The Court of International Trade (“CIT”) saw nearly 3,000 complaints filed over a period of four days from Friday, September 18, 2020 to Monday, September 22, 2020 challenging the United States Trade Representative’s (“USTR”) authority to levy Section 301 Tariffs on products found on List 3 (and frequently, also those also found on List 4A) (“List 3 Tariffs”).  These complaints dovetail from the lead case which first raised this issue, filed on September 10, 2020, HMTX Industries LLC et al. v. United States.

Plaintiffs have generally taken the position that, while initial retaliatory tariff action reflected in the implementation of Section 301 Tariffs on products found on List 1 and List 2 may have been lawful, the USTR’s subsequent round of actions (i.e., List 3 and List 4A) failed to comply with requirements under the Administrative Procedures Act.  These lawsuits, if successful, may ultimately eliminate List 3 (and where applicable, List 4A) tariffs and result in refunds.  It remains to be seen whether refunds would be applicable to all importers, or only those who filed complaints.  Further action could be warranted in the latter case for those parties which elected not to file lawsuits but subsequently wish to pursue action to receive refunds on duties paid. Importers may also still challenge exclusion denials, extension denials, and the shortening of granted List 3 exclusions.

There remain conflicting opinions as to when the deadline to file a complaint contesting List 3 Tariffs expires (or expired).  The statute of limitations to file a complaint at the CIT expires after two years – the outstanding question is when this deadline first began tolling. Some argue that the deadline expired on Friday, September 18, 2020, starting the timer from the USTR press release which first announced the finalized list of covered tariff numbers included in List 3.  Others point to Monday, September 21, 2020, which is two years from the date on which the finalized list of covered tariff numbers was first published in the Federal Register.  Still others take the position that the deadline is September 24, 2020 (the date the tariffs actually took effect), or, possibly a later date corresponding to when an importer was first assessed a duty on an imported List 3 product.  There is therefore still time as of the publication of this blog, arguably, for importers to “throw their hat in the ring” with respect to contesting List 3 Tariffs.  We can additionally expect another round of lawsuits contesting List 4, but the expiry of the statute of limitations for those products remains around a year in the future at the earliest.

Regardless of the outcome at the CIT, importers can expect there will be at least one appeal to the Court of Appeals, and possibly another appeal to the Supreme Court.  Importers should therefore not expect any resolution on this question in the near future.

In ruling NY N314064, Customs and Border Protection (CBP) discussed the classification of a 3-in-1 magnetic sweeper from China. This item is designed to magnetically attract nails, screws, metal filings, and other metal scrap (ferrous material) from floors, walkways, driveways, parking lots, and work areas. This magnetic sweeper is composed of ceramic magnets (predominantly ferric oxide material) and a steel bar enclosed in a heavy-gauge steel and aluminum housing. A quick release handle, mounting brackets, removable tow handle, and semi-pneumatic wheels on both sides are attached.  As the sweeper moves across the ground, the magnets attract the  ferrous metal debris.  When the quick release handle is pulled, the collected debris is emptied out, where it can then be cleaned up.  The item can be pushed or pulled by the handle, mounted using eyebolts on the forks of a forklift, hung from a vehicle, and towed behind a vehicle.

CBP determined the applicable subheading is 8505.19.3000, HTSUS, which provides for Electromagnets; permanent magnets and articles intended to become permanent magnets after magnetization; electromagnetic or permanent magnet chucks, clamps and similar holding devices; electromagnetic couplings, clutches and brakes; electromagnetic lifting heads; parts thereof: Permanent magnets and articles intended to become permanent magnets after magnetization: Other: Other.  The rate of duty will be 4.9 percent ad valorem.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8505.19.3000, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty.  At the time of importation, the Chapter 99 subheading, 9903.88.03, in addition to subheading 8505.19.3000, HTSUS, must be reported.

In ruling NY N313708, Customs and Border Protection (CBP) discussed the classification of a cleaning compound in the form of putty called “Rodico.” The most common uses include removing oil and fingerprints from watch parts, and cleaning movement plates, bridges, dials, balance pivots, train wheel pivots, and gears. “Rodico” also removes oil, crud, dust, and debris from tools, removes dirt and oils from jewelry, and helps pick up and maneuver small watch parts like jewels and screws. CBP determined that the subject product is a cleaning preparation, not having a basis of soap or other organic surface-active agents.

Thus, CBP determined that the applicable subheading for “Rodico” is 3402.90.5030, HTSUS, which provides for Organic surface-active agents (other than soap); surface-active preparations, washing preparations (including auxiliary washing preparations) and cleaning preparations, whether or not containing soap, other than those of heading 3401: Other: Other: Other: Cleaning preparations. The general rate of duty is 3.7 percent ad valorem.

Brexit was once the topic of every conversation in the United Kingdom (U.K.), but, overshadowed by the COVID-19 pandemic, it’s not something we hear as much about these days.

The U.K. left the European Union (EU) on January 31, 2020 (bringing to an end 47 years of British membership of the EU and the institutions that preceded it) under the terms of the Withdrawal Agreement, an agreement struck by London and Brussels in October 2019. However, during the standstill post-Brexit transition period, most of the arrangements that were valid during the U.K.’s EU membership have been kept in place. As a result, and until the transition period expires on December 31, 2020, the U.K. must continue to comply with all EU rules and laws which include the rules on freedom of movement, cross border travel and personal rights. This means that up until now virtually nothing has changed for businesses or for the public.

However, the end of the transition period is in sight, and it will bring significant changes regardless of whether or not an agreement is reached on future trading and other relations. The U.K. and EU have both now ruled out any extension to the Brexit transition period so – barring the unlikeliest of U-turns over the next couple of weeks – we now know that a new post-Brexit landscape will take effect on January 1, 2021.

For more on planning for global mobility in a Post-Brexit world, please click here.

In ruling NY N313570 (Aug 21, 2020), Customs and Border Protection (CBP) discussed the classification of a cleaning pad from China. It is described as the inShield Wiper®, a dusting pad consisting of a 1.75 centimeter thick sponge covered with an 80% polyester and 20 % polyamide microfiber fabric.  It incorporates two woven elastic straps that loop around the assembled duster for the user to place their hand under when in use. A layer of neoprene is glued under the woven elastic straps that provides a cushion for the palm of the users hand when in use.

The assembled duster measures approximately 12 x 17 centimeters and is designed to be used to wipe away haze, fingerprints, smudges, smears and dust off of interior windshields, electronic touchscreens, stainless steel appliances, glass and mirrors.

As stated in the ruling, the item is considered by CBP as composite goods made of textile and plastic. GRI 3 provides for classification of composite goods.  GRI 3(b) provides that composite goods made up of different components shall be classified as if they consisted of the component which gives them their essential character.  CBP believes the microfiber fabric provides the essential character of the article since it provides the wiper’s cleaning surface.

CBP determined that the applicable subheading for the inShield Wiper is 6307.10.2030, HTSUS, which provides for “Other made up articles, including dress patterns:  Floorcloths, dishcloths, dusters and similar cleaning cloths:  Other:  Other.”  The rate of duty will be 5.3 percent ad valorem.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 6307.10.2030, HTSUS, unless specifically excluded, are subject to an additional 7.5 % ad valorem rate of duty.  At the time of importation, the Chapter 99 subheading, 9903.88.15, in addition to subheading 6307.10.2030, HTSUS, must be reported.

In a press release issued August 20, 2020, the Bureau of Industry and Security (BIS) announced a final order imposing a fine of over $31 million against Singapore based Nordic Maritime Pte. Ltd. (“Nordic”) and its Chairman, Morten Innhaug (“Innhaug”).

Nordic was found to have violated the Export Administration Regulations (EAR) by using U.S. origin subsea survey equipment, installed on a vessel chartered by Nordic, in Iranian territorial waters. A previous vessel operator had installed the equipment on the vessel pursuant to a BIS reexport license. After Nordic chartered the vessel, the previous operator sent Nordic a cease and desist letter informing them of the terms of the BIS reexport license and warned against use of the equipment in Iranian waters.

BIS determined that Nordic and Innhaug ignored the letter and instead used the controlled equipment to perform a 3D offshore seismic survey for an Iranian power plant management company in Iranian territorial waters without previous authorization from either BIS or Treasury’s Office of Foreign Assets Control (OFAC). Nordic was found to have committed three violations when it illegally reexported the equipment to Iran, including acting with knowledge of the violations, and making false and misleading statements to BIS during the investigation.  Innhaug was found to have aided and abetted Nordic in violating the regulations. BIS previously issued a 15-year denial order against both Nordic and Innhaug.

In ruling NY N313534 (August 18, 2020), Customs and Border Protection (CBP) discussed the classification of the LifeSmart-TrueWash, described as an Ozone and ultraviolet (UV) sterilizer.  The device measures approximately 14 inches wide, 14 inches high and 16 inches deep and is meant to be placed on a user’s kitchen counter or table.  The device includes a digital control panel, water reservoir, UV light source, and internal basket.  The sterilizer is meant to clean and sanitize a wide variety of items including fruits and vegetables, baby bottles, plastic containers, and small personal electronics, by killing 99.9% of germs and bacteria.

The ruing states that in use, the user will place the desired item to be sterilized or sanitized within the basket in the machine. From the control panel, the necessary cleaning cycle is then selected that corresponds with the item. For some items, such as food and everyday plastic items, the unit will first spray the items with activated Ozone that is generated from the water contained within the reservoir.  These cleaning cycles require the user to pour 4 cups of water into the reservoir. The UV lamp is then turned on to further sanitize and sterilize the items.  Some preset cleaning functions, such as those designated for personal electronics, do not spray with Ozone, but only sterilize with UV light. The basket within the sanitizer spins to dry the sterilized goods.

CBP determined that the applicable subheading for the LifeSmary-TrueWash sterilizer will be 8543.70.9960, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; Other machines and apparatus; …Other.”  The general rate of duty will be 2.6 percent ad valorem.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, CBP states that products of China classified under subheading 8543.70.9960, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty.  At the time of importation, the Chapter 99 subheading, 9903.88.02, in addition to subheading 8543.70.9960, HTSUS, must be reported.

In ruling NY N313554 (August 4, 2020), Customs and Border Protection (CBP) discussed the classification of a Bluetooth-enabled speaker. The item is the Drips Wireless Speaker, which incorporates a single 3 watt speaker and microphone.  It is compatible with any Bluetooth-enabled device, such as a smartphone.  It can answer/reject incoming telephone calls, redial the last number dialed and incorporates a talking caller ID.  It also incorporates a 3.5 mm auxiliary input jack used to connect the speaker to an audio source using an audio cable. This speaker is powered by a 500 mAh USB rechargeable lithium-ion battery.

CBP determined that the applicable subheading for the speaker is 8518.21.0000, HTSUS, which provides for “Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures…: Loudspeakers, whether or not mounted in their enclosures: Single loudspeakers, mounted in their enclosures.”  The rate of duty will be Free.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, CBP stated that products of China classified under subheading 8518.21.0000, HTSUS, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty.  At the time of importation, the Chapter 99 subheading, 9903.88.15, in addition to subheading 8518.21.0000, HTSUS, must be reported.

In ruling NY N313219 (July 29, 2020), Customs and Border Protection (CBP) discussed the classification of the SNAPXT Thermal Scanner. It consists of an infrared thermometer connected to a programmable 8-inch touch screen. The device also encompasses a RGB dual-lens color camera and infrared camera for facial recognition, LED lights for increased visibility of the user and capable of reading NFC, RFID, BLE & QR codes for scanning the user’s identification badge. In regards to temperature measurement, it can measure temperature from a distance of approximately 50 to 70 cm, with an accuracy of ±0.3°C(±0.54°F), and a range of 15-45°C (59-113°F). The infrared thermometer temperature reading is displayed on the LCD screen near the picture of the user. If specifically programmed, the SNAPXT Thermal Scanner can also provide entry into a building if the user has an acceptable temperature as well as the ability to send alerts via email for tracking and security purposes.

Goods that are facially classifiable under two or more headings, are classifiable in accordance with GRI 3. GRI 3(a) states that the heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refers to only part of the machine then those headings are to be regarded as equally specific in relation to the function of the machine. As per Note 3 to Section XVI, composite machines consisting of two or more machines fitted together or machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component which performs the principal function. In this instance, CBP stated that the principal function cannot be determined. According to General Explanatory Note (VI) to Section XVI, when it is not possible to determine the principal function of the machine as provided for in Note 3 to Section XVI, and when the context does not otherwise require, it is necessary to apply GRI 3(c). Thus, CBP classified the SNAPXT Thermal Scanner under the subheading occurring last in numerical order among those which equally merit consideration. In this instance, the temperature reading component falls within heading 9025.

 

CBP determined that the applicable subheading for the SNAPXT Thermal Scanner is 9025.19.8010, HTSUS, which provides for “Hydrometers and similar floating instruments, thermometers, pyrometers, barometers, hygrometers and psychrometers, recording or not, and any combination of these instruments; parts and accessories thereof: Thermometers and pyrometers, not combined with other instruments: Other: Other: Clinical: Infrared thermometers of a kind described in statistical note 2 of this chapter.” The rate of duty is free.

 

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China are classified under subheading 9025.19.8010, HTSUS, unless specifically excluded, and are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, the Chapter 99 subheading, 9903.88.02, in addition to subheading 9025.19.8010, HTSUS, must be reported.

 

The Government of Canada has announced retaliatory tariffs of 10 percent on certain steel and aluminum imports from the United States, effective September 16, 2020. These countermeasures will only apply to goods originating from the U.S. and will remain in place until the U.S. eliminates its aluminum tariffs. The U.S. had previously announced on August 6, 2020 the imposition of tariffs of 10 percent on all aluminum products from Canada effective August 16, 2020. The Canadian Department of Finance will accept comments on its proposed retaliatory tariff list until September 6, 2020.

All comment submissions to the government should include, at a minimum, the following information:

  1. Canadian company/industry association name and contact person.
  2. Relevant eight-digit tariff item(s) and description of the goods of particular interest.
  3. Reasons for the expressed support for, or concern with, the proposed countermeasures, including detailed information substantiating any expected beneficial or adverse impact.
  4. Please identify if information provided in the submissions is commercially sensitive.

Comments should be sent to the email address fin.tariff-tarif.fin@canada.ca and include the term “Aluminum countermeasures” in the subject line.

In May 2019, the United States announced a deal with Canada and Mexico to remove U.S. Section 232 tariffs for steel and aluminum imports in exchange for the removal of Mexican and Canadian retaliatory tariffs. The agreement provided a monitoring mechanism to prevent surges in steel and aluminum imports into the U.S. If the U.S. government determined a surge in steel or aluminum imports has occurred, then the U.S. could reimpose Section 232 tariffs. However, any retaliation by Canada or Mexico would then be limited to steel and aluminum products, as to not drag other industries into the trade dispute.

In accordance with that agreement, the table of retaliatory tariffs provided by the Canadian government includes 68 products of steel or aluminum composition. Notable products include bicycles, golf clubs, refrigerators, and washing machines. For the full list of products and HTS codes, please see below:

Tariff Item Description (note 1)
2606.00.00 Aluminum ores and concentrates
2620.40.00 Slag, ash and residues, containing mainly aluminum
2818.20.00 Aluminum oxide
2818.30.00 Aluminum hydroxide
2826.12.00 Fluorides of aluminum
2827.32.00 Other chlorides of aluminum
2833.22.00 Other sulphates of aluminum
3212.90.00 Pigments used in manufactures of paints and dyes
3815.19.00 Reaction initiators, reaction accelerators and catalytic preparations, other
7601.10.00 Unwrought aluminum, not alloyed
7601.20.00 Unwrought aluminum, aluminum alloys
7602.00.00 Aluminum waste and scrap
7603.10.00 Aluminum powders of non-lamellar structure
7603.20.00 Aluminum powders of lamellar structure; aluminum flakes
7604.10.00 Aluminum bars, rods and profiles, not alloyed
7604.21.00 Hollow profiles, of aluminum alloys
7604.29.00 Aluminum bars, rods and profiles, of aluminum alloys, other
7605.11.00 Aluminum wire, not alloyed, of which the maximum cross-sectional dimension exceeds 7 mm
7605.19.00 Aluminum wire, not alloyed, other
7605.21.00 Aluminum wire, of aluminum alloys, of which the maximum cross-sectional dimension exceeds 7 mm
7605.29.00 Aluminum wire, of aluminum alloys, other
7606.11.00 Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm, rectangular (square), not alloyed
7606.12.00 Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm, rectangular (square), of aluminum alloys
7606.91.00 Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm, other, not alloyed
7606.92.00 Aluminum plates, sheets and strip, of a thickness exceeding 0.2 mm, other, of aluminum alloys
7607.11.00 Aluminum foil, not backed, rolled but not further worked
7607.19.00 Aluminum foil, not backed, other
7607.20.00 Aluminum foil, backed
7608.10.00 Aluminum tubes and pipes, not alloyed
7608.20.00 Aluminum tubes and pipes, of aluminum alloys
7609.00.00 Aluminum tube or pipe fittings
7610.10.00 Aluminum doors, windows and their frames and thresholds for doors
7610.90.10 Aluminum structures and parts of structures; aluminum plates, rods, profiles, tubes and the like, prepared for use in structures, other than doors, windows and their frames and thresholds for doors, for use in Canadian manufactures
7610.90.90 Aluminum structures and parts of structures; aluminum plates, rods, profiles, tubes and the like, prepared for use in structures, other than doors, windows and their frames and thresholds for doors, other
7611.00.00 Aluminum reservoirs, tanks, vats and similar containers, for any material (other than compressed or liquefied gas), of a capacity exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment
7612.10.00 Aluminum collapsible tubular containers
7612.90.10 Aluminum aerosol containers, excluding three-piece cans without inserts having a base diameter of 50 mm or more but not exceeding 80 mm
7612.90.91 Embossed aluminum cans for use in the packaging of beverages
7612.90.99 Aluminum casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), of a capacity not exceeding 300 litres, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment, other
7613.00.00 Aluminum containers for compressed or liquefied gas
7614.10.00 Stranded wire, cables, plaited bands and the like, of aluminum, not electrically insulated, with steel core
7614.90.00 Stranded wire, cables, plaited bands and the like, of aluminum, not electrically insulated, other
7615.10.00 Aluminum table, kitchen or other household articles and parts thereof; aluminum pot scourers and scouring or polishing pads, gloves and the like
7615.20.00 Aluminum sanitary ware and parts thereof
7616.10.00 Aluminum nails, tacks, staples (other than those of heading 83.05), screws, bolts, nuts, screw hooks, rivets, cotters, cotter-pins, washers and similar articles
7616.91.00 Cloth, grill, netting and fencing, of aluminum wire
7616.99.10 Articles of aluminum: Cups for use in the manufacture of candles; Ferrules for use in the manufacture of pencils; Fish egg incubators and parts thereof; For climbing or mountaineering; Identification bands for migratory birds; Pigeon countermark leg bands; To be employed in the manufacture of sera, antisera, toxoids, viruses, toxins or antitoxins, virus or bacterial vaccines, bacteriophage or bacterial lysates, allergenics, liver extracts, pituitary extracts, epinephrine or its solutions, insulin (with or without zinc, globin or protamine), and blood plasma or serum of human origin, or fractions thereof, or extenders or substitutes thereof
7616.99.90 Other articles of aluminum, other
8418.21.00 Refrigerators, household type, compression type
8418.29.00 Refrigerators, household type, other
8450.11.10 Household washing machines, not including machines which both wash and dry, of a dry linen capacity not exceeding 10 kg, fully-automatic
8450.11.90 Household or laundry-type washing machines, including machines which both wash and dry, of a dry linen capacity not exceeding 10 kg, fully-automatic, other
8450.12.00 Household or laundry-type washing machines, including machines which both wash and dry, of a dry linen capacity not exceeding 10 kg, with built-in centrifugal dryer
8450.19.00 Household or laundry-type washing machines, including machines which both wash and dry, of a dry linen capacity not exceeding 10 kg, other
8450.20.00 Household or laundry-type washing machines, including machines which both wash and dry, of a dry linen capacity exceeding 10 kg
8532.22.00 Other fixed capacitators, aluminum electrolytic
8712.00.00 Bicycles and other cycles
8714.91.10 Frame lugs, bottom bracket shells, forks, fork tubing sets, fork bearing assemblies, hydraulic shock absorbing cylinders, spring shock absorbers, rear pivots, cable stops, cable guides and back, chain and seat stays
8714.91.90 Other frames and forks, and parts thereof
8714.92.00 Wheel rims and spokes of vehicles of headings 87.11 to 87.13, other than bicycle wheels
8714.99.10 Bicycle wheels
8716.39.10 Aluminum construction drop-centre livestock trailers having a g.v.w. of 11.778 tonnes or more and a length exceeding 12 m
9403.10.00 Metal furniture of a kind used in offices
9403.20.00 Other metal furniture
9406.90.90 Prefabricated buildings, other than of wood
9506.31.00 Golf clubs, complete
9506.99.00 Articles for sports and general physical exercise (e.g., bats, hockey sticks, playground equipment)
9620.00.93 Monopods, bipods, tripods of aluminum
Note 1: Descriptions are included for illustrative purposes and do not necessarily reflect Customs Tariff nomenclature.