The Office of the U.S. Trade Representative on Tuesday evening finalized a second tranche of 25 percent tariffs to be imposed on China following Section 301 of the Trade Act of 1974, deleting intermodal shipping containers and four other tariff lines from an initial list of 284 tariff subheadings spanning $16 billion in 2017 import value.
China responded in kind Wednesday morning, releasing a list of U.S. goods it would impose 25 percent retaliatory tariffs on, commensurate with the United States’ $16 billion worth of tariffs.
Both countries will activate the tariffs on Aug. 23. In the United States’ case, collections by U.S. Customs and Border Protection on the $16 billion will start on that date, according to USTR.
USTR deleted intermodal shipping containers (HTS 8609.00.00); certain machines to split, slice or pair wood, work, bone, plastics and similar hard materials (HTS 8465.10.00); alginic acid (HTS 3913.10.00); microtomes (HTS 9027.90.20); and floating docks (HTS 8905.90.10), according to a USTR official.
USTR on July 6 activated a first round of tariffs on China covering 818 tariff lines and $34 billion worth of 2017 import value, pursuant to USTR’s Section 301 investigation completed in March. China implemented commensurate retaliatory tariffs the same day.
“USTR and the Section 301 Committee carefully reviewed the public comments and the testimony at the two-day public hearing” held by the interagency Section 301 Committee July 24-25 at the International Trade Commission, the USTR official said. “Based on this review process, USTR revised the proposed initial list of 284 product lines to 279 product lines to remove products on which tariffs could cause severe economic harm.”
Featured on the $16 billion list are multiple tariff subheadings applying to polyethylene; polyisobutylene; polystyrene; polyvinyl chloride; fluoropolymers; acrylic polymers; resins; polyurethanes; certain cellulose products, certain tubes, pipes and hoses; nonadhesive plates, sheets, film, foil and strip; iron and steel construction products; engines used in lawn equipment; tractors; manufacturing machines; voltage-current regulators; diodes; electronic integrated circuits; and railway or freight cars, among other things.
The Trump administration has said it is imposing the Section 301 tariffs on China to pressure the country to change its unfair commercial practices against U.S. firms, including cited theft of intellectual property.
The Section 301 Committee will hold another hearing at the ITC in Washington, D.C., Aug. 20-23 to consider a third round of tariffs on China covering $200 billion worth of products in 2017 import value.
USTR said a formal notice of the $16 billion tariff action will be shortly published in the Federal Register, and will announce a process by which interested parties may request the exclusion of particular products covered by a tariff line subject to additional duties.
Groups including the National Retail Federation (NRF) and National Association of Manufacturers (NAM) decried the tariffs, with senior officials of both associations saying the measures are a risky attempt to create leverage in negotiations with China.
“This is just another step toward throwing away the benefits of tax reform that have given our nation’s economy a badly needed boost," NRF CEO Matthew Shay said in a statement. "These tariffs might be part of an effort to bring about fair trade with China, but as we’ve said before all we have seen so far is a huge risk for American consumers and workers with no endgame in sight. It’s time to stop digging a deeper hole while we can still climb out.”
NAM CEO Jay Timmons said in a statement that while "China cheats," another round of tariffs "will not fix the problem," noting that manufacturers have already seen price increases and that additional retaliatory tariffs could close major markets off to U.S. exports.