On January 31, 2020, President Trump issued Executive Order 13904 (“EO”) entitled “Ensuring Safe & Lawful E-Commerce for U.S. Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights.” It begins by stating that e-commerce is “being exploited by traffickers to introduce contraband into the United States, and by foreign exporters and United States importers to avoid applicable customs duties, taxes and fees.” The types of malfeasance cited are counterfeit goods, narcotics (specifically synthetic opioids, such as fentanyl), and other contraband, plus, of course, protection of the revenue. The focus of the EO is on express consignment operators, carriers, hub facilities, international posts, customs brokers and e-commerce platform operations (the “Regulated Parties”). Anyone who participates in the “introduction or attempted introduction” of parcels containing contraband can be held accountable with accountability taking the form of both civil and criminal consequences, as appropriate. The EO goes on to state that CBP’s suspension and debarment procedure will form the framework through which these actions will be carried out. Suspension and debarment apply in the context of doing business with the government, such as government contracts, subcontracts, grants, loans and other assistance programs.
Clearly, there is more going on these days in Washington, D.C. than just the impeachment hearings, and activities this week made that point clear. In the span of only a few days, we saw progress on two key issues – the China 301 tariffs and the U.S.-Mexico-Canada Agreement (USMCA).
First, we saw an indefinite suspension of the List 4B 15% China tariff which was to take effect on December 15, 2019. The President tweeted about it, saying “The 25% Tariffs will remain as is with 7 1/2% put on much of the remainder…” (see here for the full text) and USTR issued a press release (see here). Regretfully, neither is very clear, beyond stating the tariff on goods on List 4B is suspended indefinitely. CBP confirmed the suspension later in the day at CSMS 40984510. There was also a Fact Sheet issued by USTR (see here), but it, too, failed to clear up the tariff impact. (more…)
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…)
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 U.S. Trade Representative (“USTR”) has prepared for publication a Federal Register Notice (“Notice”) that identifies a list of approximately 1,300 tariff lines on which it proposes to levy additional duties of up to 25% on goods made in China. The pre-published copy of the Notice was released yesterday, April 3, 2018, and includes an Annex identifying the products on which USTR proposes to assess the additional duties. The notice can be found here. According to an accompanying press release, the sectors targeted for the proposed tariffs “include industries such as aerospace, information and communication technology, robotics, and machinery.” The press release further indicates these tariffs are intended to combat China’s “industrial plans, such as ‘Made in China 2025.’” The tariffs, therefore, are intended to “target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy.”
The Notice announces a public hearing and an opportunity for interested parties to submit written comments. The public hearing will take place on May 15th; interested members of the public must file requests to appear at that hearing, and a summary of expected testimony as well as any other pre-hearing submissions are due by April 23rd. Written comments must be filed by May 11th, and any post-hearing rebuttal comments are due May 22nd. (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…)
When President Trump announced the 25% steel and 10% aluminum tariffs on March 8, 2018, he instructed the Secretary of Commerce to issue regulations explaining how American companies could seek exclusions from those tariffs no later than March 19, 2018, and that deadline has been met. These new regulations can be found here.
Before we discuss the new regulations, we should start with the data Customs and Border Protection (CBP) released with its programming updates to implement these safeguard tariffs. (more…)
Earlier today, March 8, 2018, President Trump signed two Presidential Proclamations, one dealing with additional tariffs on steel and the other with additional tariffs on aluminum. As has been widely reported in the general press, those rates are 25% on steel and 10% on aluminum. The only countries exempted are Canada and Mexico.
Steel articles are defined as those which are classified under HTSUS 7206.10 through 7216.50 (including ingots, bars, rods and angles), 7216.99 through 7301.10 (including bars, rods, wire, ingots, and sheet piling), 7302.10 (rails), 7302.40 through 7302.90 (including plates and sleepers), and 7304.10 through 7306.90 (including tubes, pipes and hollow profiles). Aluminum products are defined as unwrought aluminum (HTS 7601); aluminum bars, rods, and profiles (HTS 7604); aluminum wire (HTS 7605); aluminum plate, sheet, strip and foil (flat rolled products) (HTS 7606 and 7606); aluminum tubes and pipes and tube and pipe fittings (HTS 7608 and 7609); and aluminum castings and forgings (HTS 7616.99.5160 and 7622.214.171.124). (more…)