Though the Trump administration “delayed” imposing new List 4 Section 301 tariffs on Chinese imports (see 1907010015), “it does not mean they will not be implemented at a later date,” emailed Ricoh USA to business customers Tuesday. Though “mitigation efforts are already underway,” Ricoh’s “increased costs (if new tariffs are implemented) may lead to increased pricing for new purchases,” it said. “Should that occur, we will continue to keep you updated.”

The Office of the U.S. Trade Representative will begin a Section 301 investigation of France's proposed digital services tax, which is expected to pass the French Senate tomorrow, the USTR said in a news release. "The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain U.S.-based technology companies," the release said. A Federal Register notice will follow with instructions on how to comment on or testify in front of the investigation.

The Office of the U.S. Trade Representative is publishing its latest list of product exclusions from the first tranche of $34 billion in Section 301 tariffs on China (see 1907080008). This sixth list of exclusions includes 110 subsets of tariff numbers in chapters 84, 85 and 90. The new exclusions take effect retroactively from July 6, 2018, when the $34 billion in tariffs originally entered into force, and will remain for one year following publication of USTR’s notice. USTR is creating Harmonized Tariff Schedule subheading 9903.88.11 for the new set of exclusions.

The Office of the U.S. Trade Representative issued a sixth list of product exclusions from Section 301 tariffs on goods from China. Newly exempt from the tariffs are "110 specially prepared product descriptions," the agency said. The exclusions cover 362 separate requests, according to the notice, which is scheduled for publication in the July 9 Federal Register. The product exclusions apply retroactively to July 6, 2018, the date the first set of tariffs took effect, and will remain in effect until one year after the notice is published.

Objections to the exemption of low value shipments from the Section 301 duties on goods from China demonstrates the need for a change in law to allow for de minimis exemptions for goods withdrawn from foreign-trade zones, the 321 Coalition said in comments to the Office of the U.S. Trade Representative. The comments were part of the docket on the fourth tranche of Section 301 tariffs on goods from China, which are now on hold as the U.S. and China work toward a trade deal (see 1907010012). The coalition similarly said it would like to see federal law changed to allow for de minimis entry for goods from foreign-trade zones as part of CBP's customs framework review (see 1902140022).

2019 is shaping up to be another active year in terms of changes to the Harmonized Tariff Schedule. Like last year, a series of revisions were necessary in the first half of the year to implement Section 301 exemptions and an increase for $200 billion worth of the China tariffs from 10 percent to 25 percent. Other major changes are related to the Generalized System of Preferences, and in particular the removal of India and Turkey from the program. In all, seven revisions were issued prior to the mid-year Revision 8, as follows:

The International Trade Commission on July 1 posted Revision 8 to the 2019 Harmonized Tariff Schedule. The semiannual update to the HTS implements the fourth and final round of tariff cuts under the expanded World Trade Organization Information Technology Agreement. It also extensively reorganizes 10-digit tariff subheadings covering aluminum products, and adds tariff provisions for aerial work platform trucks, frozen berry mixes, diamond grinding wheels, storage lockers and certain electric motorcycles.

ITC Issues Semiannual Revision to 2019 HTS; Changes Take Effect July 1

The rapid changes in trade policy have elevated the need for adroit trade compliance management at international companies that hadn't previously been so concerned with customs duties, said two compliance professionals who spoke at the American Association of Exporters and Importers Annual Conference in Washington on June 28. "It's been an overall breaking down walls of communication" among the various groups at the company who "historically" didn't interact very often, said Antoinette Montoya, corporate export-import compliance manager at Bechtel Corporation. Now, though, "we've had a lot of really good strategic relationships built out of this," she said. Whatever happens with subsequent administrations, those relationships will "really help us in the long run," Montoya said.

With 90 percent of U.S. laptops and more than 75 percent of smartphones sourced from China, “there is simply insufficient capacity in the rest of the world to absorb production shifts of these high-demand devices in the short term,” commented the Software & Information Industry Association, posted Tuesday in docket USTR-2019-0004. If the List 4 Section 301 tariffs on those products are implemented, “U.S. producers would have to either sacrifice profits on U.S. sales or pass increased costs on to consumers by raising prices,” said SIIA. “In the low-margin and high-risk consumer hardware business, few if any U.S. firms would be able to absorb a 25% surcharge on products without losing significant market share to foreign competitors who are not burdened by such additional costs.” SIIA fears “many smaller U.S. firms in these sectors would simply go out of business, while larger firms would become less competitive globally." And "raising prices at this time of year further risks missing production goals for the critical holiday season.” That can “damage annual sales targets” and risk compromising the “the long-term viability of a product,” the group said. Post-hearing rebuttals were due Tuesday, ending the List 4 rulemaking proceeding. President Donald Trump put the List 4 tariffs on hold after agreeing to resume trade negotiations with China (see 1907010070 or 1907010015).