As agreed upon in the United States – China “Phase One” agreement, the U.S. will slash tariffs from 15 percent to 7.5 percent on Chinese imports from List 4, Annex A, on Feb. 14. U.S. Customs and Border Protection released a Cargo Systems Messaging Service (CSMS) on Feb. 4 with guidance on when and how the reduction will be implemented.
The United States Trade Representative (USTR) originally published a modification of Section 301 Action to the Federal Register to impose tariffs on $300 billion worth of Chinese goods. Tranche 4A went into effect on Sept. 1, 2019. USTR then published a modification to Tranche 4 on Jan. 22, 2020 to reduce the tariff percentage.
“Per 85 FR 3714, the decrease in import duties for Chinese goods covered by the Tranche 4, Annex A list of products subject to the Section 301 action are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM eastern daylight time on February 14, 2020,” the CSMS states.
The incremental progress in this Phase One U.S. – China agreement restores trade certainty to our bilateral relationship and will benefit motor vehicle parts manufacturers. The suspension and lowering of tariffs on List 4 are positive steps that benefits U.S. consumers.
However, MEMA remains concerned about the 25 percent tariffs that are still imposed on $250 billion in imports from China on Lists 1-3. These three lists contain hundreds of categories of motor vehicle parts and components as well as materials and chemicals. Those tariffs are problematic to our members’ supply chains and increase prices for U.S. consumers. You can read MEMA’s full statement on the trade agreement here.