Trump Tariffs: What Importers Need to Know
Since 2018, U.S. President Donald J. Trump has announced and enacted numerous tariffs targeted at products imported from China, with a goal of reducing the United States’ trade deficit with that country.
Specifically, the administration decided to impose a tariff increase of 10 percent on many commonly imported items, placing them on List 4 of Section 301 in the U.S. Official Harmonized Tariff Schedule.
The items facing the tariff increase are divided into two groups, List 4A and List 4B. Let’s delve into what this list includes, and when the imported items will be affected.
When will tariff increases go into effect?
Items on List 4A in Section 301 of the Official Harmonized Tariff Schedule (OHT) are scheduled to be subject to the tariff increase beginning Sept. 1, while items on List 4B will see the tariff increase beginning Dec. 1.
However, in yet another tariff maneuver announced in mid-August, the Office of the U.S. Trade Representative said the administration was delaying until Dec. 15 the tariff increase on certain items within List 4A.
This delays tariff increases few months on Chinese imports of items such as laptops, computers, phones, video game consoles, toys, footwear and clothing.
The Trump administration decided to delay tariffs on these popular direct-to-consumer items as the country nears the 2019 holiday shopping season.
What products will have tariff increases?
List 4A is an extensive 122-page list encompassing a large variety of products including live animals, meat products, dairy products, plants, spices, legumes, sugar and many others.
The 10 percent tariff increase for List 4A items not included in the exemption goes into effect on Sept. 1.
List 4B is rather small compared with List 4A, as it encompasses a mere 21 pages of tariffs on imported products. These include a number of household items; essential oils and chemical components; certain fish, nuts and other foods; textiles, clothing and shoes.
All of the items on List 4B of the OHT will experience the 10 percent tariff increase on Dec. 15.
Out of the nearly 4,000 products included in the tariff proposal increase in May, only 25 items did not have tariff increases placed upon them.
What effect will the tariffs have?
With List 4A tariffs set to roll out in mere weeks, potential effects on the Chinese, U.S. and world economies remain relatively unknown. There is cause for concern that American wallets will take a hit in the upcoming holiday season since big retailers will be subject to new tariffs.
As long as the trade battle between the United States and China continues, businesses and customers will continue to suffer. The long term effects of this trade war are impossible to foresee but with the markets' current trajectory the economy will continue to slow.