On Wednesday evening, the U.S. President announced through Twitter that the US will push back the effective date of the proposed tariff increase on $250 billion worth of Chinese good from the scheduled date of October 1 to October 15, "as a gesture of goodwill."
The tweets came after the Chinese government's announcement that it would be exempting certain US products from tariffs on this Wednesday. The new round of trade escalation since the end of this August finally cooled down, with face-to-face discussions coming up in Washington as early as next week. The Trump administration doubled down on this show of goodwill by suggesting that they may be open to a short-term, interim solution while the parties continue to talk in good faith. The interim solution may mean that the additional tariffs to go in effect in October and December could be delayed in exchange for concessions by Beijing over agricultural products and technology matters.
The current tentative two-week delay of the tariff increases will apply to the first three tranches of Section 301 tariffs, i.e., the additional tariffs imposed on the Chinese imports in the first three lists remain 25% until October 15, 2019, subject to further notices from the USTR. The tariff exclusion procedures for the first two tranches were closed last year while an interested party can still file an exclusion for the third tranche products until September 30, 2019.
For the fourth tranche of Section 301 tariffs, products on List 4A are subject to an additional tariffs of 15% effective on September 1, 2019; meanwhile, the same rate of additional tariffs will be imposed on products on List 4B starting from December 15, 2019, unless an interim truce is reached. The exclusion procedure for Tranche 4 has not been published yet.
As the trade talks between the US and China are expected to resume in the coming weeks, we will continue to follow tariff and trade actions of both countries, and report back with latest news.
Dickinson Wright Law Firm
Contact: Mark Heusel: Member & China Practice Group Chair
About Mark: Mark Heusel is an experienced commercial business attorney and serves as the Chair of the Firm’s China Practice Group. He has more than 25 years of experience in representing multi-national companies in the manufacturing, retail and automotive industries. Mr. Heusel’s experience includes advising foreign companies in the areas of foreign direct investment in the United States, business formation, Greenfield investment, international trade, commercial transactional matters, and dispute resolution. In his role as International Practice Group Chair, he serves as general counsel to companies throughout Asia and Europe, directing the firm’s resources to better assist his clients.
Mr. Heusel began his legal career by representing clients in a variety of litigation matters in state and federal courts and in various domestic and international arbitral forums. With more than 20 years of litigation experience, particularly in the areas of contract disputes, supply chain litigation, employment matters (including discrimination and wrongful discharge litigation), commission disputes, personal injury, and real estate and land use litigation, he gained invaluable first-chair experience in understanding and recognizing how a company’s success may be impacted by business disputes. Leveraging this experience, Mr. Heusel focused his career on assisting foreign companies entering the North American market. His interests and passion for helping companies in a proactive manner led to his current position as International Practice Group Chair, where he now has the opportunity to advise and counsel clients entering or expanding their businesses in North America.