Yesterday, our Beau Jackson, Robert Stang and Linda Tiller joined manufacturers, distributors and service providers in Kansas City for a discussion about the impact of tariffs on the business community. This insightful program included economic, industry and legal perspectives on current trade conditions and the various implications of recently-imposed tariffs. Pictured at right, Beau Jackson closed the event with these key takeaways:

  1. The United States is 80% a “consumer” economy – compared to a global average of approximately 40% (and 60% in Germany). Yet, U.S. trade policy seems to focus on raw materials and industrial manufacturing, rather than consumer-driven considerations.
  2. Finding qualified labor is a much more pressing and difficult issue for manufacturers than tariffs or trade policy
  3. Rising logistics and supply chain costs have become just as troublesome to companies as tariffs
  4. Carrier consolidation and new alliances in the shipping industry continue to adversely impact companies that import and export, and is complicating matters at U.S. ports of entry
  5. Tariff avoidance led to an import surge in late 2018, which furthered port congestion, inflated storage costs and has created large inventory surpluses that could soon have macroeconomic implications
  6. Supply Chain “Recalibration” – companies  and sourcing agents are trying to avoid China by finding new sources in Southeast Asia (particularly Vietnam and the Philippines)
  7. The recent government shutdown had a tangible impact on the day-to-day fundamentals of trade
  8. Good infrastructure, just like product quality and reputation, has been instrumental in fostering a robust U.S. economy.  Modernizing infrastructure is a must for the U.S. to remain competitive.

 

Husch Blackwell’s Jeffrey Neeley authored an article, “Solar Panel Tariff Creates New Uncertainty” that appeared in Law360 this week. The article discusses in depth the proclamation signed by President Trump last week. From the article:

[T]he relief announced provides that the first 2.5 gigawatts of imported cells are excluded from the additional tariffs. The use of an exemption for the first 2.5 gigawatts makes the relief a form of a “tariff rate quota,” meaning that tariffs for cells only apply if imports rise above the quota amount of 2.5 gigawatts. This type of relief has been imposed in the past, including on certain steel products.

Read the full post on Law360.

solar panels - energyOn January 22, 2018, the Office of the U.S. Trade Representative (“USTR”) announced that the Trump Administration is granting relief for the domestic solar panels and modules industry under section 201 of the Trade Act of 1974. This confirmed the fears of many consumers that there substantial additional duties would be imposed on those products. USTR announced that the relief would come in the form of a tariff increase of 30% in the first year, decreasing to 25% in year two, 20% in year three, and then to 15% in year four. On January 23, 2018, President Trump signed the Proclamation implementing the relief. The relief will go into effect on February 7, 2018. For additional information on the implications of this decision, you can read the full blog post on Husch Blackwell’s Emerging Energy Insights.