Trade Compliance

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Trump Changes Course on China Tariffs; Exempts Some, Delays Others to Soften Blow to Consumers

Posted August 13, 2019


The Trump administration today announced it has decided to narrow the list of Chinese products that are slated to be hit with new tariffs at the start of next month. As a result, the imposition of tariffs will be delayed on a wide range of consumer goods such as cellphones, laptops, toys, etc., until stores have sufficient inventory for the back-to-school and holiday shopping seasons.



The move, which pushes back the 10% tariff on some products until December 15 and exempts other goods altogether, comes as a result of mounting pressure from the trade community, as business and consumer groups continue warning about the harm being caused by the ongoing trade conflict with China.

Another consideration thought to be weighing on the decision, are fears on the part of administration officials that higher consumer prices and increased costs for manufacturing inputs resulting from the tariffs could drive up inflation, thereby putting pressure on the Federal Reserve to raise interest rates, something the president has been adamant about preventing.

A bulletin issued this morning by the Office of the United States Representative states that certain products have removed from the China Tariff List altogether for what the administration says are “health, safety, national security and other factors.”

Additionally, the notice indicates those products on which, following the USTR’s public comment and hearing process, it was determined that the tariff should be delayed to December 15. Products in this group (Tariff List 4B) include, for example, cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing.

For goods unaffected by these changes still remaining on China Tariff List 4A, the additional 10% surtax will go ahead as planned, effective on the first day of September.

The USTR also indicates that it intends to conduct an exclusion process for those products subject to the additional tariff, although specifics were not provided.

“I think it’s good news that the administration has delayed the decision to move forward with raising tariffs,” said Myron Brilliant, the head of international affairs at the U.S. Chamber of Commerce. “It gives both sides more breathing room…as they look to get back on track.”

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Should you have any questions or concerns about how these changes might impact your company or if you require assistance navigating the exclusion process, don’t hesitate to contact us – our trade experts are here to help.

 

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