UPS, “like most other U.S. multinationals,” advocates for “fair and balanced trade,” CEO David Abney said on a Q1 earnings call April 25. The China-U.S. trade “uncertainty” is “prompting softer industry forecasts” in the Asia-Pacific region, he said. “We certainly encourage leaders of the two countries to find solutions that support increased two-way trade,” and also “assuring that many U.S. companies have access to export to China,” he said. Some UPS customers “have adjusted their supply chain” to mitigate the higher costs of the Section 301 tariffs and retaliatory Chinese duties, and to “adapt to changing trade dynamics,” he said. China economically “is still strong, maybe not as strong as in previous years,” he said. There are “a lot of developments” taking place in two-way trade between the U.S. and China, but also between “China and the rest of the world,” he said. That “sometimes gets lost in the China-U.S. discussions,” he said. “We think it gives us plenty of opportunities to focus and to apply our strategic imperatives” in e-commerce, he said. “We feel good about the economy for the rest of the year.”
In the April 25 edition of the Official Journal of the European Union the following trade-related notices were posted:
The European Commission on April 24 adopted a proposal to create a new exemption from excise and value added tax for supplies for armed forces of European Union member states that are taking part in a European defense effort, it said in a press release. The newly adopted exemption mirrors one currently in place for EU armed forces participating in North Atlantic Treaty Organization defense operations, it said. “Under the new rules, armed forces deployed outside their own Member State would not pay VAT or excise duty to other Member States when they take part in a NATO defence effort or in a defence activity under the Common Security and Defence Policy (CSDP). By aligning the indirect tax treatment of both defence efforts, the initiative acknowledges the growing importance of the CSDP and military mobility which require supplies such as training materials, accommodation, provision of food and fuel -- all in principle currently subject to VAT,” the commission said.
Canada and Colombia were removed from the priority watch list for intellectual property violations, and Tajikistan moved off the watch list, according to the Office of the U.S. Trade Representative's annual review of countries' policies on patents, trade secrets, counterfeits and piracy. Saudi Arabia was moved up to the priority watch list because of deteriorating conditions there, including "rampant satellite and online piracy," a USTR official said April 25.
Four Chinese nationals were arrested in Singapore after they concealed alcohol shipments from China as soy sauce and did not pay tariffs, according to an April 23 notice from Singapore Customs. The men were involved in a scheme that imported more than 9,000 bottles of “duty-unpaid liquor” packed in more than 600 boxes, the notice said. The importers stored the boxes in an industrial building before Customs officers checked the goods and discovered the smuggling scheme, according to the notice. Singapore Customs said the men evaded about $186,000 worth of duties and about $17,000 worth of the country’s Goods and Services Tax. Importers who fail to pay taxes and duties can be fined “up to 40 times the amount” evaded and face a maximum six-year prison sentence, the notice said. “We will spare no effort in going after sellers as well as buyers of duty-unpaid liquor,” Assistant Director-General of Customs Yeo Sew Meng said in a statement.
China’s General Administration of Customs (GAC) issued notices announcing changes to its outward processing program and simplified entry and exit for certain goods in its comprehensive bonded zones, according to KPMG’s monthly China customs update. The agency also announced the expansion of a pilot program for TIR carnets, and Shanghai customs announced that export declarations will now be accepted as part of a pilot for advance declaration and expedited processing. Highlights are as follows:
The United Kingdom hopes to reach a deal with South Korea to maintain the effects of the European Union-South Korea Free Trade Agreement should the U.K. leave the EU with no transition deal, the U.K. Department for International Trade (DIT) said in guidance issued April 23. “The UK is seeking to agree arrangements with South Korea to ensure trade continues with minimal disruption after the UK leaves the EU,” with “minimal changes to tariffs and quotas, even if the UK leaves the EU without a deal,” the guidance said. If no deal is reached, trade between the U.K. and South Korea will be subject to World Trade Organization most-favored nation rates, it said.
Russia is putting in place additional sanctions against Ukraine, including new bans on imports and exports between the two countries, according to a blog post from Baker McKenzie. Effective April 18, Russia is adding to the list of goods that cannot be imported into Russia from the Ukraine tariff headings and subheadings covering paper products, apparel and footwear, metal products and machinery, among other things, according to an unofficial translation of the Russian government’s notice. Russia is also immediately adding tariff provisions covering certain oil and petroleum products and chemicals to the list of goods prohibited for export to the Ukraine. Effective June 1, Russia also is adding goods to a list of products that cannot be exported from Russia to Ukraine without a permit, including coal and more petroleum products.
The Mexican Confederation of Customs Broker Associations issued a circular April 22 to clarify value-added tax treatment in Mexico for patent medicines. Based on a review of the applicable laws and regulations prompted by confusion among some CAAAREM members, the association said that imports of merchandise considered by tax and health legislation to be patent medicines are eligible for a zero percent VAT rate. Merchandise classifiable in Chapter 30 of the Mexican tariff schedule, that are covered by Article 7 of the Mexican VAT regulations, have a VAT rate of zero percent at the time they are imported into Mexican territory, said the circular, which was posted by the trade consultancy AJR Comercio Exterior.
Mexico recently amended its foreign trade regulations to add new tariff subheadings to its lists of products subject to import and export permitting and compliance with product standards, in a notice published in the April 18 Diario Oficial. The new subheadings, which mostly cover fibers, textiles, apparel and footwear of tariff schedule chapters 53-64, include those added in a notice amending the Mexican tariff schedule issued April 10, according to a circular issued by the Mexican Confederation of Customs Broker Associations April 23 that was posted by the trade consultancy AJR Comercio Exterior. The new notice takes effect May 6, though import automatic permits for products of any subheadings that were eliminated in the notice will remain in effect for the duration of the permit's original validity, and any import declarations related to such permits should include the original subheading listed on the permit, CAAAREM said.