China Tariff Review Launched as Tai Signals Openness to Change
U.S. Trade Representative Katherine Tai said this week that changes to the Section 301 tariffs on imports from China are a possibility as part of a broader effort to combat rising inflation in the U.S. Such changes could be made following a review of the tariffs that USTR will launch in the coming days.
At a May 2 event in California, Tai said “all tools are on the table,” including tariffs, when considering how to address rising prices. Tai has been resistant to the idea of lowering the China tariffs, which she has said give the U.S. leverage in negotiations on trade irritants with Beijing. Senior Biden administration officials have started raising the idea more frequently in recent weeks, though, and Tai’s comments could signal a softening of her position. However, she stressed in her comments the need to ensure that “whatever we do right now [regarding the tariffs] … doesn’t undermine the medium-term design and strategy that we know we need to pursue” with respect to U.S.-China trade relations.
The following day USTR announced its long-awaited review of the Section 301 tariffs on List 1 and 2 goods from China, which are currently scheduled to expire July 6 and Aug. 23, respectively. Requests to continue these tariffs may be submitted by representatives of domestic industries that benefit from them (1) between May 7 and July 5 for List 1 goods and (2) between June 24 and Aug. 22 for List 2 goods. USTR said it will also consider the tariffs on List 3 and List 4A goods “as applicable” to the List 1 and List 2 actions but gave no further details.
If USTR receives a continuation request it will announce that fact and continue the tariffs. USTR will then undertake a separate review in which it will accept comments from all interested persons on issues such as the effectiveness of the tariffs in achieving the objectives of Section 301, other actions that could be taken, and the effects of the tariffs on the U.S. economy, including consumers.
In the meantime, efforts to ameliorate the impact of the tariffs are continuing.
Source: ST&R
In Circles
Brace up -
The Los Angeles and Long Beach ports are expecting yet another surge which will cause more delays.
This spring, many companies chose to bring in back-to-school supplies way earlier than usual which collided with peak season imports. On top of that, there is an anticipated backlog of cargo which will soon set sail from mainland China as soon as Shanghai ends its COVID lockdowns.
At Capacity
Warehouses in Southern California do not have space for all this expected cargo. They are already running at near capacity so that would mean the new imports will have to sit on the docks until the warehouses clear up space.
On April 12, Gene Seroka, executive director of the Port of Los Angeles, told a virtual press conference that there were 46 container ships headed to Southern California which is pretty average for this time of year. As soon as China opens, that number will majorly increase.
Rebound
“We expect a pretty quick recovery [in volumes],” said Seroka.
Despite the projected decline in US imports in May due to Shanghai’s lockdown, Global Port Tracker, which is published by the National Retail Federation and Hackett Associates, forecasts that US imports will increase 5.2 percent in June, 5.6 percent in July, and 3.3 percent in August.
It seems like yesterday was a good time to restructure the way the ports and warehouses manage their flow. Until then, consumers can expect delays on their packages.
Source: JOC