On Sunday, May 5, 2019, President Trump announced via Twitter that the tariff rate on the third tranche (List 3) of Section 301 tariffs would be increasing from 10% to 25% on Friday, May 10, 2019. According to the tweet, the reason for the increase is that the trade deal negotiations are moving “too slowly” and China’s attempt to “renegotiate.”
In the tweet the President also stated that an additional $325 billion dollars’ worth of goods “will be shortly” taxed at a rate of 25%.
….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!
— Donald J. Trump (@realDonaldTrump) May 5, 2019
The third tranche of Section 301 tariffs is on $200 billion worth of Chinese products. The U.S. initially planned to increase tariffs on these products from 10% to 25% on March 1, 2019; however, President Trump delayed the increase on February 24 as the U.S. and China were making “substantial progress” in their negotiations at the time. (See our previous post here.)
U.S. Trade Representative Robert Lighthizer has previously indicated that should the tariff rate increase to 25% they would institute an exclusion process. However, no official announcement has been released as to the tariff increase or an exclusion process at the time of this posting.
We will continue to monitor this situation closely. For more information on the Section 301 tariffs on China, please contact Robert Stang, Jeffrey Neeley, Nithya Nagarajan, Cortney Morgan, or Beau Jackson.