To help make sense of recent announcements from the Trump Administration regarding tariffs on Chinese imports and the ongoing negotiations between the two countries, the American Sportfishing Association (ASA) released the following Frequently Asked Questions (FAQs) tip sheet.
What tariffs on Chinese imports have been announced to date?
Starting in May 2018, the Administration rolled out tariffs on Chinese imports over the course of four lists. Lists 1-3, covering about half of all Chinese imports, are currently subject to additional 25% tariffs. List 4, which covers the remaining half of all Chinese imports, including most sportfishing equipment, was separated into two sub-lists: List 4a and 4b. Products on List 4a are subject to additional 15% tariffs, which went into effect on September 1, 2019. Products on List 4b will be subject to additional 15% tariffs beginning on December 15, 2019. To determine which list your company’s product(s) fall under, you can search by HTS subheading on the U.S. Trade Representative (USTR) website.
What’s included in the recently announced “phase one” deal with China?
On October 11, 2019, President Trump announced “phase one” of a larger trade deal with China, although specific details are not currently available. This agreement is unlikely to be finalized before Presidents Trump and Xi Jinping meet in mid-November. It’s being reported that the “phase one” agreement includes China purchasing billions of dollars of U.S. agriculture products. Additionally, the scheduled tariff increases on Lists 1-3 products from 25% to 30%, originally planned to go into effect on October 15, 2019, have not gone into effect.
Has sportfishing equipment been excluded from any list of tariffs?
More exclusions of Lists 1-3 products were announced on September 20, 2019. However, the majority of recreational fishing equipment is included on Lists 4a and 4b, and no exclusion process has been announced yet for these lists. Therefore, no exclusions for products on these lists have been granted.
How can I get ready for the List 4 exclusion process?
Please note the exclusion process for Lists 4a (tariffs went into effect on September 1) and 4b (tariffs go into effect on December 15) has not yet been announced. However, ASA members may be interested in getting materials ready so that exclusion requests can be submitted as soon as the exclusion process goes live. Exclusions are granted on a rolling basis, so the sooner a company applies, the sooner they should receive a response.
While exclusion forms for Lists 4a and 4b have not been released, it is safe to assume the forms will be similar to previous forms. Here is the List 3 exclusion form, as an example.
Can I just make one exclusion request for all my products?
Multiple exclusions may need to be requested even for the same HTS code if there is considerable difference in the product description. When preparing your exclusion request(s), companies should be specific with their product description(s) – some will get thrown out at the first phase if not specific enough or correlating to the proper HTS code.
What points should I highlight in my exclusion request?
Products that have been successfully excluded from tariffs already in effect generally share a few key characteristics. Successful exclusion requests generally include an emphasis on the negative impact that tariffs are having on a company’s U.S. economic footprint (e.g., jobs, sales, tax payments, etc.). In addition, these requests explain why the product(s) cannot be readily sourced outside of China, whether in the U.S. or elsewhere.
In addition, ASA encourages its members to focus on the excise tax on fishing equipment. We believe that adding additional tariffs on an industry that is already paying an excise tax of up to 10% that funds conservation is a disproportionate burden that USTR must consider.
Can ASA apply for exclusions on behalf of the industry?
No, exclusions must be requested by individual companies. However, if asked, ASA will submit letters in support of members’ exclusion requests.
If granted, how long does the exclusion last?
Previous exclusions have lasted for one year, and companies have been reimbursed for tariffs paid to date.
Please keep in mind that trade relations between the U.S. and China – the world’s two largest economies – is constantly changing. ASA will continue to assist its members in navigating the China tariff situation, particularly as it pertains to exclusion requests. Please contact Mike Leonard, ASA’s Vice President of Government Affairs, with any further questions.