Trade Issues Continue to Evolve for Parts Suppliers

Date: May 14, 2019

This week brings continued concerns for the motor vehicle supplier industry. Notably, President Trump’s decision to raise the Sec. 301 tariff rate to 25 percent on the third list of Chinese products effective May 10 led to several new trade actions. For starters, Beijing announced on Monday retaliatory tariffs on $60 billion in U.S. goods. Additionally, with the increase in tariff rates, USTR will now issue an exclusion process for the third and largest tranche of products under Section 301. While there is no notice published yet, MEMA expects one in the upcoming weeks and will notify members when a process is put in place. Additionally, USTR issued a notice clarifying that shipments from China that departed China before May 10 and enter the United States before June 1 will be subject to a 10 percent tariff rate.

In addition to the recent action on 301 tariffs, another important deadline for the 232 report on autos and auto parts approaches this week. President Trump has until May 18th to decide if he would like to act on any findings from the Commerce Department’s Section 232 report submitted in February. Although the deadline is approaching, it is expected that Trump is likely to extend that deadline by another 180 days as he continues negotiations with the European Union.

Finally, USMCA continues to be a major issue for the administration and Congress. While there is no major update this week, MEMA will continue to advocate and support the passage of USMCA.

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