After what seemed like a relatively calm few weeks in International Trade (relatively speaking), the winds have suddenly picked up, catching many off guard this morning and wondering if we were simply in the eye of the storm all this time. So, what happened?
1. It started with a bang (or a tweet): President Trump sent out a tweet that products in the 3rd list of tariffs (known as the 301 tariffs) against China that were implemented on September 24th of 2018, worth approximately $200 Billion, would rise from an additional 10%, to an additional 25% over their standard duty rates on Friday, May 10th.
2. President Trump also made mention of an additional tariff on the remaining $325 Billion worth of Chinese goods that are currently not subject to an additional trade remedy tariff.
3. While all this goes on, Chinese negotiators are scheduled to arrive in Washington this week for what many believe to be the final round of talks to produce a trade agreement.
As a reminder, duty is based on three basic components; the HTS Tariff Classification, the Entered Value, and the Country of Origin.
When the new tariffs came out, many companies took a good hard look at these three components to ensure what they were entering with Customs was accurate, as well as looking at ways to mitigate their exposure.
Looking at programs like Duty Drawback or changing sourcing patterns are options for some, but supply chains are "sticky" and typically struggle to adapt to very fast changes.
For now, keep your eyes out for changing weather. It could get choppy out quick, or all blow over.