October 21, 2019

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Trump Administration Provides Further Relief for List 3 Tariffs as Trade Agenda Pushes Forward

On February 24, 2019, President Trump tweeted that as a result of substantial progress in the negotiations between the United States and China, additional tariffs on List 3 would not increase from 10 percent to 25 percent on March 2, as previously scheduled. At this point, no new deadline for the previously proposed increase has been formally announced.

As background, on September 24, 2018, Chinese products on List 3 of the Section 301 retaliatory tariffs, representing approximately $200 billion in annual imports from China, became subject to an additional 10 percent tariff. These were scheduled to increase to 25 percent on January 1, 2019. However, in consideration of ongoing trade negotiations with China, the White House previously announced that the List 3 tariffs would remain at 10 percent until March 1, 2019, but would increase to 25 percent on March 2.

Per President Trump’s tweet on February 24, 2019, that increase has again been delayed as trade negotiations continue, although no specific date was provided. We expect that the delay will be announced in the Federal Register shortly.

On a parallel track, Congress has voiced its intention for USTR to implement an exclusion process for List 3 products. It is expected that USTR will initiate such a process for List 3 by mid-March 2019. In anticipation of potential exclusions, interested parties should begin gathering pertinent information to support an exclusion request for List 3 products.

It is also worth noting that previously submitted exclusion requests for Lists 1 and 2 are still under review by USTR. It is not clear when the agency will complete the review process.

Outside trade issues with China, the administration continues to actively pursue a variety of other significant trade initiatives which warrant monitoring.

USMCA

The administration is pushing Congress to pass the newly negotiated United States-Mexico-Canada Agreement, (also styled NAFTA 2.0). With a new Democratic majority in the House, the administration is negotiating with Congress to gain its support for the agreement.

Section 232 on Autos and Automotive Parts

The Department of Commerce (DOC) launched an investigation to determine whether imports of automobiles and automotive parts threaten the national security of the United States, pursuant to Section 232 of the Trade Expansion Act. DOC provided its report to the President on February 17, 2019, but that report has not been made public yet, not even to Congress. The President has until May 17, 2019, to determine whether to accept DOC’s findings and what actions should be taken.

Bilateral Agreements

The administration continues to push ahead with new bilateral agreements. Of note, the administration has signaled its goal of entering into negotiations with Japan, the European Union, and the Philippines.

Emerging Technologies

The administration continues to move forward on implementing export controls on emerging and foundational technologies, pursuant to last year’s National Defense Authorization Act. The 2019 National Intelligence Strategy, issued on January 22, 2019, continues this focus by highlighting developments in emerging technologies that “have the potential to pose significant threats to U.S. interests and security.”

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About this Author

Nate Bolin, Drinker Biddle Law Firm, Washington DC, Litigation Law Attorney
Partner

Nate Bolin has significant experience advising clients in compliance, transactional, litigation, policy and regulatory matters involving U.S. export controls, U.S. International Traffic in Arms Regulations (ITAR), economic sanctions, and related areas of national security and international trade law.

In corporate transactions and mergers and acquisitions, Nate regularly advises buyers, sellers and investors on the impact of U.S. export controls, customs laws, trade remedy laws, existing bilateral and multilateral trade...

(202) 230-5888
Kathleen Murphy, International trade Lawyer, Drinker Biddle
Partner

Kathleen M. Murphy counsels clients on maximizing trade benefits, making informed global procurement decisions and developing domestic and international trade compliance programs. She represents clients in duty-recovery initiatives and customs challenges concerning tariff classification, valuation, Free Trade Agreements and country of origin determinations, among other areas. She guides clients through compliance audits and validations, as well as penalty investigations conducted by U.S. or foreign customs authorities. She also represents clients in deliberations with the Centers of Excellence and Expertise and with Customs Headquarters personnel.

312-569-1155
Douglass Heffner, International trade lawyer, Drinker Biddle
Partner

Douglas J. Heffner litigates customs and international trade matters including antidumping duty, countervailing duty and safeguard cases. He represents foreign companies in Canada, Europe, Japan and Mexico, as well as domestic producers in industries that range from high-tech to heavy industry, to consumer and industrial goods. He also represents trade associations, government agencies and embassies in a broad range of matters.

202-230-5802
William Rucker, Drinker Biddle Law Firm, International Trade and Customs Specialist
Partner

William R. “Randy” Rucker assists clients with all aspects of U.S. Customs law, including the classification and valuation of merchandise, country of origin and marking determinations, quantitative import restraints, duty-preference and savings programs, understanding and receiving the benefits of free trade agreements, compliance audits, enforcement actions and other trade-related matters.

In order to assist clients with their compliance efforts and satisfy "reasonable care" requirements, Randy frequently performs reviews of companies' internal...

312-569-1157
James Sawyer, Drinker Biddle Law Firm, Chicago, Trade Law Attorney
Partner

James L. Sawyer counsels clients in all areas of U.S. import laws and regulations, including tariff classification, valuation, origin determination and marking, Free Trade Agreements, and duty preference programs. He chairs the firm’s Customs and International Trade Team and is the Regional Partner in Charge of the firm's Chicago office.

James represents clients in enforcement proceedings and investigations, Focused Assessment audits, and other verification proceedings conducted by U.S. Customs and Border Protection (CBP). He frequently assists clients craft...

312-569-1156