China’s foreign ministry said the U.S. must withdraw allegations against two state-linked Chinese hackers charged Dec. 20 with intellectual-property cybercrimes or risk endangering U.S.-China trade negotiations aimed at averting a March 2 increase in Section 301 tariffs on Chinese imports. China urges the U.S. “to immediately correct its wrongdoings, stop defaming and discrediting China on the cybersecurity issue, and withdraw its so-called charges against the Chinese nationals so as to avoid seriously damaging bilateral relations and bilateral cooperation in relevant fields,” said a spokesperson Dec. 21. In charging the two Chinese nationals with cybertheft, the U.S. “fabricated stories out of nothing and made unwarranted accusations against China on the cybersecurity issue,” she said. China “has been firmly opposing and cracking down on all forms of cyber espionage. The Chinese government has never participated in or supported others in stealing commercial secrets in any form.”
The U.S Trade Representative issued its first list of product exclusions from Section 301 tariffs on products from China, granting full or partial exemptions for 22 10-digit tariff subheadings, according to a pre-publication copy of a notice posted to the agency’s website Dec. 21. The product exclusions apply retroactively as of July 6, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
CBP issued the following releases on commercial trade and related matters:
Although PricewaterhouseCoopers expects trade will not return to normal with China for more than three years, experts on a Dec. 20 webcast said clients are mitigating increased tariffs through a variety of strategies, including lowering customs value, bonded warehouse use, modifying tariff codes and negotiating with suppliers or customers. "Probably 20 percent can be mitigated without making any changes to the supply chain," said Scott McCandless, a trade policy specialist for the firm.
CBP issued the following releases on commercial trade and related matters:
The World Trade Organization agreed to form a panel on whether Russian retaliation for U.S. steel and aluminum tariffs is illegal, at the Dec. 18 meeting of the Dispute Settlement Body. A Russian official said its delegation was bewildered to hear the U.S. say that Russia is undermining WTO rules "when it is the U.S. arbitrarily imposing additional duties on steel and aluminium and using them as a squeezer in order to allow the US, with different degrees of success, to get trade concessions from certain members," a summary of the meeting said. According to a Geneva trade official, there now have been five panels formed on retaliatory tariffs responding to the Section 232 tariffs. At the same meeting, the U.S. blocked a first request by China to form a panel to judge whether U.S. tariffs on Chinese goods under Section 301 are legal. Its delegation said that the two parties are in negotiations, and that's the right place to settle the conflict, not the WTO. The panel will automatically be authorized at next month's Dispute Settlement Body meeting. China said U.S. tariffs are damaging the global economy and damaging global industrial supply chains.
CBP created Harmonized System Update (HSU) 1820 on Dec. 18, containing 19,061 Automated Broker Interface records and 3,393 harmonized tariff records, it said in a CSMS message. The update includes changes related to the delayed increase of Section 301 tariffs on goods from China (see 1812180010), CBP said. Other changes "include the annual special program staged rate reductions mandated by the individual Free Trade Agreements," it said. "This update also contains modifications mandated by the 484 F Committee, the Committee for Statistical Annotation of Tariff Schedules. These adjustments are effective on January 1, 2019 and will be published within the change record, and chapters, of the 2019" Harmonized Tariff Schedule of the United States.
The Office of the U.S. Trade Representative's notice officially delaying a planned tariff increase on goods from China is set for publication in the Federal Register on Dec. 19. Publication is a necessary step for CBP to implement the delay in ACE (see 1812140046). The third tranche of Section 301 tariffs will now go up to 25 percent from 10 percent on March 2, 2019, unless further progress is made in talks with China (see 1812010001).
International Trade Today is providing readers with some of the top stories for Dec. 10-14 in case they were missed.
The three rounds of Section 301 tariffs since July on $250 billion worth of Chinese goods are costing the tech industry more than $1 billion a month in added fees, the Consumer Technology Association reported. CTA teamed with The Trade Partnership to analyze recent U.S. import data and found tariffs on tech products imported from China jumped to $1.3 billion in October, a sevenfold increase from the same month a year earlier. That includes $122 million more in duties on 5G-related imports in October, compared with $65,000.