The fourth tranche of Section 301 tariffs on Chinese goods that the Trump administration split into two subgroups, lists 4A and 4B, includes many very similar items that will require specificity for differentiating among them, blogged the Atlanta International Forwarders and Customs Brokers Association. Tariffs of 15 percent tariffs on the 4A goods took effect Sept. 1, and 15 percent duties on 4B items start Dec. 15. President Donald Trump said the 4B duties were deferred so they wouldn't hurt holiday shopping (see 1908130028). "Importers should pay special attention to material construction and product descriptions, now more than ever," said the association. "The two lists, in many cases, only differ after the 8th digit level of the Tariff number," which is based on material construction or specific uses, it said. "Projectors capable of directly connecting to and designed for use with an automatic data processing machine are on list 4A, unless they are color video projectors with a flat panel screen incorporating a VCR or player," said the trade group. "LED light bulbs and Christmas light bulbs escape higher tariffs until December while filament lamps are on List 4A."

The U.S.-Mexico-Canada Agreement on free trade “is critical to our economic future and congressional approval will promote America’s global digital leadership,” wrote CTA, the Information Technology Industry Council, Semiconductor Industry Association and eight other tech groups Monday, urging its ratification. “Internet-connected small businesses are three times as likely to export and create jobs, grow four times more quickly, and earn twice as much revenue per employee,” they said. “Their success is thanks to America’s digital policy framework, and USMCA will modernize North American trade rules to better reflect that framework.” Passing the USMCA “would be a significant step” toward guaranteeing North American leadership in the global digital economy and establishing a “worldwide framework to address the challenges confronting global access and usage of digital trade,” they said. Also signing were ACT|The App Association, BSA|The Software Alliance, the Computer & Communications Industry Association, CompTIA, Internet Association, Internet Infrastructure Coalition, Software & Information Industry Association and TechNet.

China’s top trade negotiators spoke by phone Thursday with their U.S. counterparts and agreed to convene the next round of trade talks, their 13th, in early October in Washington, reported China’s state-run Xinhua News Agency. The talks originally were to take place early this month, but rising trade tensions delayed them. The two sides agreed to “maintain close communication” and will convene lower-level “serious consultations in mid-September to fully prepare for the substantive progress of the high-level consultations,” said the agency. “The two sides agreed that they should work together and take practical actions to create favorable conditions for consultations.” The Office of the U.S. Trade Representative didn’t comment.

Walmart Chief Merchandising Officer Steve Bratspies is “really proud” of how his team mitigated the cost impact of the Lists 1, 2 and 3 Section 301 tariffs on Chinese goods, he told a Barclays investor conference Wednesday. List 4, which covers virtually all Chinese-sourced goods not previously tariffed, “makes it tougher” to manage, “there's no doubt about that,” said Bratspies. With the previous three tariff rounds, “there were a few prices” that Walmart had to raise, “but we didn't see any change in our unit projection of where we thought it would be, so that was absorbed,” he said. “We were very focused and targeted on how we did it. We didn't let any of our price gaps slip and we maintained price leadership.” Though List 4 “gets tougher” to do that, Walmart plans “the same approach that we took to List 3, which is we literally go through item by item,” said Bratspies. “That's what our buyers do.” There's “a whole bunch of different levers that a buyer can pull to understand how to manage that,” he said. The goal is to “offset as much as we possibly can either through negotiation" with vendors or by "managing mix,” he said. Even if the company needs to raise prices as a “last resort” to maintain margins, “we're going to run the Walmart model, which is we want to lead on price,” he said. The retailer slightly scaled back full-year expectations on consolidated net sales growth last month, factoring in the impact of the List 4 tariffs when they were still at 10 percent (see 1908150005).

A Bureau of Industry and Security official acknowledged delay in BIS' proposed rulemaking for foundational technologies, saying she and other top Commerce Department officials expected the notice to have been published by now. “I personally thought foundational would be out faster than it is. It was not just higher-level people,” said Hillary Hess, BIS regulatory policy division director, at a Tuesday panel hosted by the American Bar Association. Hess and another official said in June the notice would be released soon (see 1907110044). Hess declined to give an updated timetable now. She briefly said of the proposal for emerging technologies that Commerce has been meeting with “a number of companies” to understand what emerging technologies are most important for U.S. industry and which technologies they’re interested in pursuing. Hess said Commerce created “technical teams” of engineers to tackle emerging tech categories. “They’re basically doing evaluations to look at what should be proposed for control and … what shouldn’t be,” Hess said. It’s possible the teams won’t see a need for new controls, she said. If Commerce issues controls on emerging technologies, Hess suggested the agency wants to do it soon: “We would like to get some stuff out the door.”

Escalation in the U.S.-China trade war will continue "until both sides feel enough economic, market and/or political pain to strike a deal," said Bank of America Merrill Lynch global economists Ethan Harris and Aditya Bhave in a research report Tuesday. "The recent escalation has opened an almost insurmountable gap in terms of numbers and trust," said the economists. "The only real question is whether the Trump Administration takes the politically dangerous step of imposing tariffs on headline consumer products in December," as it's scheduled to do mid-month, they said. "We think they give it a go: given the supply chain lags it will mainly impact consumer prices after the holidays. All told we expect US tariffs against China to increase from about $63bn in August to more than $115bn by yearend, with Chinese tariffs on US products rising from $20bn to $25bn." Closer to the 2020 election, "we expect a prolonged pause in the US-China trade war, with continued tough rhetoric and behind-the-scenes action by the US Commerce Department, but no major new tariffs," Smith and Bhave said. BofA ML estimates Amazon would need to hike prices an average of 2.1 percent on its first-party goods to "offset the impact" of the 15 percent List 4 tariffs, said analysts Justin Post and Michael McGovern in a separate report. Should List 4 tariffs rise to 25 percent, Amazon would need to raise prices 3.5 percent in its first-party marketplace, they said.

EchoStar asked to end its appeal to the U.S. Court of International Trade upholding Customs and Border Protection denial of about a quarter million dollars of claims regarding a video technology importer/exporter. The CIT ruled in June (see 1906180069). The company sought voluntary dismissal, in docket 19-2299 for EchoStar v. U.S. in the U.S. Court of Appeals for the Federal Circuit on Tuesday. EchoStar said (in Pacer) the government consented.

EchoStar appealed the U.S. Court of International Trade decision upholding denial by Customs and Border Protection of more than $276,000 in drawback claims from a video technology importer and exporter as untimely. The CIT said in June (see 1906180069) the date of filing was when a complete paper claim was submitted, not the electronic summary. The appellant/petitioner's brief is due Oct. 21, said docket 19-2299 for EchoStar v. U.S. in the U.S. Court of Appeals for the Federal Circuit. As of Friday, beyond a docketing notice (in Pacer), no additional documents were in that docket (in Pacer).

Movado Group downgraded its forecast Wednesday in virtually all financial metrics for fiscal 2020 ending Jan. 31, blaming market volatility it sees worsening with the 15 percent List 4A Section 301 tariffs taking effect Sunday on fashion watches and smartwatches imported from China. Movado also faces “currency headwinds” from sharp fluctuations in the euro and the British pound, said Chief Financial Officer Sallie DeMarsilis on a fiscal Q2 call. It now expects sales for the year to be $725 million-$740 million, down from $750 million-$765 million in its May 30 forecast, she said. Gross margin will be flat to “slightly down” from last year, compared with flat to “slightly improved” in the previous forecast, she said. It projects operating income of $67 million-$70 million compared with $82 million-$85 million in the previous guidance, she said. The outlook “assumes no further changes in prevailing tariff rates,” she said. Shares closed 0.2 percent lower Thursday at $21.17. It's “very early on in the process” to forecast with any precision the impact of the List 4A tariffs taking effect in a few days, said CEO Efraim Grinberg. The tariffs will “definitely have an impact, I believe, on U.S. business,” he said. “We will take certain actions in terms of pricing initiatives, in terms of working with our suppliers,” to mitigate the fallout, he said. “Some will have an effect to gross profits.” Due for fall introduction is the new Movado Connect 2.0 powered by Google's OS Wear, said Grinberg. It’s “our first smartwatch available in two sizes for men and women,” he said.

Protests in Hong Kong could cut off an escape route U.S. importers have been using to avoid the Section 301 tariffs on Chinese goods, blogged trade consultant David Trumbull Wednesday. The 1992 Hong Kong Policy Act “gives Congress and the President, or the President alone by Executive Order, the power to suspend U.S. recognition of the separate Hong Kong Customs Territory if the U.S. determines that Mainland China has suppressed Hong Kong's autonomy,” Trumbull said. “The current tension in Hong Kong, with protesters saying that China is attempting to do just that[,] could trigger President Trump to invoke the Hong Kong Policy Act and subject goods of Hong Kong origin to the Section 301 tariffs,” he said. “Companies relocating production from Mainland China to Hong Kong to avoid the Section 301 tariffs on China are getting the jitters” over concerns the U.S. could use the law to end Hong Kong’s status as a separate customs territory from China, he said.