New trade developments with Thailand and China

Travel goods remain duty free, OIA webinar on List 4a exclusion process

November 6, 2019

The “Year of Trade” continued in Washington last week with a big win for outdoor companies who make travel goods in Thailand and a few new developments in the U.S.-China trade war.

Preserving Duty-Free Status for Travel Goods From Thailand

Last week, OIA helped secured a major victory for outdoor companies when the USTR announced that the United States would preserve duty-free market access for backpacks, sports bags and other travel goods under the Generalized System of Preferences (GSP), the main trade preference program for developing countries.

The announcement followed the completion of the administration’s review of Thailand’s participation in the program. Overall, the administration decided to suspend GSP benefits for about a third of eligible products beginning on April 25, 2020, due to concerns about protections for workers in that country.

During the review in July, OIA sent a letter to U.S. Trade Representative Robert Lighthizer urging the administration to preserve duty-free market access for travel goods sourced from Thailand as well as Indonesia, another GSP beneficiary country. OIA played a lead role in passing legislation that made travel goods eligible for inclusion in GSP and secured the final decision by President Trump to make travel goods duty free from all GSP-eligible countries. When it appeared that travel goods sourced from Thailand were in danger of losing duty-free benefits, OIA made the case that preserving duty-free status was critical to helping outdoor companies diversify supply chains out of China, lower costs, create new jobs and develop innovative new products. We are thrilled the administration agreed!

This is a big win for outdoor companies, and we look forward to a similar result when the administration completes its review of Indonesia’s status in GSP.

China List 4a Exclusion Process

Last Thursday, Oct. 31, the Office of the U.S. Trade Representative (USTR) launched a formal process for companies to file petitions to exclude products sourced from China – including outdoor apparel, footwear, equipment and sporting goods – from the 15 percent punitive tariff that went into effect on Sept. 1 (List 4a).

Stakeholders may file petitions at through Jan. 31, 2020. If successful, companies will receive a refund on punitive duties paid to date and have their product exempt from the punitive tariff for one year.

At this time, the process will not cover products that will face an additional 15 percent tariff on Dec. 15, 2019 (List 4b). That tariff is subject to ongoing negotiations between the United States and China; an exclusion process on that list of products will be announced at a later date. In addition, it will not cover $200 billion worth of products subject to a 25 percent punitive tariff (List 3); the exclusion process for those products closed on Sept. 30, 2019.

Webinar: Protect your bottom line: Understanding the latest China tariff exclusion process