Section 301 (China Tariffs)
As we near the end of the year, US importers are diligently planning for 2021. As part of this process, the additional Section 301 tariffs (at 25% or 7.5%) must be taken in to consideration. “What’s going to happen with tariffs in 2021?” has been a question posed by many. The probability is quite low that any additional exclusions will be extended past December 31st, and there hasn’t been discussion about eliminating or reducing tariffs by the US Government or Office of the President. However, there is still some relief on the horizon.
Unless there is a hearing and investigation with ‘just cause’ for the tariffs to continue, Section 301 actions are designed to remain in place for 4 years, and automatically terminate once that time period expires. This means the additional 25% duty on the first wave of goods impacted by Section 301 (List 1) will fall off in July of 2022. This date is September 2023 for List 4 and the additional 7.5% duty.
These dates are important for US Companies to note, since one of the biggest complaints about managing Section 301 issues as part of the supply chain has been a lack of communication and understanding regarding implementation dates, next steps, required actions, deadlines, and expirations.
USTR’s Investigation on Vietnam
The first steps in the recently initiated investigation into some of Vietnam’s trade practices has been announced. At the request of the US trade community, the USTR will be holding two hearings in December, one for each of the issues under investigation. The first hearing will be held December 28th and will address concerns of illegally harvested or traded timber. The second hearing will be held the following day, December 29th, and will discuss concerns of currency manipulation by the Vietnamese government, and the potential impacts it has on US companies and commerce.
All parties wishing to appear at either hearing must make a request to the USTR by December 10th to be considered. After each of the hearings, rebuttals can be submitted on both topics until January 7th, 2021.
Please contact your Laufer representative for more information on any topic discussed in this week’s market letter. We have a team of experts on staff who would be happy to help you navigate the complexities of these scenarios.