Business Tax Hike Rumors Swirl

Talk of a “Millionaire’s Tax” being included in the upcoming budget bill have been circulating around D.C.  over the last few weeks with reports that a new rate of 40% for people earning more than $1 million a year is being considered. Such an increase would be a hit for small businesses structured as S-Corps.  Reports have been spurred on by offhand comments by some Republicans, including the President, that “everything is on the table.”  However, House and Senate leaders, including House Ways and Means Chair Jason Smith (R-MO) and House Speaker Johnson have pushed back on this idea downplaying the potential of the idea making it into the final bill. President Trump also seemed to reject the concept this morning noting that such an act would drive those earning over a million out of the country.  The Hardwood Federation will oppose any such proposal and will include this talking point in the upcoming Fly-In talking points.

USTR Announces Action Against Chinese Built Ships

On April 17^th, the U.S. Trade Representative (USTR) announced final action on Chinese-built ships and owners and operators, along with other proposed actions to “combat unfair Chinese trade practices” related to global shipping.  The action will be implemented in two phases.

The first phase includes a 180-day grace period in which no fees will be charged.  Moving forward, fees will be applied to Chinese vessel owners and operators base on net tonnage per U.S. voyage starting at $50 per net ton, increasing annually by $30 increments until being capped at $140 per net ton in 2028.  Fees are capped at five assessments per year and are applied only at the first point of entry to the U.S. Non-Chinese operators using Chinese-built vessels will face fees at a lower rate – $18 per net ton or $120 per discharged container, rising incrementally until 2028, maxing out at $33 per net ton or $250 per container.  The second phase focuses on U.S. LNG exports.

Mixed Messaging on Global Tariffs

The Trump Administration sent mixed messages on the future of the escalated tariff levels on Chinese products specifically and reciprocal tariffs on all other countries in general.  Treasury Secretary Scott Bessent indicated that the U.S. is open to reducing tariffs on China, provided both nations agree to de-escalate trade tensions. He emphasized that unilateral tariff cuts are off the table, and any adjustments would require reciprocal actions from Beijing. This morning China disputed the notion that China and the U.S. were even engaged in discussions and that the U.S. needs to revoke tariffs to show a serious desire for talks.  Further complicating the issue was a statement from the President indicating that reciprocal tariffs could come back in 2-3 weeks.  The Hardwood Federation continues to track the ever evolving landscape of the Trump trade policy.