Late yesterday, the President and the United States Trade Representative (USTR) announced that approximately $200 billion of Chinese imports would be subject to a new 10 percent tariff, effective September 24, 2018. The tariff will increase to 25 percent on January 1, 2019. As requested by AAPA and ports with post-Panamax gantry cranes on order, the USTR removed product code 8426.19, so these cranes would not be subject to the new tariff. In recent testimony before the USTR, AAPA argued that these cranes have no U.S. manufacturer, and the tariff would have a negative impact on port investments in infrastructure. Overall, the USTR removed 297 tariff lines from the original proposed list, leaving 5,745 product codes on the list. AAPA’s testimony also asked USTR to exempt product lines 8426.30 and 8426.91 that generally could cover some port equipment. Ports with specific concerns should request exclusion for a particular product once USTR concludes the product exclusion process.
AAPA still has concerns regarding the overall impact of the Chinese tariffs on U.S. ports as well as the retaliatory actions by China. AAPA’s testimony noted that all the announced tariffs and retaliatory actions would impact 8.4 percent (by value) of trade through America’s ports, and would have an even greater impact on West Coast ports.
Today, China announced it would retaliate on $60 billion worth of U.S. products, but at a lower rate than it originally proposed, in response to the United States imposing a lower 10 percent tariff to start. China’s latest tariff goes into effect on September 24. President Trump is expected to begin the process of placing tariffs on an additional $267 billion worth of Chinese imports in response to China’s most recent retaliatory action.
To voice concern with the U.S. and Chinese tariffs, AAPA also joined the recently established Americans for Free Trade coalition, which is a wide range of business groups who are leading a campaign against the trade war and oppose the new tariffs. AAPA encourages its members to join the coalition.
Ports ordering Chinese equipment are encouraged to closely review the list of products with their customs brokers to determine if they will be covered by the new tariff. The $34 billion in early tariffs did include HTS codes 8426.41, 8426.49 and 8426.99, which could potentially impact port equipment purchases. Ports have until October 8 to request a specific product exclusion, and AAPA can help find a trade attorney for any port that decides to file for an exclusion.