[World Tax News] U.S. To Impose High Tariffs on Import of China-origin Goods and More

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  • Last Updated on 18 May, 2024

Import of China-origin Goods

Editorial Team – [2024] 162 taxmann.com 541 (Article)

World Tax News provides a weekly snippet of tax news from around the globe. Here is a glimpse of the tax happening in the world this week.

1. U.S. to impose high tariffs on import of China-Origin Goods

The U.S. Trade Representative (USTR) released the Four-Year Review of Actions Taken in the Section 301 Investigation report, which examines the four-year review of China-related tariffs under Section 301 of the Trade Act 1974.

According to the Trade Act, the USTR must conduct a review every four years to evaluate the effectiveness of the Section 301 tariff actions in meeting the investigation’s objectives, consider alternative actions that could be taken, and assess the overall impact of the tariff actions on the U.S. economy.

The report draws the following conclusions:

(a) It recommends that products already subject to Section 301 tariffs should continue to bear those duties.

(b) It proposes new or increased tariffs on products in certain strategic sectors, including electric vehicles, lithium batteries, semiconductors, critical minerals, and steel and aluminium, although the effective dates for these tariff changes have not yet been announced.

(c) It describes an exclusion process for certain domestic manufacturing machinery in Chapters 84 and 85 of the HTSUS and 19 temporary exclusions for specific solar manufacturing equipment.

(d) Further details and a request for comments are expected to be published in a Federal Register notice next week.

The following modifications are proposed in the report:

Battery parts (non-lithium-ion batteries) Increase rate to 25% in 2024
Electric vehicles Increase rate to 100% in 2024
Facemasks Increase rate to 25% in 2024
Lithium-ion electrical vehicle batteries Increase rate to 25% in 2024
Lithium-ion non-electrical vehicle batteries Increase rate to 25% in 2026
Medical gloves Increase rate to 25% in 2026
Natural graphite Increase rate to 25% in 2026
Other critical minerals Increase rate to 25% in 2024
Permanent magnets Increase rate to 25% in 2026
Semiconductors Increase rate to 50% in 2025
Ship-to-shore cranes Increase rate to 25% in 2024
Solar cells (whether or not assembled into modules) Increase rate to 50% in 2024
Steel and aluminum products Increase rate to 25% in 2024
Syringes and needles Increase rate to 50% in 2024


Press Release by U.S. Trade Representative

USTR Report on 4-year review of Section 301

2. Australia announces hydrogen production and critical minerals tax incentives

On 14 May 2024, as part of the 2024–25 Budget, the Australian Government announced changes to accelerate investment in Future Made in Australia priority industries.

(a) Hydrogen Production Tax Incentive:

The Government will establish a temporary Hydrogen Production Tax Incentive to incentivise renewable hydrogen production for eligible Australian resident corporations with a time-limited and uncapped refundable tax offset.

It will be available for hydrogen production for a maximum of 10 years, between 1 July 2027 and 30 June 2040, for projects that reach final investment decisions by 2030.

(b) Critical Minerals Production Tax Incentive

From 1 July 2027, the Government will establish a temporary Critical Minerals Production Tax Incentive.

The incentive will provide eligible recipients with a refundable tax offset of 10% for the costs of processing the 31 critical minerals currently listed in Australia. The credit will be available for a maximum of 10 years between 1 July 2027 and 30 June 2040. Eligible processing costs will be discussed in consultation.

Source: Budget Measures 2024-25

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