-origin steel imports and 35% on certain China-Origin aluminium
imports where the tariff headings are within the scope of both orders.
I would encourage interested parties to submit comments and actively participate in these proceedings. As we stated previously, protecting your rights to possible future remedies may well
depend upon your active participation to the fullest extent allowable.
Please contact me to discuss how these proposed tariffs may impact your company and whether you wish to proceed with comments or other participation.
William Marshall
william.marshall@tiangandco.com
+852 28334977 / 64696776