The Section 301 additional tariffs on List 4A goods from China will be reduced from 15% to 7.5% on February 14, the effective date of the U.S-China Phase 1 trade agreement. The full list of affected goods, valued at approximately $120 billion, is available by clicking here.
According to U.S Customs and Border Protection (CBP), any covered article entered or withdrawn for consumption on or after 12:01 a.m. EST on February 14 will be subject to the 7.5% duty rate in addition to the applicable general (Column 1) duty rate. Entries for affected goods must be reported using HTSUS subheading 9903.88.15.
Covered goods admitted to a foreign-trade zone under privileged status will be subject to tariff classification at the rate of duty and tax in force on the date the application for privileged foreign status was filed. CBP also advised that immediate delivery procedures are not applicable.
The 25% tariffs on List 1, 2, and 3 goods will remain in place for the foreseeable future.
China Reduces Some Tariffs on U.S. Goods
Beijing announced this morning that additional tariffs levied against 1,717 American goods last year would be cut in half, following the signing of the Phase 1 deal. China’s Finance Ministry said the tariffs would be cut from 10% to 5% and others would be lowered from 5% to 2.5%, effective February 14. The Ministry has not yet released a list of the goods affected by the decision, but said the tariff reductions correspond with the reductions announced by the U.S. on Chinese goods.
China’s Global Times, citing an unnamed Chinese trade expert close to the government, reported that Beijing is considering invoking a disaster-related clause in the Phase 1 deal, which might allow it to avoid repercussions if it cannot fully meet the targeted purchases of American goods and services in 2020 amid the Coronavirus outbreak.
While Washington welcomed the tariff reductions as a “big step in the right direction,” it said it expected China to live up to its obligations in the Phase 1 trade deal, despite the outbreak.
About the Phase 1 Trade Deal
The Phase 1 deal was signed on January 15, 2020 and marks the commencement of a three-part trade deal proposed by President Trump in October 2019.
Under the terms of the Phase 1 deal, China has agreed to levy stricter penalties for Intellectual Property theft, prohibit the forced transfer of technology in exchange for market access, the adoption of a dispute settlement arrangement, and expand trade by importing at least $200 billion more in American goods and services than it did in 2017. In exchange, the U.S. has agreed to reduce the Section 301 List 4A tariffs from 15% to 7.5.
Click here to view the full text of the Phase One trade agreement.
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Sources:
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- STR Trade Report, 1) CBP Issues Guidance on Feb. 14 Tariff Reduction on China List 4A Goods and 2)S., China Sign Phase One Trade Agreement
- Reuters, China to halve tariffs on some U.S. imports as coronavirus risks grow
- Fox Business, China to halve tariffs on some U.S. Imports as virus risks escalate
