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IndustryNet Blog

USTR finalizes tariffs on half of all Chinese imports

Posted by IndustryNet on Tuesday, September 18, 2018

100000274_shippingchuttersnap_255215_unsplashFurthering its mission to address unfair Chinese industrial policies, the USTR announced late Monday that it has finalized tariffs on $200 billion of Chinese imports to the U.S. and has threatened tariffs on an additional $267 billion of Chinese goods in the event China’s Ministry of Commerce retaliates with its own set of duties.

The finalized list represents roughly 50% of all Chinese goods imported to the U.S.

According to the USTR’s recent announcement, an initial 10% import tariff will now be officially imposed on the list of 5,745 Chinese products starting September 24th, with the tariffs raised to 25% starting January 1st, 2019.

The proposed tariffs were announced on July 10th, 2018, and originally included a list of 6,031 products. That list has since been revised, with 297 products removed based on responses received during a 6-week review and 6-day public hearing. The full range of items removed from the final list can be found here.

Not surprisingly, China responded today with an announcement of its intent to retaliate with its own list of import tariffs on $60 billion worth of U.S. goods at rates between 5-10%

The Trump administration continues to take a hard line with China. U.S. Trade Representative Robert Lighthizer said in a statement released July 10th: “As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies.”

Monday’s announcement follows an initial set of import tariffs released in June 2018 on $34 billion worth of Chinese goods the U.S. enacted just last month, which prompted China’s Ministry of Commerce to fire back with its own set of tariffs on $34 billion of U.S. goods. These consist mostly of agricultural products, but also includes items such as oil & gas drilling pipes and scrap aluminum.

Timeline of U.S./China trade tensions

The deepening trade conflict between the U.S. and China have been brewing for more than a year. In August of 2017, the USTR underwent an “exhaustive” investigation of Chinese industrial policy under Section 301 of the U.S. Trade Act of 1974.

The agency’s eight-month study, concluded that China’s trade policies are “unreasonable or discriminatory and burden or restrict U.S. commerce.” Tariff measures were taken shortly thereafter. A number of specific findings on Chinese industrial policy were published on the USTA’s website on September 2018:Aluminum_Plant_001

• China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.

• China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.

• China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.

• China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.

Challenges for manufacturers

In an era of expanding manufacturing activity, trade uncertainty remains a top concern for manufacturers. The ISM’s September report on U.S. manufacturing activity revealed the nation’s industrial activity has hit a 14-year high. But when it comes to the future, trade tensions continue to dominate manufacturing executives’ concerns.

Although domestic suppliers of tariffed goods stand to benefit, manufacturers that rely on imports are concerned about supply disruptions and price hikes. According to IndustrySelect’s database of 400,000 U.S. manufacturers, roughly 43,000 manufacturers in the U.S. rely on imports for the production of goods.

Many companies have applied for exemptions to the tariffs. Information on applying for an exemption can be found here. Others have turned to industrial marketplaces like IndustryNet to locate domestic suppliers of materials and goods.

List of products affected by tariffs

metal fabrication_metal rollsThe number of Chinese products subject to the 10% tariffs is seven times larger than the list published by the USTR in June.

Altogether, the list of tariffs encompasses a large range of Chinese imports, and now affects both domestic manufacturers and consumers, such as raw materials, industrial chemicals, tools and electronics.

That full list can be found here.

Finding domestic suppliers

IndustryNet maintains up-to-date information on over 400,000 U.S. manufacturers and suppliers of more than 10,000 products and services. IndustryNet lists suppliers across a range of industries, producing everything from steel and aluminum to air compressors, conveyor belts and printed circuit boards.

Visitors can set up a free user account, build custom lists of potential suppliers, send quote requests, download catalogs, view company photo and video libraries, and more.

IndustryNet is also a direct path for U.S manufacturers to increase their visibility among domestic industrial procurers.






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