301 Tariffs – The Chinese bearing industry receives hefty exclusions

 

The Chinese bearing industry is now much less affected by the 301 tariffs, thanks to new potentially productive discussions taking place between China and the US. A new document detailing the latest exclusions has been posted in the Federal Register: September 20, 2019 84 FR 49564. There are now a total of 310 exclusions, 17 of which are bearing related and account for approximately 35% of the value of US bearing imports from China.

The details of the exclusions will be shared during the Bearing Conference at PTC ASIA on 25 October at 10.30 in Hall E5, by Dave Hull. 

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In May of 2018, I traveled to Washington D.C. to testify before the United States Trade Commission regarding the upcoming 301 tariffs. Using my 40 years of experience in the global bearing industry, I along with others insisted that putting tariffs on bearings from China was a bad idea. Flash forward to present day, and many exemptions have been granted for more than two thirds of the total dollar value of bearings imported from China.

Of the 4 product lists susceptible to the 301 tariffs, bearings are on list 1, which went into effect on July 6th of 2018. Since that time, product exclusions have been granted for what appears to be entire categories of bearings. The first bearing exclusions were granted for a large group of ball bearings with size and dollar value limitations, and subsequently there have been several smaller groupings that have also been granted exclusions. By my calculation, with this latest list of exclusions, over $450 million annually has been excluded from a total of $665 million for the HTS codes starting with 8482, ball and roller bearings.

The manner by which these groupings of parts were exempted is interesting to say the least. Not only have far more exemptions been granted than originally anticipated, but also the details involved in the subcategories are rather unexpected.

A new document detailing the latest exclusions has been posted in the Federal Register: September 20, 2019 84 FR 49564. There are now a total of 310 exclusions, 17 of which are bearing related and account for approximately 35% of the value of US bearing imports from China. This figure combined with past figures, more than two thirds (68%) of the total dollar value of bearings imports from China are now excluded from the 301 Tariffs. The notables are tapered roller bearings, angular contact ball bearings, double row ball bearings, spherical roller bearings, unground ball bearings, and ball thrust bearings.

The latest wave of bearing exemptions differs greatly from previous groupings. For example, exclusions granted in December of 2018 spanned only 3 HTS codes and were all-inclusive for single row radial ball bearings with an outside diameter of 9mm-100mm. This latest group of exclusions spans approximately 11 HTS codes and the inclusiveness ranges from entire groupings to single bearings. Parts that were not all inclusive to a particular category were based on an outside diameter, import value, or both. Overall, the dollar value has been dominated by tapered roller bearings, accounting for about one third of the latest exclusions.

Regardless of the manner by which certain products and product groupings were exempted, it is safe to say that the bearing industry is now much less affected by the 301 tariffs. With new potentially productive discussions taking place between China and the US, I am hopeful that the bearing industry will be alleviated from tariffs altogether. As everything is still uncertain, companies must take advantage of the 301 exclusions by filing special HTS codes designated for each group of product exclusions. Instructions can be found in the Federal Register.

Author: David W Hull, P.E., founder and President of Precision Components, Inc. 42 years’ experience in the bearing industry, and 25 years’ direct experience in the US-China trade of bearings. He was closely involved in the anti-dumping suit filed by the US against China. He was interviewed and quoted multiple times by the central television channel in China, CCTV, on his opinions on the 301 Tariffs and its impacts on both economies. He follows the US trade policies closely and is often hired as consultant by governments and companies for his expertise.