China Tariff Increase and Panama Canal Update

China Tariffs to Increase on Friday

The U.S. Trade Representative has confirmed the China tariffs on Section 301, List 3 will increase on May 10, 2019.


In response to Beijing’s efforts to undermine a U.S. trade deal, U.S. Trade Representative Robert Lighthizer announced that tariffs on $200 billion of Chinese-origin goods will increase from 10% to 25% at 12:01 a.m. on Friday.  The announcement was made after President Trump tweeted about the increase on Sunday.  The 25% duty will be assessed in addition to any regular duty rates that apply to List 3 goods imported from China.  The increase will be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. EST on Friday, May 10, 2019.

For goods that are scheduled to arrive in the U.S. prior to May 10, importers may elect the date of the vessel’s arrival in port limits as the entry date in order to accelerate the date of entry and to avoid the duty increase.  Importers opting for this strategy must specifically request that the date of arrival be deemed the date of entry when filing entry documentation with U.S. Customs.  Importers are encouraged to contact their OCEANAIR customs broker to confirm that the appropriate declarations are made prior to entry.

The Trump Administrations has also warned that a 25% tariff may be applied shortly to all remaining untaxed goods from China.

The Chinese Commerce Ministry announced on Wednesday that Beijing will retaliate against the U.S. if Washington follows through on its threat to increase the tariffs on Friday, although further details have not yet been announced.

Despite the tariff threats, talks are scheduled to resume in Washington later this week.


Preparations Begin for an Exclusion Process for List 3

Lighthizer also announced this week that the agency has “begun preparations to launch” an exclusion process for Section 301, List 3 tariffs.

In an effort to assist small businesses that have been financially impacted by the Section 301 tariffs, the USTR is working with the Small Business Administration (SBA) as well as with individual requesters to apply for exclusions.  The USTR has created a two-page simplified form to make it easier for small businesses to submit exclusions requests as well as frequently asked questions to address small business concerns.

The USTR is not considering an appeals process for any Section 301 exclusion decisions.



Panama Canal Announces a Sixth Draft Reduction Due to Severe Dry Season

As the severe dry season continues, the Panama Canal Authority has announced a sixth draft reduction for vessels transiting the new neopanamax locks, effective May 28.  The maximum draft for transiting the new locks will be restricted to 43 feet of Tropical Fresh Water (TFW), down from the previous draft reduction of 44 feet of TFW.  Impacted services may face further weight and space limitations, and rollover or booking rejections may occur.

Shippers should plan accordingly and should confirm verified gross mass weight limitations to avoid disruptions to their supply chain.  We will continue to monitor the situation at the Panama Canal and advise our customers of any updates.  For more information, please click here.




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