Clarity Today on Tariff Actions

This past week was riddled with updates regarding tariffs on Chinese goods. Today, we present the current status, explanations and sources of information for readers who need to definitively understand what, if any tariffs they are paying and when those are effective.

-Section 301 Tariffs are enacted from today, May 10

-Tariff increases from 10% to 25% apply, but not to goods arriving today

-The current tariff action allows room for the White House and Office of Trade to remove the increases before they will have an impact on actual duties paid

Earlier this week, The US Office of The Trade Representative confirmed 25% tariffs effective today, May 10th. In official releases posted on their site (https://www.federalregister.gov/documents/2019/05/09/2019-09681/notice-of-modification-of-section-301-action-chinas-acts-policies-and-practices-related-to), as well as slated releases on the Federal Register, they adopted the addition of 15% tariffs on Section 301 products from China.

Shortly after the above action, verbiage from the WH was brought into question and triggered additional correspondence. The result was an update released yesterday outlining a change to the internal process that would be enacted for the increases (https://csms.cbp.gov/csms.asp?srch_argv=19-000236&srchtype=all&opt=1).

Generally in the past, tariff increase dates of action have impacted payable Duty based on the “Arrival” date of the cargo. Per the US CBP official guidelines, the Arrival date is the first date that goods are available for US Commerce. In other words, when the cargo is discharged from the vessel and available on US Soil. To the benefit of importers, the action on May 9 revised the common practice above and outlined that modifications to the action will not have an immediate affect for May 10th.

The new process currently in place on the increase is that the rate of 25% will apply to seaborne cargoes SHIPPED from China beginning May 10. This means all the products arriving today and in the next few weeks will actually not fall subject to the tariff, as long as they are arriving by June 1. This process is completely different from the prior three increase implementations.

In short, the revised process for applying the duty rates just created a grace period (until June 1) for the US and China to continue discussions and ideally reach an agreement. So, here’s to high hopes that recent escalations will cool down and that the current standing order for increases on tariffs will be suspended in the wake of positive results at the negotiating table.