U.S.-China Tariff Increase Updates

U.S.-China Tariff Increase Updates

The Office of the United States Trade Representative (USTR) formally published a notice in the Federal Register on May 10th of an increase in tariffs from 10% to 25% on all List 3 products being imported from China. The 10% Tariff remains in effect until June 1st for products that were shipped prior to Friday, May 10th, 2019. With a total import value of over $200 billion, List 3 products are composed of cosmetics as well as other inputs, making up approximately one-third of product imports from China.

List 1 products, which include medical devices and other inputs with a total import value of $34 billion were subject to a tariff increase to 25% as of July 6, 2018. List 2 products, consisting of $16 billion of chemical compounds, industrial apparatus, and other inputs had a 25% tariff imposed as of August 23rd, 2018. There is also a Proposed List 4 that encompasses $325 billion of products not already subject to the additional tariffs and may or may not include additional cosmetic or personal care products. Whether or not these products will also become subject to the 25% tariffs is still to be determined.

On May 5th, 2019, President Trump tweeted: “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 of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%…”

The Trump administration’s decision to increase tariffs on $200 billion worth of Chinese products posed a threat for China to retaliate. China announced it will raise tariffs from 5% to 25% on $60 billion in U.S. goods. The increased tariffs will come into effect on June 1st, 2019, and cosmetic products are included on the list.

For more information, please contact Focal Point Research Inc.  We are leading North American Regulatory and New Product Consultants for Medical DevicesNatural Health ProductsOTC DrugsCosmetics, and other consumer products regulated by Health Canada and the U.S. FDA.