U.S. Trade Dispute with China - August 2018 Update

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Nexsen Pruet is carefully monitoring the recent actions of the United States and its trading partners regarding trade and tariffs. David S. Robinson, Special Counsel and International Business attorney, elaborates on some of the most recent developments.

Recent U.S. Trade Actions

With respect to China, in addition to earlier announced tariffs on steel and aluminum products, the United States Trade Representative (U.S.T.R.) imposed an additional duty of 25% on 818 product lines of China, beginning on July 6, 2018; and on an additional 279 products that will go into effect on August 23, 2018 (the “25% Round”). The U.S.T.R. is currently allowing U.S. stakeholders to petition for the removal of particular products from the first list of 818 products, and our firm is assisting several clients with these petitions. 

On July 10, 2018, the U.S.T.R. proposed the imposition of an additional 10% tariff on an additional $200 Billion in Chinese imports (the “10% Round”); thereafter, on August 1, 2018, the U.S.T.R. proposed to increase that 10% tariff to 25%. The public written comment period for the 10% Round (including comments regarding the proposed tariff rate increase) has opened and comments will be accepted through September 6, 2018. 

In response to the above actions, China has retaliated with tariffs currently in force on approximately $34 Billion in U.S. exports, and with tariffs on an additional $16 Billion in U.S. exports that will go into effect on August 23, 2018.

25% Round: Products Subject to Additional 25% Duty on July 6, 2018:

Annex A to the Notice lists 818 of the original 1,333 product lines that were included on the proposed April 6 list. The U.S.T.R. notice imposes an additional duty of 25% on these 818 product lines; U.S. Customs and Border Protection began collecting the additional duties on July 6, 2018.

Annex A can be accessed here (pages 11-16).

25% Round: Additional Products Subject to Additional 25% Duty on August 23, 2018:

The 279 additional product lines identified as benefiting from Chinese industrial policies was announced on August 7, 2018, after a second round of public comments.    

These additional product lines are identified here.

10% Round: Proposed List

The proposed 10% (or perhaps 25%) additional ad valorem duty on products with an annual trade value of approximately $200 Billion is detailed by the U.S. Trade Representative here. This determination was predicated upon certain Chinese retaliatory actions and supported by a detailed 200 page report on Chinese business and trade practices.

The comment period dates and the list of proposed product codes can be accessed here.

Aid To American Farmers

In response to tariffs imposed on U.S. agricultural exports by China and other nations (and alleged Chinese manipulation of the international soybean market), the Administration has authorized the U.S. Department of Agriculture to authorize up to $12 Billion in aid to the American agricultural heartland under The Commodity Credit Corporation Charter Act. Programs include:

• Marketing Facilitation Program: Will provide assistance to soybean, sorghum, corn, wheat, cotton, dairy, and hog producers.
• Food Purchase and Distribution Program: Will authorize the purchase of surplus affected commodities such as fruits, nuts, rice, legumes, beef, pork and milk for distribution to food banks and other nutrition programs.
• Market Promotion Program: Will develop new export markets in conjunction with the private sector on behalf of agricultural producers.
  
  

We continue to follow these developments closely.

About David S. Robinson
Few attorneys understand the opportunities and dynamics of global trade better than Nexsen Pruet's David Robinson, Special Counsel and International Business attorney. Based in Raleigh, North Carolina, he assists clients in cross-border transactions around the world. He helps global businesses integrate corporate compliance and operational programs into subsidiary operations, facilitate the transfer of personnel among operations, comply with export control and boycott regulations and negotiate commercial and joint venture relationships.

Nexsen Pruet is one of the largest law firms in the Carolinas, with more than 190 attorneys and offices in Columbia, Charleston, Greenville, Hilton Head and Myrtle Beach, South Carolina, as well as Charlotte, Greensboro and Raleigh, North Carolina. Founded in 1945, Nexsen Pruet provides a broad range of legal services to the business community and represents companies and other entities in local, state, national and international venues.