After trade negotiations between China and the United States faltered last week, China announced on May 13, 2019, that it would retaliate against the United States’ increase in Section 301 tariffs on certain Chinese products from 10 percent to 25 percent (see Trump and Trade Update of May 9, 2019). China’s Ministry of Finance announced that as of June 1, 2019, it will increase the tariffs on imports of U.S. goods valued at approximately $60 billion in response to the increase in tariffs implemented by the United States. While not adding goods to its list at this time, China will be increasing the tariffs it imposed on over 5,000 U.S. products on September 24, 2018 (see Trump and Trade Update of September 19, 2018). With the May 13 announcement, the Ministry of Finance indicated that on June 1, 2019, 2,493 U.S. products will now be subject to a 25 percent tariff; 1,078 products will be increased to a 20 percent tariff; and 974 products will be subject to a 10 percent tariff. A 5 percent tariff will remain in place on 595 U.S. products. (Note: All of the linked documents related to the announcement by China’s Ministry of Finance are in Chinese. As soon as English translations become available, they will be posted.)
In response, President Donald Trump and U.S. Trade Representative (USTR) Robert Lighthizer have begun the process of implementing tariffs on another $300 billion of imports of Chinese products, which would result in U.S. tariffs on virtually all imported goods from China. In remarks to reporters, Trump stated, “China has been taking advantage of the United States for many, many years.” This morning, the president tweeted, “China buys MUCH less from us than we buy from them, by almost 500 Billion Dollars, so we are in a fantastic position.”
Yesterday, Lighthizer began the process of potentially raising tariffs on all remaining imports from China by requesting comments from the public and scheduling a public hearing on the proposal. Public comments on this proposed action must be submitted to the USTR no later than June 17, 2019. Parties wishing to testify at the hearing on June 17, 2019, must submit a request to appear no later than June 10, 2019. Any rebuttal comments resulting from these filings and the hearing must be submitted by June 24, 2019. The USTR requests comments as to any aspect of the proposed action, including:
- The specific tariff subheadings to be subject to increased duties, including whether the subheadings listed in the annex should be retained or removed, or whether subheadings not currently on the list should be added.
- The level of the increase, if any, in the rate of duty.
- The appropriate aggregate level of trade to be covered by additional duties.
The USTR requests that commenters address whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies and practices, and whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small or medium-sized businesses and consumers. The docket number for this proceeding is USTR-2019-0004. The full proposed product list of Chinese goods that could be covered by this action is available here.