In the escalating trade tensions with China, the U.S. Trade Representative (“USTR”) issued this week a new list of products from China that would potentially be subject to a 10% additional tariff. The public comment process is outlined below.

Background

These proposed additional tariffs would be in addition to the 25% tariffs on certain products from China that went into effect on July 6, 2018. They would also be imposed in addition to the 25% tariffs which the USTR is considering imposing on products that are currently subject to public comment. (See our prior briefings here and here.) China responded to the imposition of the 25% tariffs by imposing increased duties on U.S. goods. In reaction to China’s response, the President ordered the USTR to begin the process of imposing tariffs of 10% on an additional $200 billion of Chinese imports.1 The list of tariff lines upon which the USTR is considering imposing these additional duties can be found.

As with the previous proposed tariff lists, there will be a public notice and comment period to give interested individuals and organizations a chance to comment on the proposed action. In a draft Federal Register notice that has not yet been published, the USTR laid out the following comment deadlines:

  • July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
  • August 17, 2018: Due date for submission of written comments.
  • August 20-23, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 beginning at 9:30 a.m.
  • August 30, 2018: Due date for submission of post-hearing rebuttal comments.

In the Federal Register notice, the USTR stated that comments could address any aspect of the proposed supplemental action, including, but not limited to:

  • The specific tariff subheadings to be subject to increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added.
  • The level of the increase, if any, in the rate of duty.
  • The appropriate aggregate level of trade to be covered by additional duties.

The USTR also requested that commenters address specifically whether imposing increased duties on a particular class of products would be practicable or effective to obtain the elimination of China’s acts, policies, and practices discussed in the Section 301 report, and whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-sized businesses and consumers.2

Considerations for Supply Chains

Companies affected by these measures have multiple angles to consider. For one, as outlined above, companies should consider directly responding to proposed tariffs through the public comment process. Additionally, there are exemption request processes once tariffs have been imposed (for the 25% tariffs already imposed on July 6, that deadline is October 9, as discussed in our prior briefing). But for many companies, this may also be a time to revisit your current import classifications. Even if goods are accurately classified, there may be special classifications for specific situations that would reduce tariff duties. Furthermore, many companies are and will be taking a close look at the structure of their supply chains to determine if there are opportunities to mitigate import costs.