On August 27, 2019, the Office of the US Trade Representative (USTR) filed a notice for public inspection at the Federal Register office that would modify the notice published in the Federal Register on August 20, 2019 to increase the rate of additional duties on certain goods of Chinese origin with an annual aggregate trade value of approximately $300 billion from 10% to 15% ad valorem. The new notice is scheduled to be published in the August 30, 2019 Federal Register. For products covered by Annex A of the August 20, 2019 notice (84 Fed. Reg. 43304), the rate of additional duty will be 15 percent on the current effective date of September 1, 2019. For products covered by Annex C of the August 20 notice, the rate of additional duty will be 15 percent on the current effective date of December 15, 2019.
According to the notice the increase in additional duties is being taken at this time because:
The burden or restriction on United States commerce of the acts, policies, and practices that are the subject of the Section 301 action continues to increase. China’s unfair acts, policies, and practices include not just its technology transfer and IP polices referenced in the notice of initiation in the investigation, but also China’s subsequent defensive actions taken to maintain those unfair acts, policies, and practices as determined in that investigation. China has determined to impose tariffs on a substantial majority of U.S. goods exported to China, with the goal of pressuring the United States to cease its efforts to obtain the elimination of China’s unfair policies. China has further taken or threatened to take additional countermeasures, including non-tariff measures, against commerce of the United States. For example, China has taken concrete steps to devalue its currency. See https://home.treasury.gov/news/press-releases/sm751 . Most recently, shortly following the August 2019 announcement of the $300 billion action, China responded by announcing further tariffs on U.S. goods, starting September 1, 2019. In short, instead of addressing the underlying problems, China has increased tariffs and adopted or threatened additional retaliation to further protect the unreasonable acts, policies, and practices identified in the investigation, resulting in increased harm to the U.S. economy.
Interestingly, the latest notice does not address the increased rate for the first three lists (tranches) that the President indicated would go from 25% to 30% on Oct. 1.
The promised exclusion process for fourth list is also not covered by the latest notice.
