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Trump Says Tariffs Will Remain in Place After Deal with Mainland China as USTR Announces More Section 301 Product Exclusions

President Trump indicated on 20 March that higher tariffs on US$250 billion worth of goods imported from mainland China will remain in place for the foreseeable future. The president’s stance could complicate efforts to secure a bi-lateral trade agreement.

Senior U.S. officials will travel to Beijing during the week of 25 March to continue negotiations on an agreement aimed at resolving issues such as forced technology transfer, intellectual property rights, currency and agriculture. Mainland Chinese officials could follow up with a visit to Washington in early April and presidents Trump and Xi Jinping could meet in late April to conclude a deal.

According to press sources, one of the key issues negotiators have struggled with in recent weeks has been enforcement; i.e., measures the United States could take if mainland China does not comply with the commitments it makes in any final agreement. Trump administration officials have indicated a preference for re-imposing tariffs in such a case, with no retaliatory tariffs allowed by mainland China.

However, Trump said on 20 March that “we’re not talking about removing” the existing tariffs but instead are talking about “leaving them for a substantial period of time … to make sure that … China lives by the deal.” A Washington Post article notes that this approach is not new for Trump, as he has maintained tariffs on steel and aluminium imports from Canada and Mexico even after reaching agreement with them on revisions to the North American Free Trade Agreement.

In related news, the Office of the U.S. Trade Representative has announced the second batch of products to be excluded from the additional 25 percent duty imposed on some US$34 billion worth of imports from mainland China (List 1 goods). These exclusions will be retroactive to 6 July 2018 and remain in place for one year after the date of publication of the exclusion determination in the Federal Register, which is expected soon. USTR notes that it will continue to issue decisions on pending exclusion requests on a periodic basis. The following products are covered by the most recent exclusions.

  • three existing 10-digit HTSUS subheadings: 8412.21.0045, 8430.31.0040 and 8607.21.1000
  • 30 specially prepared product descriptions covering such items as submersible pumps; breast pumps; impellers and impeller housings; salad spinners; water filters for pools, aquariums, etc.; water purifiers; steel bucket elevators; rubber tracks used on construction equipment; automated data processing storage units; self-propelled pavers; check valves; electric motors; electrical transformers; soldering irons; liquid crystal display modules; and musical tuners

These exclusions must be claimed using new HTSUS subheading 9903.88.06. They are available for any product that meets the specific product description, regardless of whether the importer filed an exclusion request. USTR notes that the scope of each exclusion is governed by the scope of the 10-digit headings and the specific product descriptions and not by the product descriptions set out in any particular request for exclusion.

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