President Trump announced that as of September 1, 2019, there will be 10 percent additional tariffs on everything imported from China that has not already been covered under Section 301. This has left companies brimming with unanswered questions.
Robert Stein, Vice President at Mohawk Global Trade Advisors, answers the three big questions on everyone’s mind.
Q: What is the likelihood that the 10% tariff will be applied September 1, 2019?
A: I would say the likelihood is very high. President Trump appears to feel that increasing tariffs is a winning strategy and nothing in his recent actions make me feel like he will not follow through. Also, it does not appear that the Chinese will capitulate anytime soon, so a badly needed trade agreement is not likely to materialize.
Q: Will 10% be applied across the board to all items?
A: You can review the HTS codes on list 4 in the Federal Register Notice. The 10 percent will be applied to all affected HTS codes, except for any exclusions that might be granted in the future. We don’t know if an exclusion process will be allowed, but my guess is that they will only allow exclusions if and when the duty rate moves from 10 to 25 percent.
Q: Will it be applied by entry date? Or all entry’s after a certain date? Or will the government use a ship date?
A: This is the big unknown right now. We are going on the assumption that this will be based on entry date, since it appears the impact of this move was designed to hit goods already on the water. However, there has not been any indication from the Office of the U.S. Trade Representative (USTR) regarding how they will want this to be handled.
If you have further questions, don’t hesitate to contact Mohawk Global Trade Advisors.