US-China Update: Is It a Trade War Yet - Or Just a Showdown? China Responds to US Threats of Additional Tariffs on Chinese Products (IRB No. 574)

Immediately after the United States Trade Representative (USTR) proposed an additional duty of 25% on over 1300 categories of products from China, China’s Ministry of Commerce (MOFCOM) responded with its own proposed list of 106 US product types that will be subject to additional tariffs of 25%. The USTR’s announcement followed the March 22, 2018 publication of the USTR’s “Section 301” investigation report. MOFCOM’s response to the US Section 301 tariffs was as swift as MOFCOM’s recent riposte to US “Section 232” import remedies against Chinese steel and aluminum products, involving MOFCOM’s suspension of existing duty concessions on 128 US agricultural and other product types.

Below is a brief overview of the latest moves by the US and China. When the US Section 301 tariffs and China’s retaliatory tariffs will actually go into effect is uncertain. In contrast, the US Section 232 remedies took effect on March 23, 2018, followed on April 2, 2018, by entry into force of China’s retaliatory action (notice in Chinese).

US Action                                              

The USTR’s March 22, 2018 report on the Section 301 Investigation of China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation details the USTR’s findings that certain acts, policies, and practices of China are unreasonable or discriminatory and burden or restrict US commerce. In an April 3, 2018 Notice, the USTR proposed that a broad range of products imported from China be subject to additional tariffs. 

These products, proposed to be subject to an additional 25% duty, are defined by 1333 eight-digit subheadings of the Harmonized Tariff Schedule of the US (HTSUS). The full list is provided in the Annex to the USTR’s Notice of this proposed tariff action. These HTSUS subheadings cover a wide variety of products such as pharmaceuticals, chemicals, articles of rubber, articles of iron, steel, and aluminum, nuclear reactor and related products, electrical machinery, televisions and monitors, information and communication technology, motor vehicles, industrial vehicles, aerospace, ships and boats, various measuring and checking devices, clocks and watches, military items, and furniture products, among others. 

The USTR’s Notice announced that the proposed tariff action is open to public comment and a public hearing. Requests to appear at the hearing, with summaries of expected testimony, are due by April 23, 2018; additional written comments are due by May 11, 2018; the hearing itself will occur on May 15, 2018; and post-hearing rebuttal comments are due by May 22, 2018.

Additionally, on March 23, 2018, the USTR initiated a World Trade Organization (WTO) dispute against China regarding certain aspects of China’s regulations. Because the USTR is addressing these through the WTO, they were not taken into account in the development of the proposed tariff and list of product types.

China Action

On April 4, 2018, China’s MOFCOM announced plans to impose an additional 25% tariff on 106 products imported from the US. The retaliatory move comes after the USTR’s April 3rd proposal of an additional 25% tariff on imports of over 1,300 Chinese product types (as noted above) under Section 301 of the Trade Act of 1974.  The US products targeted by China’s announcement include soybeans, motor vehicles, aircraft, beef, chemicals, cigarettes, corn products, wheat, orange juice, cotton, and whisky. These products constitute up to $50 billion of China’s imports from the US.

China alleges that the proposed US Section 301 measures violate WTO rules, severely infringe China's rights under the WTO, and threaten China's economic interests and safety.  The final tariff measures and implementation date will be announced by MOFCOM at a later, undefined date. We have provided an unofficial translation of China MOFCOM’s proposed list of targeted US products, below.

BCLP Assistance in Contesting the US/China Actions

BCLP will be assisting clients in preparing written comments and briefs for submission to the USTR contesting the inclusion of specific products or product types.  We are also available to assist clients in preparing for the public hearing scheduled for May 15th.  With respect to China’s imposition of retaliatory tariffs, our Shanghai office is available to assess the impact on an industry- or product-specific basis.

Proposed Imports from the United States Subject to Additional 25% Tariff

[Unofficial Translation of the China MOFCOM List]

 

Tariff Code

Product

1

12019010

Yellow soybeans

2

12019020

Black soybeans

3

10059000

Other corns

4

11022000

Corn flour

5

52010000

Uncombed cotton

6

14042000

Cotton linters

7

10079000

Other grain sorghum

8

23033000

Brewing or distilling dregs and wastes

9

10011900

Other durum wheat

10

10019900

Other wheat and maslin

11

02011000

Fresh and chilled carcasses and half-carcasses beef

12

02012000

Fresh and chilled bone-in beef

13

02013000

Fresh and chilled deboned beef

14

02021000

Frozen carcasses and half-carcasses beef

15

02022000

Frozen bone-in beef

16

02023000

Frozen deboned beef

17

02062900

Other frozen bovine offal

18

20089300

Cranberries prepared or preserved by other methods

19

20091100

Frozen orange juices

20

20091200

Non-frozen orange juice with a Brix value not exceeding 20

21

22083000

Whiskies

22

24011010

Unstemmed flue-cured tobacco

23

24011090

Other unstemmed tobacco

24

24012010

Partly or wholly stemmed flue-cured tobacco

25

24012090

Other partly or wholly stemmed tobacco

26

24013000

Tobacco refuse

27

24021000

Cigars produced with tobacco

28

24022000

Cigarettes produced with tobacco

29

24029000

Cigars and cigarettes produced with tobacco substitutes

30

24031100

Water pipe tobacco described in the subheading notes of this Chapter

31

24031900

Other smoking tobacco

32

24039100

“Homogenized” or “reconstituted” tobacco

33

24039900

Other tobacco and tobacco substitute products; tobacco extracts and essences

34

87032362

Off-road vehicles with a cylinder capacity exceeding 2.5L but not exceeding 3L

35

87034052

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 2500 ml but not exceeding 3000 ml

36

87032342

Off-road vehicles with a cylinder capacity exceeding 1.5L but not exceeding 2L

37

87034032

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 1000 ml but not exceeding 1500 ml

38

87032343

Station wagons (9 seats or less) with a cylinder capacity exceeding 1.5L but not exceeding 2L

39

87034033

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and station wagons (9 seats or less) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 1000 ml but not exceeding 1500 ml

40

87032413

Station wagons (9 seats or less ) with a cylinder capacity exceeding 3L but not exceeding 4L

41

87034063

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and station wagons (9 seats or less) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 3000 ml but not exceeding 4000 ml

42

87032352

Off-road vehicles with a cylinder capacity exceeding 2L but not exceeding 2.5L

43

87034042

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 2000 ml but not exceeding 2500 ml

44

87032353

Station wagons (9 seats or less) with a cylinder capacity exceeding 2L but not exceeding 2.5L

45

87034043

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and station wagons (9 seats or less) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 2000 ml but not exceeding 2500 ml

46

87032412

Off-road vehicles with a cylinder capacity exceeding 3L but not exceeding 4L

47

87034062

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 3000 ml but not exceeding 4000 ml

48

87033312

Diesel type off-road vehicles with a cylinder capacity exceeding 2.5L but not exceeding 3L

49

87035052

Other vehicles that are equipped with compression ignition type reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 2500 ml but not exceeding 3000 ml

50

87032363

Station wagons (9 seats or less) with a cylinder capacity exceeding 2.5L but not exceeding 3L

51

87034053

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and station wagons (9 seats or less) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 2500 ml but not exceeding 3000 ml

52

87032422

Off-road vehicles with a cylinder capacity exceeding 4L

53

87034072

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor, and off-road vehicles (4WD) that can be charged by plugging in an external power source and with a cylinder capacity (displacement) exceeding 4000 ml

54

87034090

Other vehicles that are equipped with compression ignition type reciprocating piston internal combustion engine and a drive motor, and other vehicles that can be charged by plugging in an external power source

55

87035090

Other vehicles that are equipped with compression ignition type piston internal combustion engine (diesel or semi-diesel engine) and a drive motor, and other vehicles that can be charged by plugging in an external power source

56

87036000

Other vehicles that are equipped with spark-ignition reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source

57

87037000

Other vehicles that are equipped with compression ignition type reciprocating piston internal combustion engine and a drive motor and can be charged by plugging in an external power source

58

87038000

Other vehicles equipped only with drive motors

59

87039000

Other vehicles

60

87043100

Other gasoline type truck not exceeding 5 tons

61

87084099

Gear boxes and parts for vehicles not specified in the PRC Tariff Schedule

62

27111200

Liquid Propane

63

39074000

Polycarbonates in primary forms

64

38151200

Carrier catalysts with precious metal or its compounds as the active substance

65

38220010

Diagnostic or laboratory reagents on a backing, except for goods classified under 32023206

66

38249999

Other chemical products and preparations for the chemical industry and related industries that are not elsewhere specified

67

38248700

Products listed in the subheading explanatory note 3 of this Chapter containing perfluorooctane sulfonic acid and its salts, perfluorooctyl sulfonamide or perfluorooctane sulfonyl chloride

68

38248800

Products listed in subheading explanatory note 3 of this Chapter containing four, five, six, seven or octabromodiphenyl ethers

69

38248500

Products listed in subheading explanatory note 3 of this Chapter Containing 1,2,3,4,5,6-HCH (6,6,6) (ISO), including lindane (ISO, INN)

70

38249100

Mixtures and products that are mainly composed of dimethyl (5-ethyl-2-methyl-2oxo-1,3,2-dioxaphosphorin-5-yl)methylphosphonate and double [(5-ethyl- 2-methyl-2oxo-1,3,2-dioxaphosphorin-5-yl)methyl]methylphosphonate (FRC-1)

71

38248600

Products listed in the explanatory note 3 of this Chapter containing PeCB (ISO) or Hexachlorobenzene (ISO)

72

38248400

Products listed in the explanatory note 3 of this Chapter containing aldrin (ISO), toxaphene (ISO), chlordane (ISO), chlordecone (ISO), DDT (ISO) [Diptrix (INN), 1,1,1-trichloro-2,2 - Bis(4-chlorophenyl)ethane], Dieldrin (ISO, INN), Endosulfan (ISO), Endrin (ISO), Heptachlor (ISO), or Mirex (ISO)

73

38151900

Other carrier catalysts

74

39079999

Other polyester

75

38159000

Other reaction initiators and accelerators not specified in the PRC Tariff Schedule

76

39011000

Polyethylene in primary forms with a gravity proportion of less than 0.94

77

29261000

Acrylonitrile

78

34039900

Lubricants (without oil or oil extracted from bituminous minerals)

79

38220090

Diagnostic or laboratory reagents, whether attached to a backing or not, except for goods classified under 32023206

80

38112900

Lubricating oil additives without oils or oils obtained from bituminous minerals

81

39073000

Epoxide resins in primary forms

82

39206200

Other polyethylene terephthalate plates, sheets, foil and flat strip

83

39199090

Other self-adhesive plates, sheets, film and other materials

84

39209990

Other plastic non-foam plastic plates and sheets

85

39269090

Other plastic products

86

39019090

Other ethylene polymers in primary forms

87

39014090

Other ethylene- α-olefin copolymers with a gravity proportion less than 0.94

88

39069090

Other acrylic polymers in primary forms

89

39041090

Other pure polyvinyl chloride in primary forms

90

39100000

Polysiloxane in primary forms

91

39119000

Other polysulphides and polysulphones in primary forms, and other new products not specified under other HS codes provided for in explanatory note 3 of Chapter 39

92

39219090

Other plastic plates, sheets, film, foil and flat strip not specified  in the PRC Tariff Schedule

93

29031500

1, 2-Dichloroethane (ethylene dichloride)

94

40023990

CIIR or BIIR, in plates, sheets and strip

95

29349990

Other heterocyclic compounds

96

35069190

Other adhesives based on rubber or plastics

97

39081011

Polyamide-6,6 slices

98

39072090

Other polyethers in primary forms

99

39121100

Unplasticized cellulose acetate in primary forms

100

39089010

Aromatic polyamides and their copolymers

101

39089020

Semi- aromatic polyamides and their copolymers

102

39089090

Other polyamides in primary forms

103

39201090

Other vinyl polymer plates, sheets and tapes

104

34021300

Non-ionic surface-active agents

105

34031900

Lubricant (the oils containing petroleum oils or oils obtained from bituminous minerals are less than 70% by weight)

106

88024010

Aero-planes and other aircrafts of an unladen weight exceeding 15000 kg but not exceeding 45000 kg

Notes: The commodity descriptions above are for reference only. The specific commodity scope shall be determined in accordance with the commodity scope of the corresponding HS codes specified in the Import and Export Tariff Schedule of the People’s Republic of China.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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