Global Fastener News

China Trade Truce Freezes U.S. Fastener Tariffs Until 2020

China Trade Truce Freezes U.S. Fastener Tariffs Until 2020
January 15
17:31 2020

The U.S. and China formally signed the first phase of a trade agreement intended to ease trade tensions between the world’s two largest economies.

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In exchange for a halt to tariff hikes, China agreed to purchase an additional $200 billion in U.S. goods over the next two years, CNBC reports. The additional purchases reportedly will come on top of the 2017 U.S. export numbers.

Fasteners are not on the list of goods China promised to purchase, leaving the fastener industry to deal with 25% tariffs on bolts, screws and other fasteners (HTS subheadings 7318.11.00 to 7318.29.00) manufactured in China, as well as 15% tariffs on all Chinese iron and steel nuts (HTS subheading 7318.16.00) until at least the end of the year.

President Donald Trump said he opposed any tariff cuts until a more comprehensive “phase two” agreement is reached with China, a deal he indicated would not occur until after the U.S. election in November 2020. He has said he plans to travel to Beijing for further negotiations at an unspecified later date.

The trade deal is perceived as “fragile,” with some analysts still seeing more tariffs as a possibility, according to CNBC.

“The phase one trade deal strikes an uneasy truce between the U.S. and China, but even with the reprieve, analysts see more tensions between the U.S. and its trading partners,” writes Patti Domm of CNBC.

Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers led to job losses and higher prices, according to a Federal Reserve study published in December.

“We find that the 2018 tariffs are associated with relative reductions in manufacturing employment and relative increases in producer prices,” concluded Fed economists Aaron Flaaen and Justin Pierce.

American businesses and consumers are bearing the financial brunt of President Trump’s trade war.

“U.S. tariffs continue to be almost entirely borne by U.S. firms and consumers,” stated Mary Amiti, an economist at the Federal Reserve Bank of New York.

U.S. Federal Reserve research (and other economists) shows that U.S. tariffs on Chinese industrial components and materials — which largely won’t be lifted by the new deal that was signed in January — are “proving especially damaging to American manufacturing competitiveness and jobs” Reuters reports.

In mid 2019, Brighton-Best International president Jun Xu told GlobalFastenerNews.com that his company took a “hybrid” approach to address tariffs.

“We’ve had to increase our prices to compensate for the added cost of tariffs, and we’ve been looking to diversify our countries of origin,” Xu stated.

Ohio-based Stelfast president Don Haggerty told GlobalFastenerNews.com that his company also raised prices.

On September 1, the U.S. imposed 15% levies on another $300 billion worth of Chinese imports, including all iron and steel nuts (HTS subheading 7318.16.00) imported from China.

Trump’s original 10% duty on fasteners from China was applied September 24, 2018. The duty was increased to 25% in May.

The Office of the U.S. Trade Representative (USTR) announced a tariff exclusion request process for Section 301 tariffs in July.

The Office of the U.S. Trade Representative (USTR) list includes:
7318.11.00 – Iron or steel, coach screws
7318.12.00 – Iron or steel, wood screws (o/than coach screws)
7318.13.00 – Iron or steel, screw hooks and screw rings
7318.14.10 – Iron or steel, self-tapping screws, w/shanks or threads less than 6 mm in diameter
7318.14.50 – Iron or steel, self-tapping screws, w/shanks or threads 6 mm or more in diameter
7318.15.20 – Iron or steel, bolts and bolts & their nuts or washers, imported in the same shipment
7318.15.40 – Iron or steel, machine screws (o/than cap screws), 9.5 mm or more in length and 3.2 mm in diameter
7318.15.50 – Iron or steel, threaded studs
7318.15.60 – Iron or steel, screws and bolts, nesoi, having shanks or threads less than 6 mm in diameter
7318.15.80 – Iron or steel, screws and bolts, nesoi, having shanks or threads 6 mm or more in diameter
7318.19.00 – Iron or steel, threaded articles similar to screws, bolts, nuts, coach screws & screw hooks, nesoi
7318.21.00 – Iron or steel, spring washers and other lock washers
7318.22.00 – Iron or steel, washers (o/than spring washers and other lock washers)
7318.23.00 – Iron or steel, rivets
7318.24.00 – Iron or steel, cotters and cotter pins
7318.29.00 – Iron or steel, nonthreaded articles similar to rivets, cotters, cotter pins, washers and spring washers

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