US sets new March 2 date for China tariff increases amid talks

The notice does not affect the 25 per cent tariff rate already in place on US$50 billion worth of Chinese technology items.
The notice does not affect the 25 per cent tariff rate already in place on US$50 billion worth of Chinese technology items.PHOTO: REUTERS

WASHINGTON (REUTERS) - The US Trade Representative's office on Friday (Dec 14) officially changed the scheduled date of a tariff rate increase on US$200 billion worth of Chinese goods to 12.01 am EST (1.01pm Singapore time) on March 2, 2019, as the United States and China pursue talks on trade and intellectual property.

The change was made in a Federal Register filing from a previously scheduled effective date of Jan 1, 2019, for the increase to 25 per cent from 10 per cent.

The notice does not affect the 25 per cent tariff rate already in place on US$50 billion worth of Chinese technology items, including semiconductors, printed circuit boards and other electronic components, machinery and vehicles.

The filing was added to documents associated with USTR's "Section 301" investigation into China's intellectual property practices, which has been the basis of US tariffs on Chinese goods that led to tit-for-tat retaliation from Beijing.

It attributed the change to new US-Chinese engagement "with the goal of obtaining the elimination of the acts, policies, and practices covered in the investigation" following a Dec 1 meeting between US President Donald Trump and Chinese President Xi Jinping in Buenos Aires.

The USTR statement did not specify any expected outcomes of the negotiation. It made reference to goals set forth in a statement issued by the White House to negotiate over a 90-day period structural changes by China on forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and theft, services and agriculture.

USTR's notice made no mention of China's steps this week to resume suspended purchases of US soybeans or suspend a punitive 25 per cent tariff on American-made vehicles and auto parts.

 

The official delay of the tariff rate increase was of little comfort to the US tech sector.

The Consumer Technology Association said on Friday that US tariffs on technology-related imports from China were now costing US$1 billion per month, with duties on fifth-generation mobile technology goods reaching US$122 million in October, compared with US$65,000 a year earlier.