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by Sam McClure, Sales Manager,

The third round of the Section 301 tariffs for goods of Chinese origin went into effect on Sept. 24th imposing an additional tariff of 10% for covered items.  However, this is not the last word on such tariffs, as the items listed under round three face a January 1 deadline, when the tariffs will increase to 25%.  This newest round covers items across a broad spectrum of industries and will have a much larger effect on common consumer products.  Some goods from the proposed list were removed before the final was published and some items, such as furniture designed for children, were exempted from the tariffs under Part 2 of this round.   At this time there is no process for U.S. companies to request exclusions.  Members of Congress from both parties have written a letter requesting the exclusion option, so that relief can be sought in the event that there are no alternative suppliers or the importer’s ability to compete is hindered.  Click to see detailed information on the Section 301, Round (3) final list.

Also notable is the Miscellaneous Tariff Bill Act of 2018 (MTB), signed by President Trump, which temporarily eliminates or reduces import duties on some raw materials and intermediate parts.  This is good news for many U.S. manufacturers. The MTB reductions go into effect Oct 13, 2018 and will last until Dec. 31, 2020, these are imposed against the base duty rate.  It is important to note that many of the goods covered by MTB are imported from China and the Section 301 tariffs will remain in force.  The Act may be extended prior to the expiration date. Click to see detailed information on the MTB agreement. 

On a positive note for the international trade community, the U.S., Mexico and Canada have agreed to a new framework to replace NAFTA.  While there are still details to work through, the new agreement, USMCA, seems to alleviate concerns that NAFTA would simply be scrapped.  Generally speaking in terms of compliance management, importers can expect to see more activity than usual regarding tariffs, quotas and ADD/CVD filings.  There is even a threat of more Section 301 action aimed at Chinese products.  Now more than ever is the time to work with a qualified Customs Broker to be certain of classification and to explore strategies (such as tariff engineering, TIB entries and Duty Drawbacks) that protect your business in an ever changing compliance environment.

Feel free to contact Sam McClure for your compliance questions.

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