Global Marketing News

I. Food processing and packaging equipment from China on USTR’s Section 301 list.  USTR is requesting comments. 

Scope of equipment/machinery on the list:  Our team has reviewed USTR’s Section 301 tariff list of 1,300 tariff lines against US data on imports from China.  It appears that nearly all tariff lines associated with food processing and packaging equipment are included on USTR’s list.

Impact to PMMI members:  US MFN (non-preferential) rates are very low:  most are MFN duty-free, others not more than 2.8%.  In 2017, imports from China were subject to 1.3 M USD in tariff costs on 346.8 M USD in imported value.  If USTR were to apply the proposed 25% tariff on the full list of food processing and packaging equipment/machinery from China, US importers will face tariff costs as high as 86.7 M USD.

USTR requesting comments:  Should you decide to comment, USTR is requesting input from interested stakeholders by 11 May.  USTR will also hold a hearing on 15 May.  Requests to appear due 23 April.  Post-hearing rebuttals due 22 May.

• USTR’s press release 3 April 2018
• USTR’s FRN and list of 1,300 tariff lines totaling $50M USD products proposed for 25% additional tariff 3 April 2018

Specifically, USTR is requesting comments with respect to any aspect of the proposed action, including:

• Specific products to be subject to increased duties, including whether products listed in the Annex should be retained or removed, or whether products not currently on the list should be added.
• Level of the increase, if any, in the rate of duty.
• Appropriate aggregate level of trade to be covered by additional duties

In commenting on the inclusion or removal of particular products on the list of products subject to the proposed additional duties, USTR requests that commenters 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
• maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.

Timing:  At this stage, it is not clear when (or if) USTR will impose the tariffs.  If USTR does move forward, we expect it would be after the comment periods close and USTR has had time to review stakeholder input, so possibly early June at the earliest.  This will also allow time for US and China to explore possible ways to avoid imposition of duties by addressing IP related concerns the United States has raised with China.

II. In return, China published its retaliation list against US goods. 

In response to the US action, China immediately published its list of 106 tariff lines from the United States that it will retaliate against in kind.  We have reviewed the list, and have found none packaging and processing machinery categories are targeted for the 25% additional tariff into China.  That is good news! 

If you have any questions, please reach out to Paige Jarvi, global marketing coordinator, at [email protected]