In response to the recent news surrounding the trade war with China, Trade Risk Guaranty has prepared a new webinar explains the nuances around the topic. The presentation covers the following: - An Update on the Current State of Import Tariffs - Section 232: Autos and Auto Parts - Section 301: List 3 Increase to 25% - Section 301: List 4 Announcement - Bond Sufficiency - What's Next with Negotiations with China? - The Exclusions Released for List 1

1. Recap, EU Tariffs, & China Update
MAY 2019 UPDATE:
CHINESE TARIFF INCREASE

2. Nick Esposito
Business Development Manager
Bozeman, Montana
Trade Risk Guaranty Brokerage Services, LLC
nick.esposito@traderiskguaranty.com
1st

3. Gregg Cummings
Managing Partner, LCB, CCS
Bozeman, Montana
Strix Full Service Brokerage & Self-Filing Software
gregg@strixsmart.com
1st

4. • Located in Beautiful Bozeman Montana
• Established in 1991
• Direct-to-Importer Business Model
• Serving the entire International Trade community
STRIX & TRADE RISK GUARANTY

5. ON YOUTUBE
TRADE RISK GUARANTY - TRG

6. TODAY’S WEBINAR TOPICS
The Current State of Import Tariffs
Potential Section 301 Action Against E.U.
Section 301: Negotiations with China
Section 301: List 1 Exclusions

7. CURRENT STATE OF
IMPORT TARIFFS

8. RECAP ON SECTION 232
LEGISLATION COMMODITY COUNTRY OF ORIGIN ADDITIONAL TARIFF EFFECTIVE DATE
SECTION
232
Steel
All countries of origin are subject to this tariff except
Argentina, Australia, Brazil, and South Korea.
CANADA & MEXICO EXEMPT.
Argentina, Brazil, and South Korea are covered by Section
232 Absolute Quotas.
25% June 1, 2018
Aluminum
All countries of origin are subject to this tariff except
Argentina and Australia. CANADA & MEXICO EXEMPT.
Argentina is covered by Section 232 Absolute Quotas.
All imports from South Korea should use non-quota entry
type codes.
10% June 1, 2018
Automobiles & Auto
Parts
DELAYED
A decision was due MAR 17, but has been delayed by 180 days.
Uranium
Under Review
Results of the investigation were submitted to the President on APR 14, 2019. He has up to 90 days to
decide to take action.

9. SECTION 232: AUTOS & AUTO PARTS
On May 17, 2019, President Trump announced that he is
delaying a decision for 180 days.
• May 23, 2018 - Investigation on Automobiles & Auto parts initiated.
• February 2019 - The DOC reported their findings to the President.
• May 17, 2019 - The decision was delayed for 180 days.
During this time the President plans to hold talks with the European Union,
Japan, and possibly others that will likely seek to reduce imports from
those countries.

10. SECTION 232: AUTOS & AUTO PARTS
The DOC determined that U.S.-owned auto producers’
share of the domestic and global markets has fallen
sharply in recent decades.
• This decrease in sales revenues limits the research and development
expenditures necessary for long-term automotive technological
superiority
• This is seen as essential for national defense.

11. RECAP ON SECTION 301
LEGISLATION COMMODITY COUNTRY OF ORIGIN ADDITIONAL
TARIFF
EFFECTIVE
DATE
SECTION
301
List 1 China 25% July 6, 2018
List 2 China 25% August 23, 2018
List 3 China 25% (increased on
May 10th, 2019)
September 24,
2018
List 4 China List of HTSUS codes released for
public comment.
European Union List of HTSUS codes released for
public comment.
All import tariffs that have been implemented do not have an expiration date and
are in place until determined otherwise.

12. SECTION 301 –
HTSUS CODE LOOKUP
A free tool from Trade Risk Guaranty

13. SECTION 301
Tariff Action Against the E.U.

14. A HISTORY OF SECTION 301
Section 301 is a piece of U.S. government legislation that is
granted it’s power from the Trade Expansion Act of 1974.
• Intended to address foreign unfair trade practices affecting U.S. trade.
• May be used to respond to violations under bilateral and multilateral
trade agreements that deny U.S. rights under those agreements.
• May be used to respond to unreasonable, unjustifiable, or discriminatory
foreign government practices that burden or restrict U.S. commerce
even if those practices do not violate the explicit terms of an
international agreement.

15. SECTION 301 TARIFFS ON EU GOODS
The tariffs on EU goods is in retaliation to a long-standing
dispute over the number of subsidies being given to Airbus
by countries in the European Union.
• May 2018 – The WTO ruled that the EU failed to fully withdraw
subsidized financing to Airbus found to be inconsistent with WTO rules
and harmful to U.S. interests.
• The U.S. requested the authority to impose $11.2 billion worth of
countermeasures, a figure that the EU immediately challenged.
• A decision on this request is expected from the WTO this summer.

16. SECTION 301 TARIFFS ON EU GOODS
In order to get the process started so that the U.S. can
respond immediately when the decision is released, the
preliminary list was announced.
• April 8, 2019 - the USTR identified a preliminary list of $11 billion worth
of products to which additional duties may be applied.
• Additional tariffs of up to 100% may be applied.
• Electronic comments on these issues are due by May 28 under the
Docket # USTR-2019-0003 on regulations.gov

17. SECTION 301 –
HTSUS CODE LOOKUP
A free tool from Trade Risk Guaranty
An EU Tool Now Available

18. THE EU’S RETALIATION
The EU has published their own preliminary list of U.S.
products.
• This list is in response to the preliminary list published by the USTR and
to U.S. subsidies to Boeing.
• Additional tariffs of up to 100% may be applied.
• Some of the products include: Fish, cheese, agricultural goods such as
fruits and vegetables, chocolate, wine, spirit alcohols, lobster,
handbags/wallets, tractors, motorcycles/motorcycle parts, helicopters,
planes, video game consoles, exercise machines, tobacco, etc.

19. SECTION 301
List 3 Increases

20. THE INCREASE FROM 10% to 25%
As of May 10th, 2019, the additional tariff on $200 billion
worth of goods (List 3 goods) imported from China will be
increased from 10% to 25%.
• Such goods must still be reported under the additional HTSUS codes:
9903.88.03 or 9903.88.04.
• The increase applies to the following:
• Goods entered for consumption, or withdrawn from warehouse for
consumption, on or after 12:01 a.m. EST on May 10.
• Goods exported to the U.S. on or after May 10.

21. THE INCREASE FROM 10% to 25%
However, goods exported from their country of origin
before May 10 and entered into the U.S. on or after May
10, but before June 1 will remain subject to the 10% tariff.
• Goods that fall under this circumstance must be reported under the
new HTSUS 9903.88.09 to distinguish them from goods subject to the
25% rate.

22. ENTRY DATE VS DATE OF ARRIVAL
Additional tariffs are due on commodities based on their
ENTRY DATE.
• The entry date for a shipment is determined by the date the entry summary
is submitted AND the date the shipment arrives at the port of entry.
• Therefore, the goods must be physically present at the port of entry.
• If the duty (+ tariff) rate paid is calculated based on when the paperwork is
filed and that is different than the duty (+ tariff) rate for that commodity at
the time it physically arrives at port, Supplemental Duty Bills will be
issued.

23. LIST 3 EXCLUSION PROCESS
The USTR has announced plans to initiate a process for
requesting exclusions from the additional tariff on List 3
goods.
• No official notice has been published, but the List 3 exclusion request
process is expected to begin around June 30.
• The process will be “following the same procedures as those in rounds 1
and 2.”

24. SECTION 301
List 4 Announced

25. LIST 4 ANNOUNCED
On May 14th, 2019, the USTR announced the preliminary list
of HTSUS codes included on List 4.
• This list covers approximately $300 billion in imported goods from
China into the United States.
• The notice does not state the exact tariff that will be assessed, only that
“additional tariffs of up to 25% may be placed on these items.”
• The list includes toys, apparel, home goods, shoes, electronics, sporting
goods and child safety seats.

26. LIST 4 IMPORTANT DATES
An effective date for List 4 has not been announced.
• June 10, 2019: Due date for filing requests to appear and a summary of
the expected testimony at the public hearing.
• June 17, 2019: Due date for electronic submission of actual written
comments.
• June 17, 2019: The Section 301 Committee will convene a public hearing
at the U.S. International Trade Commission.
• Due date for submission of post-hearing rebuttal comments will be due
seven days after the last day of the public hearing.

27. THE USTR INVITES COMMENTS
The USTR requests comments with respect to any aspect
of the proposed action, including:
• The specific tariff subheadings to be subject to increased duties,
including whether the subheadings listed in the Annex should be
retained or removed, or whether subheadings not currently on the list
should be added
• The level of the increase, if any, in the rate of duty.
• The appropriate aggregate level of trade to be covered by additional
duties.

28. THE USTR INVITES COMMENTS
In commenting on the inclusion or removal of particular
HTSUS codes from List 4, commenters must address:
• Specifically whether imposing increased duties on a particular product
would be practicable or effective to obtain the elimination of China's
acts, policies, and practices.
• AND whether imposing additional duties on a particular product would
cause disproportionate economic harm to U.S. interests, including
small- or medium-size businesses and consumers.

29. HOW TO SUBMIT COMMENTS
Go to the homepage:
https://www.regulations.gov/
Enter the following Docket #:
USTR-2019-0004
Click button ‘Comment Now!’
All submissions must be in English and sent electronically through
regulations.gov

30. HOW TO SUBMIT COMMENTS
Regulations.gov allows users to submit comments by filling
in a `comment' field or by attaching a document using an
`upload file' field.
• Prefers that you submit comments in an attached document and it is
sufficient to type `see attached' in the `comment' field.
• Prefers submissions in Microsoft Word (.doc) or searchable Adobe
Acrobat (.pdf)

31. THE SPEED AT WHICH TARIFFS TRAVEL
The enforcement of the tariffs comes quickly once the
comment period begins.
• It is possible for tariffs on List 4 to begin any time after June 24, 2019.
LEGISLATION COMMODITY FIRST ROUND OF COMMENTS EFFECTIVE DATE # OF DAYS
SECTION 301
List 1 April 23, 2018 July 6, 2018 74 Days
List 2 July 23, 2018 August 23, 2018 31 Days
List 3 August 13, 2018 September 24, 2018 42 Days
List 4 June 10, 2019 N/A N/A

32. BOND SUFFICIENCY
Prepare for an Increase

33. LARGE IMPACT ON BOND SUFFICIENCY
Any increase to the duty rate you owe CBP can have a
huge impact on the sufficiency of your bond.
• Keep a close eye on your bond sufficiency and contact your bond
provider if necessary.
• If your bond is deemed insufficient by Customs, you will not be able to
import into the U.S. until you have placed a new bond.

34. LARGE IMPACT ON BOND SUFFICIENCY
TRG has seen a steady
trend of high volumes
of increases directly
following the roll out of
additional tariffs.
• With List 3 going from 10%
to 25%, we expect a high
volume of increases to
come through over the next
month.

35. LEARN ABOUT BOND SUFFICIENCY
How Chinese Tariffs Impact Bond Sufficiency
https://youtu.be/y91qQS1qyHE
What is Bond Sufficiency?
How the Tariffs Impact Bond Sufficiency
What Happens When your Customs Bond is Insufficient?
What is Stacking Liability on a Customs Bond?

36. QUICKER LIQUIDATION TIMELINE
ENTRY TYPE ENTRY
DATE
VALUE OF
SHIPMENT
DUTY
PAID
DUTY
RATE
LIQUIDATION
DATE
# OF
DAYS
01: Consumption
Free and Dutiable
5/20/2018 $202,306.00 $0.00 0% 4/12/2019 327
01: Consumption
Free and Dutiable
10/20/2018 $313,500.00 $31,350.00 10% 2/8/2019 111
01: Consumption
Free and Dutiable
5/16/2019 $480,371.00 $48,037.10 10% N/A N/A
Below is data from an importer subject to Section 301 tariffs.

37. QUICKER LIQUIDATION TIMELINE
ENTRY TYPE ENTRY
DATE
VALUE OF
SHIPMENT
DUTY
PAID
DUTY
RATE
LIQUIDATION
DATE
# OF
DAYS
01: Consumption
Free and Dutiable
5/31/2018 $109,468.00 $0.00 0% 4/26/2019 330
01: Consumption
Free and Dutiable
10/11/2018 $109,452.00 $10,945.20 10% 2/22/2019 135
01: Consumption
Free and Dutiable
5/22/2019 $26,720.00 $6,680.00 25% N/A N/A
Below is data from an importer subject to Section 301 tariffs.

38. WHAT’S NEXT?
Negotiations with China

39. WHERE DOES CHINA STAND?
‘Negotiate, sure! Fight, anytime! Bully us,
wishful thinking!’
• Up to this point, China has been reluctant to publish
propaganda over the trade war.
• The People’s Daily accused the U.S. of “greed and
arrogance,” explaining this is a “people’s war”
(phrase introduced by Mao Zedong to describe China’s
fight the Japanese)

40. WHERE DOES CHINA STAND?
In the wake of the
increased tariffs, the
mention of “trade war”
in Chinese media has
increased.
• The rhetoric has also been
amplified across state TV.
Chart from Bloomberg

41. U.S. BLACKLISTING OF HUAWEI
May 15, 2019, the U.S. escalated its fight against Huawei.
• The President signed an executive order barring US companies from
using telecoms gear from sources the administration deems a national
security threat.
• That action is seen as targeting China and Huawei.
• The Trump administration also added Huawei to the so-called Entity List
of companies it says undermine American interests.
• The DOC granted 90 days of relief for certain U.S. broadband
companies using Huawei equipment.

42. U.S. BLACKLISTING OF HUAWEI
"The Entities List action potentially challenges Huawei's
ability to produce equipment and service existing
customers. That's an essential challenge to China's most
successful company.“
-Scott Kennedy
Director of the Project on Chinese Business and Political Economy at the Center for
Strategic and International Studies in Washington

43. WHEN WILL TALKS RESUME?
Trade talks between the U.S. and China have stalled.
• China is in ‘no rush’ to restart trade talks and is prepared to suspend
talks if the U.S. isn’t “prepared to be realistic”
• China invited the U.S. delegation to Beijing, and Treasury Secretary
Steven Mnuchin appeared open to the offer, but no schedule was set.
• "Beijing is unlikely to continue serious trade negotiations when it feels
held hostage by the US," - Paul Triolo, head of the geotechnology practice at
consultancy Eurasia Group

44. WHEN WILL TALKS RESUME?
The President may meet face-to-face with the Chinese
President Xi Jinping at the G20 summit late next month.

45. LIST 1 EXCLUSIONS
Updates & Dates

46. STATS ON LIST 1 EXCLUSIONS
Hundreds more requests for exclusions from the Section
301 additional tariffs on imports from China have recently
been denied but many remain under consideration.
• According to the USTR, 10,837 requests were submitted for exclusions and,
as of May 10, USTR had denied 6,005 and granted 1,957.
• Of the remaining List 1 exclusion requests, 365 are undergoing an initial
review of whether the request should be granted based on specified criteria
and 2,510 are being reviewed with U.S. Customs and Border Protection to
determine whether the exclusion would be administrable.

47. STATS ON EXCLUSIONS
There have multiple rounds of exclusions granted to List:
• DEC. 28, 2018 – Round 1 of List 1 Exclusions
• MAR. 25, 2019 - Round 2 of List 1 Exclusions
• APR. 18, 2019 - Round 3 of List 1 Exclusions
• MAY 9, 2019 - Round 4 of List 1 Exclusions
Exclusions are available for any product that fits the
product description regardless of if the importer was the
one to file the exclusion.

48. STATS ON LIST 2 EXCLUSIONS
As for List 2….
• According to the USTR, 2,931 exclusion requests received for List 2.
• 956 have been denied and none have been approved at this time.
• 384 are undergoing substantive review and 1,577 (unchanged) are being
reviewed for administrability.

49. WHAT CAN YOU DO?

50. STAY INFORMED VIA A
RELIABLE NEWS OUTLET
Setup an email alert through your most
trusted news source so that you can be
updated as soon as news breaks
To read the official documents from the USTR:
https://ustr.gov/issue-areas/enforcement/section-301-investigations/record-section-301-investigation

51. CUSTOMS & BORDER
PROTECTION PARTNERSHIP
CBP enforces the regulations set in place by other
officials within the government.

52. CONSULTATION AVAILABLE
WITH STRIX
For more in-depth guidance on
an individual basis

53. HAVE MORE TARIFF
QUESTIONS?
https://traderiskguaranty.com/tariff-news-resources/

54. COVERED IN TODAY’S WEBINAR
The Current State of Import Tariffs
Potential Section 301 Action Against E.U.
Section 301: Negotiations with China
Section 301: List 1 Exclusions

55. SUBMIT YOUR QUESTIONS
AND/OR FEEDBACK

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International Trade Professionals - TRG
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