CBP is now accepting claims for drawback on Section 301 duties on products from China, said John Leonard, executive director-trade policy and programs, on a conference call held Jan. 23 to discuss issues related to the ongoing federal government shutdown. The agency has fixed a bug in ACE that was preventing Section 301 drawback claims and is now able to begin processing, though the agency’s ability to resolve particular issues will be limited due to staffing issues caused by the ongoing shutdown, he said.

International Trade Today is providing readers with some of the top stories for Jan. 14-18 in case they were missed.

The National Retail Federation blasted trade legislation expected to have been introduced Thursday in the House that would grant broader presidential authority to raise U.S. tariffs on foreign goods. Rep. Sean Duffy, R-Wis., told Fox News Wednesday he planned to introduce the U.S. Reciprocal Trade Act to give President Donald Trump the “tools” necessary “to make sure that we’re not robbed anymore” on allegedly unfair tariff rates, he said. The EU slaps a 68 percent tariff on imported butter produced in Duffy's 7th congressional district in Wisconsin, while European butter enters the U.S. at only a 3.8 percent levy rate, he said. His legislation would move the U.S. “further away from a tariff war and brings us tariff peace,” he said. Duffy's plan now is to introduce the bill next week after he lands more co-sponsors, a spokesperson told us late Thursday. NRF Senior Vice President David French said Congress “should be working to protect local communities from an escalated trade war” brought on by the Trump administration’s Section 301 tariffs on Chinese imports and China’s retaliatory tariffs on U.S. goods. Duffy’s “misguided” legislation “would do the exact opposite, giving the executive branch limitless power to raise taxes in the form of tariffs,” said French. “Congress has already ceded far too much of its clear constitutional authority over tariffs, and we are witnessing the consequences unfold across the country. The idea that Congress would make matters even worse by further abdicating its role on trade policy is simply unconscionable.” CTA shares "similar concerns" as NRF about Duffy's legislation, emailed a spokesperson Thursday.

The Council of the European Union passed its negotiating directives for free trade talks with the U.S. on Jan. 18, and as expected, agriculture is not part of the scope. The EU also said it would require the lifting of the Section 232 tariffs on aluminum and steel before any deal is finalized. "These two proposed negotiating directives will enable the Commission to work on removing tariffs and non-tariff barriers to transatlantic trade in industrial goods, key goals of the July Joint Statement," EU Trade Commissioner Cecilia Malmstrom said.

More CBP scrutiny of first sale transactions has followed an increase in the use of first sale valuations in recent months, law firm Sandler Travis said in a blog post. The growth in first sale valuations, which allows importers to value goods at the price sold from a manufacturer to a middle man, is one result of the Section 301 tariffs on goods from China, the firm said. "At a time when volatility in trade policy has left some traditional methods of lowering costs unavailable and is threatening to eliminate others, importers are continuing to use the first sale rule to save millions of dollars in import duties each year," said the firm, which advertises its first sale services in the post.

Regulations.gov, the government website where businesses can see if other companies have objected to their tariff exclusion requests, went down Jan. 16. It's not clear how long it will take workers -- who have been affected by the partial federal government shutdown -- to get the issues resolved and get the site back online. A spokeswoman for the Office of the U.S. Trade Representative said the agency continues to work on exclusion requests on items on the first two tranches of the Section 301 tariffs list, and that "the time period to comment will be extended as applicable" because of the outage.

A legislative effort from Rep. Sean Duffy, R-Wis., to expand the president's ability to impose new tariffs (see 1901160012) is a troubling prospect for retailers, according to the National Retail Federation. NRF Senior Vice President for Government Relations David French said Congress “should be working to protect local communities from an escalated trade war” brought on by the Trump administration’s Section 301 tariffs on Chinese imports and China’s retaliatory tariffs on U.S. goods. Duffy’s “misguided” legislation “would do the exact opposite, giving the executive branch limitless power to raise taxes in the form of tariffs,” French said. “Congress has already ceded far too much of its clear constitutional authority over tariffs, and we are witnessing the consequences unfold across the country. The idea that Congress would make matters even worse by further abdicating its role on trade policy is simply unconscionable.” Duffy's bill would give the president the ability to raise U.S. tariffs to match other countries' levels without having to justify the move through a safeguard or national security investigation.

A Chinese foreign ministry spokesperson wouldn’t confirm reports that Vice Premier Liu He will travel to Washington Jan. 30-31 to continue talks with the Trump administration on a comprehensive trade agreement. Reaching an agreement by March 2 could forestall administration plans to hike Section 301 tariffs to 25 percent on $200 billion in Chinese imports (see 1901100008). The U.S. and China “are now in close communication,” said the spokesperson Wednesday. “The two sides are making positive efforts” to reach an agreement “that is mutually beneficial and win-win through trade negotiations and consultations,” she said. The Office of the U.S. Trade Representative didn't comment.

Eswar Prasad, a senior trade professor at Cornell University and the former head of the International Monetary Fund's China Division, expects that "some sort of compromise" will be reached with China just before the March 1 deadline for the tariff rate hike, and that after China accedes to certain U.S. demands, "at least they're going to back off additional hostilities." Prasad, speaking at the National Economists Club Jan. 17, said he expects all the tariffs on China to stay in place, as well as the Chinese retaliation -- though he does expect increased purchases of American soybeans to be part of the package.

Measures of compliance among steel products importers are down since the imposition of sections 301 and 232 tariffs, said the American Institute for International Steel’s Customs Committee in its 2018 year-end report. CBP told the trade association that compliance measured by the letter of the law for imports in Harmonized Tariff Schedule chapters 72 and 73 was down to 96.46 percent in fiscal year 2018, and down to 97.8 percent when measured by major trade discrepancies, CBP told AIIS, the report said. “Issues with Section 232 and Section 301 entries presumably contributed to the reductions,” the report said.