Importers can use the temporary import provisions with goods subject to Section 301 tariffs in order to pay the tariffs at current levels and avoid potential increases, CBP said in a Feb. 21 ruling, HQ H302203. Alex Romero of A.F. Romero & Co. Customs Brokers requested CBP's ruling on behalf Panacea Products Corp. Several of Panacea's products are subject to the third list of Section 301 tariffs, which were originally slated to increase from 10 percent to 25 percent on Jan. 1. That increase has since been delayed "until further notice" while the U.S. and China negotiate (see 1903010036).

The U.S. could well be within weeks of reaching a comprehensive, "structural" trade accord with China or walking away from the negotiations empty-handed, U.S. Trade Representative Robert Lighthizer told a Senate Finance Committee hearing Tuesday. Lighthizer declined repeatedly, as he did at a House Ways and Means hearing two weeks ago (see 1902270047), to commit publicly whether a deal hinges on lifting the Section 301 tariffs on Chinese imports or keeping them in place to force China's compliance.

Rep. Jackie Walorski, R-Ind., said that with an approval rate of just under 6 percent for steel exclusion requests when domestic firms objected, "it really looks like somebody's finger is on the scale." In a sit-down with International Trade Today, Walorski explained how what started with complaints from 10 businesses in her district -- which is heavy with steel-consuming RV manufacturers -- has made her office the place for companies around the country to share their problems with exclusions. "We knew this is probably what was going to happen," she said of the exclusion process that favors domestic producers.

International Trade Today is providing readers with some of the top stories for March 4-8 in case they were missed.

Sourcing goods from alternative countries of origin to escape Section 301 tariffs on Chinese imports can be difficult or time-consuming, so companies increasingly are turning to other ways to mitigate the duties, said experts at a Georgetown Law workshop last week on international trade. More importers seeking to lower their exposure to the tariffs are finding that making changes in customs valuation of their goods can deliver the best bang for the buck, said Lynlee Brown, a senior manager at Ernst & Young.

When U.S. Trade Representative Robert Lighthizer was asked during his Senate Finance Committee testimony March 12 if the China trade deal might come together by the end of March, he said it remains to be determined. "Well, we’ll see ... I don’t know when something’s going to happen. Something is either going to have a good result or we’re going to have a bad result before too long," he said. "But I’m not setting a specific time frame and it’s not up to me. I’m working as hard as I can, and the president will tell me when the time is up or the Chinese will." He told Sen. Rob Portman, R-Ohio, a former USTR himself, that the Chinese are offering concessions with the goal of getting Section 301 tariffs lifted, and he said that "is under debate."

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, said that since tariffs on the largest, third tranche of Chinese products are at 10 percent, an exclusion process isn't necessary. He said he agrees with the Office of the U.S. Trade Representative's position that unless that tariff goes up to 25 percent, there won't be exclusions offered.

March retail imports are expected to drop to their lowest levels in nearly a year, with retailers in their annual “lull” between promotional shopping periods and the Section 301 tariff increase on Chinese imports indefinitely on hold (see 1903010031), said the National Retail Federation Friday. Retailers are “taking a break from the rush to bring merchandise in ahead of tariff hikes now that the increase that was scheduled for March has been delayed,” said NRF. “We are hoping that the delay is permanent and, better yet, that tariffs of the past year will be removed entirely. But either way, imports will start to build up again soon as retailers prepare for the summer.” NRF estimates U.S. ports will handle 1.59 million 20-foot-long cargo containers or their equivalents in March. That would be a 3.2 percent increase from March 2018, but the lowest monthly level since April, it said.

Supply chain location changes are difficult and take time, so companies are turning to other ways to avoid or reduce Sections 301 and 232 tariffs, experts said at a March 7 Georgetown Law International Trade Update (see 1903070033) panel on the Trump administration and the supply chain. For steel and aluminum imports, there's been "a big uptake in foreign-trade zones," said Lynlee Brown, a senior manager at Ernst & Young. With Section 301, companies are using drawback, and after a recent CMS message, they may be taking advantage more often of substitution drawback. But the best bang for the buck, Brown said, is in customs valuation. Companies are making changes there not only because of Section 301, but also because of the administration's tax reform.

General Electric’s trade policy director doesn’t buy the conventional wisdom that it’s too hard for U.S. companies to source goods from countries other than China to escape the Trump administration’s Section 301 tariffs on Chinese goods, he said Tuesday. “Supply chains are actually kind of flexible," Drew Quinn told an International Trade Association workshop on Asia. He conceded he agrees with those who argue not many countries of origin can match the skills or scale found in China. Legislation introduced last week in the House (HR-1452) and Senate (S-577) to mandate an exclusion process for the List 3 tariffs that took effect Sept. 24 would grant exemptions to goods “not commercially available” outside China, or not produced outside China ”at a cost-competitive price at commercial scale,” as International Trade Commission data would define that (see 1903010031). GE hasn’t heard back from the Office of the U.S. Trade Representative about any of the 25 exclusion requests it made to exempt power, aviation and healthcare goods from the List 1 tariffs, said Quinn, a former deputy USTR. He worries that only List 3 tariffs would be lifted in a U.S.-China trade deal, he said: "We hope that List 1's 25 percent tariffs does not become the new normal."