Greenspoon Marder Client Alert: Trade War Continues Between U.S. and China With More Tariffs Imposed
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By: Jessica Wasserman, Esq.
As many of you may have seen in the ongoing news among a variety of outlets including Bloomberg News, the trade war between the U.S. and China continues to ratchet up with more tariffs imposed. As one of the United States’ largest trading partners, the new tariffs will impact a broad swath of the U.S. economy including many Greenspoon Marder clients. If any of your organizations import or export goods with China, you may be impacted by the tariffs. Jessica Wasserman in the Greenspoon Marder Washington, D.C. office has longstanding experience in this area of law and would be pleased to assist any Greenspoon Marder client in navigating the new tariff landscape. Most immediately, there will be a process for companies and associations to request that their products be removed from the tariff list and so not tariffed. This is important as a tariff is a tax that is added onto the consumer price. For any price sensitive sector, such as retail, a new 25% tariff is significant.
A short while ago, the U.S. Trade Representative (USTR) released the details for Tranche 4 , making good on the promise from last Friday to impose tariffs on $300 billion of imports from China. Products covered include virtually everything you would find at a Target or Walmart store: clothes, shoes, household goods, food, TVs, watches, cameras, paper goods and more.
Those details, which will be published in a Federal Register notice later this week, propose a 25% tariff.
As with past tranches, this process envisions an opportunity for the public to comment on this proposal.
June 10: Due date for filing requests to appear at the June 17th hearing.June 17: Due date for submission of written comments.June 17: Public hearing.Seven days after the last date of the public hearing: Due date for any post-hearing rebuttal comments.
It is impossible to say when, if tariffs are proposed under this process, they would take effect.
This uncertainty is magnified by the President, who earlier today indicated he wasn’t sure if he would impose tariffs pursuant to this process (partly because talks are still on-going and partly because he is scheduled to meet with President Xi during the G-20, shortly after the scheduled hearings occur).
However, if the timelines for the first three tranches are any indication, tariffs could be imposed as early as mid-July.
BUT , please note that the hearings for Tranche 4 are taking place about a week earlier in the process than in the any of the first three tranches.
China Retaliates
Earlier today, the Chinese government announced it is retaliating for the tariff increase on Tranche 3 the Administration put in place effective last Friday.
Today’s Ministry of Finance release notes that approximately $60 billion worth of items imported from the United States on the following annexes will have a new rate effective June 1, 2019:
2493 items, whose additional tariff rate is being raised from 10% to 25%: Annex I (63 pages)
1078 items, whose additional tariff rate is being raised from 10% to 25%: Annex II (28 pages)
974 items, whose additional tariff rate is being raised from 5% to 10%: Annex III (25 pages)
595 items, whose additional tariff rate is remaining at 5%: Annex IV (16 pages)
All 4 annexes appear to mirror the ones published by the Chinese Government in September, with the exception of Annex IV, which no longer includes 67 lines of auto parts that was removed in December following the summit between Presidents’ Xi and Trump last year.
The following excel spread sheet contains data from the International Trade Center on China’s imports (from all sources) of these products, along with English language translations, of the 8 digit codes listed in the above annexes.
President Trump Comments
As noted above, President Trump told reporters that he will be meeting with President Xi on the margins of the G-20 Summit on June 28-29.
As usual, the President narrated along the day’s events on twitter (here , here , and here ).
“There is no reason for the U.S. Consumer to pay the Tariffs, which take effect on China today. This has been proven recently when only 4 points were paid by the U.S., 21 points by China because China subsidizes product to such a large degree. Also, the Tariffs can be….” “…completely avoided if you buy from a non-Tariffed Country, or you buy the product inside the USA (the best idea). That’s Zero Tariffs. Many Tariffed companies will be leaving China for Vietnam and other such countries in Asia. That’s why China wants to make a deal so badly!…” “…There will be nobody left in China to do business with. Very bad for China, very good for USA! But China has taken so advantage of the U.S. for so many years, that they are way ahead (Our Presidents did not do the job). Therefore, China should not retaliate-will only get worse!”
Greenspoon Marder’s International Trade and Government Relations practice groups are ready to assist in helping you navigate through the new tariff scheme and to determine the tariff status of your products. Please contact Partner, Jessica Wasserman at jessica.wasserman@gmlaw.com or 202-669-9449.
About Greenspoon Marder Greenspoon Marder is a national full-service business law firm with 240 attorneys and 26 locations across the United States. We are ranked amongst American Lawyer ’s Am Law 200, as one of the top law firms in the U.S. since 2015. Since our inception in 1981, our firm has been committed to providing excellent client service through our cross-disciplinary, client-team approach. Our mission is to understand the challenges that our clients face, build collaborative relationships, and craft creative solutions designed and executed with long-term strategic goals in mind. We serve Fortune 500, middle-market public and private companies, start-ups, emerging businesses, individuals and entrepreneurs nationwide.
MEDIA CONTACT michelle.martinez.reyes@gmlaw.com
