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Alerts and Updates

U.S. Trade Rep Proposes Hike of China Import Duties to 30 Percent

September 4, 2019

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The USTR has concluded that the actions taken to date have not been effective.

In a notice published September 3, 2019, in Federal Register Vol. 84, No. 170, the U.S. Trade Representative (USTR) proposed to increase duties on products of China from 25 percent additional duties ad valorem to 30 percent ad valorem, effective October 1, 2019.

The products that are subject to the proposed action are subject to tariff actions first taken in June, August and September 2018, with an aggregate annual trade value reported to be $250 billion.

The products in question are listed in the Annexes to the September 3, 2019, Federal Register notice.

According to the notice, written comments are due by September 20, 2019, and as noted above, the increase in additional duties would be effective on October 1, 2019. Comments are to be submitted via the Federal Rulemaking Portal, Docket number USTR-2019-0015.

By way of background, during the ongoing trade dispute between the United States and China through early May 2019, the USTR determined to take actions against certain products of China imported into the United States by the imposition of an additional 25 percent ad valorem additional duties. U.S. importers of record are primarily responsible for the payment of such duties.

In certain cases, importers of record may be required to increase the level of their import surety bonds in order to satisfy U.S. Customs obligations by reason of duty exposure and to protect the revenue of the U.S. from default.

The 25 percent additional duties in question were imposed in three stages: Tranche 1 through Tranche 3; also referred to as List 1 through List 3. The three lists covered 5,733 tariff subheadings under the Harmonized Tariff Schedule (HTSUS).

Although interested U.S. parties were granted opportunities to file for exclusions on products subject to additional duties, the review process is ongoing. (The deadline for filing requests for exclusion covering List 3 products closes on September 30, 2019.)

The U.S. and China have had on and off consultations in the hope of resolving the trade disputes, which focus upon the practices and policies of China toward “forced” technology transfers, intellectual property abuses and other abusive polices―all issues that serve as the basis of the United States action under Section 301 of the Trade Act of 1974. Meanwhile, the USTR has concluded that the actions taken to date have not been effective in obtaining the elimination of the “unfair acts, policies, and practices covered in the investigation.” Accordingly, the USTR has concluded that the current 25 percent ad valorem additional duty “may no longer be appropriate” and that an increase to 30 percent ad valorem additional duties is warranted.

Please refer to prior Duane Morris Alerts for additional details regarding the ongoing trade dispute.

For More Information

If you have any questions about this Alert, please contact Brian S. Goldstein, any member of the International Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.