The U.S. Trade Representative issued a press release announcing the imposition of an 25% duty on a finalized ‘List 2’ yesterday (as you will recall, List 2 is the $16 billion worth of Chinese imports published on June 18, 2018) . The finalized list contains 279 of the 284 HTS subheadings originally proposed to be covered. The duties will be imposed on covered articles beginning on August 23, 2018. The press release states that a notice will be published in the Federal Register shortly and that notice will include details on how interested parties can file a product exclusion petition. A copy of the press release is attached here together with the finalized List 2.
The recent escalation of trade tensions (e.g., the finalization of List 2, China’s likely retaliation, President Trump increasing the List 3 duties from 10% to 25%, China announcing its intention to impose additional duties on a further $60 billion worth of U.S. imports in response, etc.), and the lack of meaningful negotiations to date, suggests that the duties (on both sides) will be around for awhile. As a result, all companies that import from China should be reviewing their sourcing options and devising short, medium and long terms pans for coping (e.g., possibility of moving certain production steps out of China in the short term, while longer term options are explored, etc.). These plans should include continuing to participate in the administrative process (e.g., filing product exclusion petitions, submitting comments/providing testimony on the impact of List 3 – and any subsequent lists, etc.), as well as Congressional outreach. We are assisting numerous clients with these efforts and would be happy to discuss the options with you further. If that would be helpful, just let us know.