President Trump yesterday sent out two tweets about tariffs on products made in China.
- “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….”
Many importers are concerned about the last portion of the tweet. It is referring to products subject to Trump’s Section 301 Third List tariffs. The tariff for these products were initially scheduled to rise from 10% to 25% at the beginning of the year, but were postponed indefinitely. If Trump follows through, the Third List tariffs would increase from 10% to 25% at the end of this week with very little notice to importers.
- “…of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”
There currently are a number of products still not affected by Trump’s first three Section 301 tariffs. These products includes items such as textiles, apparel, footwear, and toys. This second tweet threatens to impose 25% tariffs on some (or possibly all) of these products. We have not received any news indicating whether the 25% tariff will affect ALL remaining products heretofore unaffected by the previous tariffs. We are waiting for details.
There is a lot of debate about how seriously the importing community should take Trump’s tweets. Just last week, there was optimism that China and the United States were closing in on a trade deal that could potentially end some of the tariffs. Are Trump’s tweets simply negotiating tactics? There is a lot of uncertainty here. We are waiting for clarification and will notify importers as soon as we have updated information. In the meantime, importers, especially those affected by the third China Section 301 tariff, should brace themselves for the worst.