Following a dinner meeting between the two leaders at the G-20 summit in early December, President Donald Trump announced that he and Chinese President Xi Jinping agreed to begin and complete negotiations on certain trade issues between the countries within 90 days. As part of that process, Trump agreed to postpone for 90 days in the ongoing Section 301 trade action involving China the import tariff increase on the third tranche of Chinese products from 10 percent to 25 percent scheduled for January 1, 2019 (see Trump and Trade Update of December 3, 2018).
The announcement immediately triggered questions regarding when the 90-day postponement would begin – from the day of the president’s announcement or from the original January 1, 2019 deadline. Last Friday, the Office of the U.S. Trade Representative (USTR) confirmed in a Notice of Modification of Action that the 90-day period will end March 1, 2019. It announced that the rate of additional duties on the third tranche of Chinese products will increase to 25 percent as of March 2, 2019 at 12:01 a.m. (EST) if China and the United States do not successfully negotiate an outcome to address the unfair trade acts, policies and practices covered in the Section 301 investigation. In brief remarks to the press, USTR Robert Lighthizer stated that this was a “hard deadline.”