Additional Tariffs Under Section 301 For China


In response to China’s unfair trade practices related to the forced transfer of U.S. technology, intellectual property and innovation, the United States government has imposed an additional 25% duty on certain goods made in China that are valued at approximately $34 billion in annual import value and classified in 816 Harmonized Tariff Schedule numbers (Additional Tariffs Effective July 6_2018) effective July 6, 2018.  Section 301 of the U.S. Trade Act of 1974 (19 U.S.C. 2411) authorizes the United States Representative, subject to the specific direction of the President to take all appropriate actions including retaliation to address the acts, policies and practices of a foreign government that are unjustified, unreasonable or discriminatory and that burden or restrict U.S. commerce.    An additional 294 tariff classifications (Proposed Tariffs) representing about $16 billion annually have been proposed for sanctions as well, and are in the evaluation process including a public comment period.

If a product is normally subject to a 20% ad-valorem rate of duty, once the new sanctions are in place, the same product would be subject to a 45% ad-valorem rate of duty.  These new tariffs are in addition to the 25% additional tariffs previously imposed on certain steel products and 10% additional tariffs on certain aluminum products from China.  Therefore, the total additional duties on these certain Chinese steel products would be 50% and 35% on aluminum products.

The sectors targeted for these tariffs mainly include industries such as aerospace, automobile, information and communication technology, robotics and industrial machinery.

Be aware that continuous Customs bonds may be rendered insufficient by U.S. Customs because of the significant additional duties that will be imposed on affected products and classifications.   If this is the case, you would receive bond termination notices from Customs.  The bond termination request must be timely filed with Customs and the new bond must be made effective immediately after the cancellation of the old bond in order to avoid any lapse in coverage.