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Additional Tariffs on Some US$300 Billion Worth of Mainland Chinese Products Under Consideration

The Office of the U.S. Trade Representative on 13 May issued a notice that formally proposes to establish an additional duty of up to 25 percent under Section 301 of the Trade Act of 1974 on nearly all remaining imports from mainland China, which are valued at approximately US$300 billion. The tariff hike could be implemented any time after 24 June in any amount up to 25 percent, on top of the regular rate of duty.

As expected, the proposed list of 3,805 full and partial tariff subheadings (available here) includes key consumer items like apparel, footwear, home textiles, and toys and games, as well as a range of machinery and electrical and electronic articles of HS Chapters 84 and 85 and various other products of potential interest to exporters in Hong Kong and mainland China. The USTR notice indicates that the proposed list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials and critical minerals. Moreover, product exclusions granted by USTR on prior tranches will not be affected.

Parties wishing to submit input on the proposed action must do so by 17 June. USTR will hold a public hearing on 17 June, with requests to appear at the hearing and a summary of expected testimony due by 10 June. Post-hearing rebuttal comments are due within seven days after the last day of the public hearing.

Public input may address any aspect of the proposed action, including (i) the specific tariff subheadings to be subject to increased duties, including whether the subheadings listed should be retained or removed, or whether subheadings not currently on the list should be added; (ii) the level of the increase, if any, in the rate of duty; and (iii) the appropriate aggregate level of trade to be covered by additional duties. In commenting on the inclusion or removal of particular tariff subheadings, USTR requests that commenters address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of mainland China’s acts, policies and practices related to technology transfer, intellectual property and innovation, and whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including consumers and small- or medium-sized businesses.

Meanwhile, mainland China has announced that it will increase retaliatory tariffs on US$60 billion worth of U.S. goods as of 1 June after the Trump administration raised additional tariffs on US$200 billion worth of mainland Chinese goods on 10 May. Beijing has also announced that it will accept requests for exclusions from its tariffs.

Effective 1 June, mainland China will raise the tariffs already in place on four separate lists of products imported from the United States, as follows.

  • for 595 tariff lines, the tariff rate will remain 5 percent
  • for 974 tariff lines, the tariff rate will increase from 5 percent to 10 percent
  • for 1,078 tariff lines, the tariff rate will increase from 10 percent to 20 percent
  • for 2,493 tariff lines, the tariff rate will increase from 10 percent to 25 percent

In addition, mainland China has announced a pilot programme that will allow companies who import, manufacture or use products subject to retaliatory tariffs on U.S. goods to request an exclusion for those products. There are specific timeframes within which requests must be submitted depending on which retaliation list they are on.

Each request will be limited to one product at the eight-digit tariff level and will be evaluated based on difficulty obtaining the product from sources other than the United States, material injury from the tariff to the requestor, and any structural impact of the tariff on relevant industries. Any exclusions granted will remain in effect for one year.

Content provided by Picture: HKTDC Research
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