Please be advised that a Trump administration official has announced that the 15 percent tariffs on goods from China to the U.S. included on list 4A will be reduced to 7.5 percent thirty days from yesterday (January 15, 2020). President Trump previously announced the decrease, but it was not mentioned in materials released as part of the Phase One deal signed with China. A Federal Register notice on the reduction will be posted by the Office of the U.S. Trade Representative soon.
President Trump has announced that the Section 301 tariffs on goods from China that were set to take effect on December 15 have been cancelled, citing agreement on Phase 1 of a deal to ease China-US Trade tensions. Further negotiations between both countries are expected to begin immediately.
In addition, the 15 percent tariff that went into effect on September 1 on List 4A goods will be reduced to 7.5 percent. The 25 percent tariff on goods in Lists 1, 2, and 3 will remain in place.
Ocean freight carriers are beginning to announce substantial BAF increases for the first quarter of 2020 to offset the costs associated with ensuring their fuel is IMO 2020 compliant. The IMO 2020 regulations are in place to help curb sulphur emissions from marine fuels, and all carriers are expected to be in compliance by January 1, 2020.
Following months of protests in Hong Kong, blocked railways and roads are causing pickup delays for freight in the area. Though there are presently no delays for the ocean and air channels, the delay in pickup can result in freight reaching its destination slower than expected.
AGL is closely monitoring this situation and will advise you of any new developments that may cause delays in freight arrivals from Hong Kong.
On October 11, 2019, president Trump announced the cancellation of the October 15 tariff hike, providing a considerable relief on tariffs applied to Chinese imports. That hike would have taken Section 301 additional tariffs of 25 percent to 30 percent on Lists 1, 2 and 3, about $250 billion worth of imports.
This announcement comes as part of the first phase of a deal with China related to intellectual property, financial services and agricultural sales. The president disclosed that China would buy as much as $40 billion to $50 billion worth of American commodities and that good progress had been made on issues around technology transfer from American companies to Chinese partners.
Provided that all details are worked out, president Trump expects the first phase of the U.S.-China deal to be signed at the Asia-Pacific Economic Cooperation (APEC) meeting on November 16 or 17.
The next phase of trade talks would begin immediately after the first deal is signed. It is not clear at this point whether the December 15 round of tariffs will take place as planned.
AGL will continue to monitor this situation closely and advise you of any additional related details.
The International Longshore and Warehouse Union (ILWU) will observe a special stop work meeting for union business on Thursday, Oct. 3, 2019, starting at 5 p.m. Consequently, no marine terminal gates at the Ports of Los Angeles and Long Beach will be operating between 5:00 p.m. October 3rd through 3:00 a.m. October 4th.
The International Chamber of Commerce (ICC) has officially released Incoterms 2020. The updated Incoterms will take effect January 1, 2020 and will replace the current Incoterms (Incoterms 2010). The ICC has published the Incoterms for purchase on their website.
Per the ICC, some of the major changes from the current Incoterms are as follows:
- Incoterms® 2020 provides for demonstrated market need in relation to bills of lading (BL) with an on-board notation and the Free Carrier (FCA) Incoterms® rule.
- Incoterms® 2020 aligns different levels of insurance coverage in Cost Insurance and Freight (CIF) and Carriage and Insurance Paid To (CIP).
- Incoterms® 2020 includes arrangements for carriage with own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
- There is a change in the three-letter name for Delivered at Terminal (DAT) to DPU.
- Incoterms® 2020 includes security-related requirements within carriage obligations and costs.
President Trump announced yesterday that he will delay the increase in tariffs on $250 billion worth of goods from October 1 to October 15 as a “gesture of good will” to China. Trump stated that the move was “at the request of the Vice Premier of China, Liu He.”
Liu He will be in Washington in early October for negotiations. Barring an agreement being reached between the two sides, the tariffs on Section 301 Chinese Imports for List 1, List 2, and List 3 (with the exception of tariffs where exclusions have been granted) will increase from 25% to 30% on October 15.
U.S. Trade Representative (USTR) has advised that the additional ten percent tariff on List 4 section 301 products announced earlier in the year has been increased to fifteen percent. The products covered by Annex A (List 4A) will be subject to the 15 percent tariff beginning September 1, 2019 whereas the products covered in Annex C (List 4B) will be subject to the tariff beginning December 15, 2019. No mention has been made by the USTR of exemptions to the five percent increase.
Per the USTR notice, the increase was at “the specific direction of the president.” The notice cites China’s reaction to the U.S. announcement of the initial 10 percent increase as playing a role in the decision to increase the additional tariff from ten to fifteen percent. Per the notice, efforts were not made by China to address the underlying problems regarding trade between the two countries; instead, China imposed a retaliatory tariff on U.S imports. According to the USTR website, the status of the Exclusion Process for the products subject to the tariff is still to be announced.
U.S. Trade Representative (USTR) has just announced that certain products will be excluded from the additional 10% tariff on Chinese imports set to take effect on September 1. Per the announcement, these products will be excluded due to health, safety, national security or “other” factors. The USTR also noted that the additional tariff on certain products including cell phones, laptop computers, video game consoles, certain toys, computer monitors and certain items of footwear and clothing will be delayed until December 15. An exclusion process for products that remain subject to the additional tariff will be conducted.
Below are links to the lists of products on which the tariff will be imposed on September 1 and the list of products on which it will be imposed on December 15.