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The USTR announced on August 3rd that it will review Turkey’s eligibility for the Generalized System of Preferences (GSP) program that grants duty-free access to the U.S. market. GSP is a U.S. trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories. Concern over Turkey’s “compliance with the GSP market access criterion,” led the USTR to initiate the review. This also follows Turkey retaliatory tariffs on U.S. goods in response to the Section 232 tariffs imposed by the U.S. in March. Earlier this year, Commerce submitted reports to President Trump stating U.S. importers’ reliance on foreign-made aluminum and steel posed a national security risk.

In 2017, the top categories of goods imported from Turkey under the program were vehicles and vehicle parts, jewelry and precious metals, and stone articles. The final decision on Turkey’s GSP status will be made after a public hearing and comment process.

Steel imports from Turkey have fallen significantly according to data from the U.S. International Trade Commission. Steel imports from Turkey were 1.3% of total U.S. steel imports from January to June of 2018 and dropped over 41% since June 2017. Following on the heels of the USTR’s announcement regarding Turkey’s GSP eligibility review, on August 10, 2018, President Trump threatened to double the Section 232 tariffs on steel and aluminum imports from Turkey, to 50 percent and 20 percent, respectively claiming that the existing tariffs have less of an impact due to Turkey’s currency, the lira, depreciating against the U.S. dollar.

The White House issued the following statement:

“[T]he President has authorized the preparation of documents to raise tariffs on imports of steel and aluminum from Turkey. Section 232 tariffs are imposed on imports from particular countries whose exports threaten to impair national security as defined in Section 232, independent of negotiations on trade or any other matter.”

For further information, please contact us.

 

On August 8, China released its list of retaliatory tariffs on $16 billion in U.S. goods. This was in direct response to the USTR’s announcement on August 7 of the final List 2 of Section 301 tariffs on $16 billion in Chinese imports. The Chinese Ministry of Finance’s list released today includes an additional 219 tariff items that were added to the list China originally released back in June. Both the U.S. and China are setting tariff rates at 25% for this second tranche of goods and plan to implement the duties on August 23.

Please click here for an unofficial English version of the HTS Subheadings on the Chinese list.

For an overview of the current U.S. Section 301 tariff status, please click here.

 

 

 

 

 

On August 7, 2018, the United States Trade Representative (USTR) released a final list of approximately $16 billion worth of imports from China that will be subject to a 25 percent additional tariff. The list contains 279 of the original 284 tariff lines that were on a proposed list announced on June 15.

Update: the five tariff items that were excluded from the final List 2 are:

3913.10.00 Alginic acid, and its salts and esters, in primary forms
8465.96.00 Splitting, slicing or paring machines for working wood, cork, bone, hard rubber, hard
plastics or similar hard materials
8609.00.00 Containers (including containers for transport of fluids) specially designed and
equipped for carriage by one or more modes of transport
8905.90.10 Floating docks
9027.90.20 Microtomes

Changes to the proposed list were made after USTR and the interagency Section 301 Committee sought and received written comments and testimony during a two-day public hearing last month. Customs and Border Protection will begin to collect the additional duties on the Chinese imports on August 23.

A formal notice of the $16 billion tariff action will be published in the Federal Register. Please contact us if you have any questions or need assistance.

 

On July 26, 2018, the Senate unanimously passed the Miscellaneous Tariff Bill Act of 2018 (MTB), a bill that would cut or eliminate tariffs on articles such as chemicals, footwear, toasters, and roughly 1,660 other items made outside the United States. Roughly half of those items are produced in China. The bill was passed without debate. The last MTB passed by Congress expired on December 31, 2012.

President Trump had announced a series of punitive tariffs on Chinese imports and China has retaliated with its own duties on imports from the United States. The White House has not yet announced a position on the MTB bill, which has now passed both the Senate and the House of Representatives unanimously. There are minor differences that need to be resolved before the legislation can be sent to the President to sign into law.

Associations have been urging Congress to pass MTB in order to eliminate what they claim are unfair, out-of-date and/or anticompetitive taxes. It is estimated that the 2018 MTB Act would eliminate import tariffs of more than $1.1 billion over the next three years and boost U.S. manufacturing output by more than $3.1 billion. Supporters of the bill have stated that it would boost the economy by getting rid of tariffs set up to protect industries that no longer exist in the United States.

 

 

On July 16, 2018, the Court of Federal Claims released a far-reaching decision in Acetris Health, LLC v. United States, concluding that a drug could qualify as a “U.S.-made end product” under the Trade Agreements clause, FAR 52.225-5, despite a Customs and Border Protection (CBP) ruling under the Trade Agreements Act (TAA), that the drug had not been “substantially transformed” in the United States, the usual test for whether a product from a designated country is eligible for sale to the United States under the TAA. The court concluded that a drug which met the definition of a “domestic end product” would also qualify as a “U.S.-made end product” and enjoined the Department of Veterans Affairs from relying on the CPB ruling in declaring the product ineligible. In doing so, the court has given effect to often overlooked language in the FAR 25.003 definition of “U.S.-made end product” that allows either an item manufactured in the United States or an item substantially transformed in the United States to be eligible for sale to the federal government. The decision opens the door for manufactured COTS items to be eligible under the TAA as long as final assembly occurs in the United States, without regard to the source of a COTS product’s components. It might even have broader implications because the FAR has never included an express definition of “manufacture,” and the definition of “U.S. made end product” does not expressly reference the definition of “domestic end product,” under which, in the Buy American context, “manufacture” is just one of two elements for determining eligibility.

On July 10, 2018, U.S. Trade Representative (USTR) Robert Lighthizer announced that at President Trump’s request, USTR has initiated the process of imposing an additional 10 percent ad valorem duty on approximately $200 billion worth of imports from China including apparel, textiles, chemicals, and agricultural & aquacultural goods.

The USTR statement includes a link to an advance copy of the Federal Register Notice with the list of proposed tariffs and the process for the public notice and comment period. The notice will be published in the Federal Register later this week.

This is the third round of additional tariffs proposed by the Trump administration as a result of its Section 301 investigation into China’s alleged unfair trade practices related to “the forced transfer of American technology and intellectual property.”

The notice indicated the USTR will maintain the first round of tariffs on $34 billion worth of goods implemented on July 6, and will continue with a second round of proposed tariffs on $16 billion worth of goods. This second list is currently under review in a public notice and comment process, with a public hearing scheduled for July 24, 2018.

The Harmonized Tariff Schedule of the United States (HTSUS) subheadings of the products subject to the proposed tariffs is listed in the Annex (pages 11-205) to the notice.

The notice also included a list of key dates for a public notice, comment, and hearing process:

  • July 27, 2018: Due date for filing requests to appear and a summary of expected testimony at the public hearing, and for filing pre-hearing submissions.
  • August 17, 2018: Due date for submission of written comments.
  • August 20-23, 2018: The Section 301 Committee will convene a public hearing in the main hearing room of the U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436 beginning at 9:30 am.
  • August 30, 2018: Due date for submission of post-hearing rebuttal comments.

 

 

Section 301 For covered products in List 1, please click here. 25% 7/6/2018
For covered products in List 2, please click here. TBD TBD
For covered products in List 3, please click here and see Annex 10% TBD
Status: List 1 totaling $34 billion worth of imports is composed of 818 tariff lines, and went into effect on 7/6/2018.

 

List 2 totaling $16 billion worth of imports is composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. These are in a public review process.

 

List 3 includes a list of tariff lines of products from China with an annual trade value totaling approximately $200 billion. These are also subject to a public review process.

On June 20, 2018, the U.S. Trade Representative (USTR) announced in the Federal Register that, beginning on July 6, 2018, an additional 25% duty will be imposed on products from China set out in Annex A of the notice. The USTR also released details on the public hearing and comments schedule regarding additional proposed tariffs on the list of products set out in Annex C of the notice.

Yesterday’s notice confirmed the USTR’s proposed Section 301 actions on two lists of tariff lines released through a press conference on June 15. The first list included 818 tariff lines valued at $34 billion worth of imports from China. The second list includes 284 tariff lines and is valued at $16 billion worth of imports from China. For details, please click here.

The USTR will convene a public hearing regarding the second list of tariff lines on July 24, 2018. Interested parties are required to file a request to appear at the hearing and a summary of expected testimony by June 28, 2018.

Written comments pertinent to the second list of tariff lines are due by July 23, 2018. Rebuttals to those comments are due by July 31, 2018.

The USTR determined it would establish a process by which U.S. stakeholders could request that particular products classified within a covered tariff subheading in Annex A be excluded from these additional duties. However, details on the exclusion process have not yet been released. The notice indicates that USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request.

 

 

 

 

 

 

Beginning on Friday, June 22, 2018, US exports to the European Union will face an extra duty at their border. These products include U.S. steel and aluminum products, agricultural goods, and a combination of various other products. The full list is available here. The various products include the following fashion and apparel articles, which will each be assessed an additional 25% ad valorem tariff penalty:

  • 61091000        T-shirts, singlets and other vests of cotton, knitted or crocheted
  • 61099020        T-shirts, singlets and other vests of wool or fine animal hair or man-made fibres, knitted or crocheted
  • 61099090        T-shirts, singlets and other vests of textile materials, knitted or crocheted (excl. of wool, fine animal hair, cotton or man-made fibres)
  • 62034231        Men’s or boys’ trousers and breeches of cotton denim (excl. knitted or crocheted, industrial and occupational, bib and brace overalls and underpants)
  • 62034290        Men’s or boys’ shorts of cotton (excl. knitted or crocheted, swimwear and underpants)
  • 62034311        Men’s or boys’ trousers and breeches of synthetic fibres, industrial and occupational (excl. knitted or crocheted and bib and brace overalls)
  • 62046231        Women’s or girls’ cotton denim trousers and breeches (excl. industrial and occupational, bib and brace overalls and panties)
  • 62046290        Women’s or girls’ cotton shorts (excl. knitted or crocheted, panties and swimwear)
  • 63023100        Bed linen of cotton (excl. printed, knitted or crocheted)
  • 64035995        Men’s footwear with outer soles and uppers of leather, with in-soles of >= 24 cm in length (excl. covering the ankle, incorporating a protective metal toecap, made on a base or platform of wood, without in-soles, with a vamp or upper made of straps, indoor footwear, sports footwear, and orthopedic footwear)

In a press release, the EU indicated it will rebalance bilateral trade with the US taking as a basis the value of its steel and aluminum exports affected by the US measures. Those are worth €6.4 billion. Of this amount, the EU will rebalance on €2.8 billion worth of exports immediately. The remaining rebalancing on trade valued at €3.6 billion will take place at a later stage – in three years’ time or after a positive finding in WTO dispute settlement if that should come sooner.

The EU indicated that its rebalancing measures will be effective for as long as the US measures are in place, in line with the WTO Safeguards Agreement and EU legislation.

The Implementing Regulation, will be published by the EU tomorrow and entering into force on Friday. It will set out the products and level of duties to be applied, both now and (if necessary) in the future.

On June 15, the Office of the United States Trade Representative (USTR) issued a press release announcing its intent to impose additional tariffs on products imported from China. The additional tariffs are part of the U.S.’ response to China’s unfair trade practices related to “the forced transfer of American technology and intellectual property” pursuant to Section 301 of the Trade Act of 1974.

Two lists of tariff lines were released. The first list includes 818 of the original 1,333 lines and is valued at $34 billion worth of imports from China. Products falling under these tariff lines will see an additional duty of 25 percent beginning on July 6.

The second list consists of 284 new tariff lines identified by the interagency Section 301 Committee as “benefiting from Chinese industrial policies, including the “Made in China 2025” industrial policy.”

These 284 lines cover approximately $16 billion worth of imports from China. This list will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

 

Section 301 For covered products, please click here for the Federal Register Notice. See Annex B.

For covered products, please click here for the Federal Register Notice. See Annex C.

 25%

 

TBD

 7/6/2018

 

TBD
Status: List 1 is composed of 818 of the original 1,333 tariff lines, and goes into effect on 7/6/2018.

List 2 is composed of 284 proposed tariff lines identified by the interagency Section 301 Committee. These will see further review, to include a public hearing.

For full details, please click here.

On June 5, U.S. Customs and Border Protection (CBP) issued a message providing instructions for importers who receive approval for a steel or aluminum product exclusion from the Department of Commerce (DOC).

The message states, “Upon receipt of the approved product exclusion from the DOC, for the importer of record listed in the approved exclusion, please provide that company’s name, address and importer of record number, and the associated product exclusion number, to U.S. Customs and Border Protection (CBP) at Traderemedy@cbp.dhs.gov. You must provide this information to CBP before the importer of record submits the exclusion number with entries to CBP.”

Further instructions on how to provide the information are included.

It adds, “Exclusions granted by DOC are retroactive on imports to the date the request for exclusion was posted for public comment at Regulations.gov. To request an administrative refund for previous imports of excluded products granted by DOC, importers may file a Post-Summary Correction (PSC) and provide the product exclusion number in the Importer Additional Declaration Field.”

The message also states if an “entry has already liquidated, importers may protest the liquidation.”