Office of the US Trade Representative (USTR) this evening announced its intention to apply new tariffs on all remaining China-origin imports, totaling approximately USD 325 billion per year, under Section 301 of the Trade Act of 1974.
The announcement follows the United States' increase of tariffs on Chinese imports worth approximately USD 200 billion (from 10 percent to 25 percent) today at 12:01 a.m. and the subsequent inconclusive negotiations between US and Chinese officials. (Please refer to the White & Case US Trade Alerts dated May 8 and May 10, 2019 for details on the "List 3" tariff increase.) The USTR announcement would, if implemented, result in US Section 301 tariffs on the fourth and final tranche of Chinese imports.
At this stage, there is little additional information about the "List 4" tariffs. In a statement posted to the USTR website, US Trade Representative Robert Lighthizer said that President Trump had formally "ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion. The process for public notice and comment will be published shortly in the Federal Register. The details will be on the USTR website on Monday as we begin the process prior to a final decision on these tariffs." This follows President Trump's Twitter post on May 9, indicating his intention to "place additional Tariffs at 25% on the remaining 325 Billion Dollars."
If the List 4 process mirrors that of previous Section 301 tariff lists:
- The forthcoming Federal Register notice would propose the imposition of a 25 percent ad valorem tariff on certain products of China with a combined annual import value of approximately USD 325 billion, pursuant to Section 301.
- The Federal Register notice would also invite comments from interested persons, schedule a public hearing regarding the proposed supplemental action to be taken in the investigation, and accept post-hearing rebuttal comments. Comments would be asked to address (i) the specific tariff subheadings to be subject to increased duties, including whether the subheadings at issue should be retained or removed, or whether subheadings not currently on the proposed list should be added; (ii) the level of increase in the rate of duty; and (iii) the appropriate aggregate level of trade to be covered by additional duties.
- The entire process, from publication of the notice to the implementation of tariffs, would take approximately 45 to 60 days.
This additional action, if implemented, would represent the latest escalation of the ongoing US-China trade dispute. The Chinese government has indicated that it will retaliate against the latest US tariffs, although the details of such a responsive action are not yet known. However, the time between the USTR announcement regarding List 4 and the eventual imposition of tariffs on these goods does offer a window for continued negotiations.
USTR Lighthizer's statement is available here.