On 15 June 2018, the President of the United States (US) announced that the US will move forward and implement a 25% tariff on US$34 billion of goods from China that contain industrially significant technologies.
The proposed list of April 3 has been updated to the latest list as of June 15.
The deadline for submitting comments for the latest set of proposed items is 20 July 2018, while the deadline for filing requests to appear at the public hearing is 29 June 2018.
EY’s Global Tax Alert includes details on this latest listing, and also provides the following Best Practices on this topic:
- Mapping the complete, end-to-end supply chain to fully understand the extent of products impacted, potential costs, alternative sourcing options, and to assess any opportunities to mitigate impact.
- Identifying strategies to defer, eliminate, or recover the excess duties such as bonded warehouses, Foreign Trade Zones, or substitution drawback and their equivalent under China customs regulations.
- Exploring strategies to minimize the customs value of imported products subject to the additional duties, re-evaluating current transfer pricing approaches, and for US imports, considering US customs strategies, such as First Sale for Export.
As this this latest round of tariff battles ensue, transfer pricing and other aspects of international tax are directly and indirectly impacted. Thus, it is imperative to monitor the latest developments while developing possible plans of action.