As has been widely reported, on Friday, first President Trump announced and then USTR Lighthizer confirmed the 301 tariffs on goods out of China will increase. Specifically, the tariffs on the goods on Lists 1, 2 and 3 will rise from 25% to 30% starting October 1, 2019, while the tariffs on the List 4 products will start at 15% on September 1, 2019 or December 15, 2019, rather than the original 10%, depending on whether your product is on List 4A or List 4B. USTR also acknowledged there will be a notice and comment period provided in the Federal Register notice to follow. While no doubt many American traders hope the possibility exists to remove products from any of the lists, that seems highly unlikely. While this upheaval continues, companies should also keep in mind the ability to seek exclusions for goods on List 3 expires on September 30, 2019. The exclusion process for goods on List 4 has still not been published. (more…)
As has been repeatedly mentioned in the general press, President Trump tweeted on August 1st that the U.S. “will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country.” There are lots of questions about what that short message actually means, and right now, no answers. So far, there is no official notice from the U.S. Trade Representative (USTR) for publication in the Federal Register. There is nothing new posted on the USTR website. We know the President said he picked September 1st because there are goods on the water, but we do not know whether September 1st is the date by which the goods must arrive in the U.S., or must be exported from China. Will the products on List 4 change from those originally published? Whatever goods are on the final version of List 4, will at least some of the products be listed to the 10-digit level? Right now, all products are listed to the eight-digit level, but the descriptions assigned to those classifications, in some cases, do not include all the products encompassed by the very different products classified under that eight-digit number. This is typically the case due to either the type of good or its constituent material. (more…)
In the June 20, 2019 pre-publication edition of the Federal Register, the U.S. Trade Representative announced the long awaited process for seeking exclusions for goods on List 3, the one which recently went from 10% to 25%. While the exclusion process itself generally mirrors the process applied to those goods on Lists 1 and 2, there are a few differences, but let’s start at the beginning.
Any exclusion request for List 3 goods must be filed between June 30 and September 30, 2019. The request must be filed through the portal: http://exclusions.ustr.gov (active beginning June 30, 2019). One new wrinkle is parties must register in the portal before filing. (more…)
Putting all the hyperbole and posturing to one side, the recent agreement between Mexico and the U.S. which averted the tariffs can be found in the U.S. – Mexico Joint Statement released June 7, 2019. It consists of a few broad policy statements:
- Mexico will deploy its National Guard throughout Mexico, giving priority to its southern border – meaning the border with Guatemala;
- Mexico will take “decisive” action to dismantle human smuggling and trafficking organizations and their illicit financial and transportation networks;
- The U.S. and Mexico will strengthen bilateral cooperation, including information sharing and coordinated actions to better “protect” and “secure” their common border;
- The U.S. will immediately expand the existing Migrant Protection Protocols so that those crossing into the U.S. to seek asylum will be “rapidly” returned to Mexico where they “may” await adjudication of their asylum claims;
- Mexico agrees to “authorize” the entrance of those individuals for humanitarian reasons, in compliance with its international obligations, while they await adjudication of their claims;
- Mexico will offer jobs, healthcare and education to those individuals according to its principles; and
- The U.S. commits to “work to accelerate” the adjudication of asylum claims and “conclude removal proceedings as expeditiously as possible.”
Agriculture Secretary Perdue recently stated the trade damages to be addressed in a new round of farm aid is $15 to $20 billion! The general press is replete with stories about how, as these tariffs continue, companies are making sourcing changes that will be hard to reverse. So, what is the latest news?
First, there is trade with China. It seems clear that unless there is a breakthrough at the G-20 meeting in Tokyo, or shortly thereafter, the anecdotal headaches we hear about will get far more costly. The American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai conducted a survey before List 3 was announced. Even at that point, American companies operating in China acknowledged higher production costs, decreased demand for products, reduced staffing, reduced profits, increased inspections at importation, increased bureaucratic oversight and regulatory scrutiny, slower approval of licenses and permits, higher product rejections, and increasing plans to relocate (but not back to the U.S.). (more…)
The last few days have seen some startling developments regarding trade between the U.S. and China. Perhaps none of this is remarkable given the current climate, but trying to keep track has caused untold whiplash!
On May 10, we learned from USTR the timing of the 25% tariff on List 3 was changed. It is now applicable to goods entered on or after June 1, 2019. Given that CBP originally programmed its computer and the 25% on List 3 goods applied so long as the arrival date was May 10 or later, if you get caught in the payment timing cycle of having to pay the 25%, you will want to coordinate with your customs broker to file a Post Summary Correction and seek a 15% refund. (more…)
In yesterday’s “Talking Trade” Periscope broadcast, we made the point that the wording in the China 301 tariff notice left confusion which needed to be cleared up, and now, it has been. As is common knowledge, the 10% tariff on the goods on List 3 or Traunch 3 went up to 25% at 12:01 a.m. on May 10, 2019. How this applies is, however, a bit more nuanced. The Federal Register Notice reads: “Effective with respect to goods (i) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, and (ii) exported to the United States on or after May 10, 2019…” (more…)
In March, there was a good deal of consternation in the general press trying to understand news that President Trump had overruled the actions of the Office of Foreign Assets Control (“OFAC”) to impose additional sanctions on North Korea. Beside the oddity of a President overruling actions by a part of the Executive branch after they had been taken, it remains a mystery what the President was seeking to overrule. Not being deterred, OFAC marched on, and in so doing, it provided multiple examples again how compliance programs need to not be just written, but also followed and enforced, and cost at least one American company $1,869,144 plus significant compliance upgrade costs. (more…)
The U.S. Trade Representative (“USTR”) issued a press release on July 6, 2018 in which the process companies can use to seek exclusion from the 25% tariff imposed on the same day on goods from China was announced. The timeline requires all original exclusion requests to be filed by October 9, 2018. Each will be reviewed to insure completeness and will then be posted for public review, and 14 days from the date of any posting, all objections are due. No more than 7 days later, any applicant may file its reply. All such submissions are filed through regulations.gov and must reference Docket No. USTR-2018-0025. (more…)
Some events rather significant to international traders occurred in the last few days. First, on Friday, March 23, 2018, President Trump signed the latest spending bill. It includes a provision to renew Generalized System of Preferences (“GSP”) benefits retroactive to December 31, 2017, when the program last expired. GSP is now authorized through December 31, 2020.
With history as a guide, we should expect Customs and Border Protection to shortly publish a message advising when its programming is updated, the deadline by which to file refunds and similar details. In the past, so long as the entry was filed with an “A” or similar indicator, refunds were routinely issued, but importers would still be wise to make sure their list of eligible entries is current, and then to track their refunds. Since the bill was signed into law on Friday, the deadline to file refund requests will be 180 days later, which works out to September 18, 2018. (more…)