US Tariffs on Chinese Tea to be Reduced
The new year is bringing some good news for Chinese tea importers in the United States. In December, the US and China reached an agreement on a Phase One trade deal. The Phase One trade deal requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange. The agreement also includes a commitment by China that it will make substantial additional purchases of US goods and services in the coming years. Pursuant to the resolution, the US has agreed to significantly modify its Section 301 tariff actions.
The United States first imposed tariffs on imports from China based on the findings of the Section 301 investigation on China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. The announcement in December stated that the US will be maintaining 25% tariffs on approximately USD $250 billion of Chinese imports, along with 7.5% tariffs on approximately $120 billion of Chinese imports. The President stated that the US agreed to reduce the tariff on List 4A goods from 15% to 7.5% upon signing of the agreement — tea is included in the List 4A goods.
Peter F Goggi, president of the Tea Association of the USA, has been actively lobbying against the tariffs on behalf of the Association’s members. He submitted a position paper, provided oral testimony and rebuttal during the 301 Committee hearings (which took place last summer). Goggi sent a letter to members yesterday informing them that the agreement was signed 15 January 2020. In his letter to members, Goggi noted that the tea products listed on Annex A that will be reduced to 7.5% tariff are as follows:
Goggi added that although the anticipated effective date is approximately 30 days from the signing (around mid-February), no date has yet to be confirmed. Once the effective date of the tariff reduction is announced, the Tea Association will inform all members.
T&CTJ is keeping tabs on the situation and will also inform our subscribers and readers of any developments.
– Vanessa L Facenda, editor Tea & Coffee Trade Journal. Vanessa may be contacted via [email protected].
(Image credit – Barbara Dufrêne)