The U.S. Trade Representative on Dec. 2 issued a list of 63 subheadings that may face tariffs of up to 100 percent when imported from France in retaliation for that country’s digital services tax. The proposed list, which includes goods of chapters 4, 33, 34, 42, 69 and 73 of the tariff schedule, comes as a result of the agency’s finding that the French tax restricts U.S. comments and violates Section 301. Comments on the proposed tariffs are due to USTR by Jan. 6, and a hearing is scheduled for Jan. 7.
Section 301 (too broad)
September imports of smartphones and computer monitors from China spiked significantly from August, according to Census Bureau statistics accessed through the International Trade Commission’s DataWeb tool. The surge was likely evidence of importers’ rush to beat the 15 percent List 4B Section 301 tariffs scheduled to take effect Dec. 15 on those products.
Dairy license holders’ DAIRIES accounts are not automatically being decremented for entries subject to Section 301 tariffs on goods from the European Union, the Cheese Importers Association of America said, citing the Foreign Agricultural Service. “In order to resolve this issue, license holders should direct their brokers to contact CBP at HQQUOTA@cbp.dhs.gov to have CBP manually post the affected entries in the quota system and have the entries reflected in the DAIRIES system,” CIAA said. “Brokers should be prepared to share the following information with CBP about affected entries: Entry Number, Line Number, License Number, CO Origin, Quantity, and HTS Number.” CBP sent out a CSMS message on the issue Nov. 6 (see 1911060009).
U.S. importers sourcing smart speakers, Bluetooth devices, smartwatches and fitness trackers from China filed the most List 4A Section 301 tariff exclusion requests of any consumer tech category through Nov. 27 since the Office of U.S. Trade Representative began accepting the requests Oct. 31, the public docket shows. The broad assortment of goods imported under the 8517.62.0090 of the Harmonized Tariff Schedule of the U.S. had the widest tariff exposure of any consumer tech product on List 4A, according to an International Trade Today analysis of Census Bureau statistics accessed through the International Trade Commission’s DataWeb tool.
When tariffs on their entire product line rose to 25 percent, small bike companies were faced with difficult decisions on raising prices and reducing staff. For Mehdi Farsi, co-founder of State Bicycle Co., a 10-year-old firm in Arizona, the financial burden meant he ended free shipping for online customers, then raised the price of the second-highest seller from $449 to $459. Shipping usually cost the company between $25 and $50, depending on the distance. He also didn't replace one person who left the company, and laid off one worker. Currently, including the owners, there are 15 workers, a couple of whom work only part time.
The Office of the U.S. Trade Representative announced that it will release a report from its Section 301 investigation on France's Digital Services Tax on Dec. 2. The Nov. 27 press release said that its recommendation of how to respond to the DST will be made at that time. Trade groups, companies and think tanks submitted comments and testified last summer about their problems with the DST (see 1908140023), but several said that tariffs on French imports under Section 301 are not the way to fix the problem. Many of France's most identifiable exports to the U.S. are already targets of tariffs because of the Airbus dispute.
The Office of the U.S Trade Representative issued some new product exclusions from Section 301 tariffs on the third list of products from China, according to a pre-publication copy of a notice posted to the agency’s website Nov. 26. The product exclusions apply retroactively to Sept. 24, 2018, the date the tariffs on the third list took effect, and will remain in effect until Aug. 7, 2020. New subheading 9903.88.35 will be used for these products.
The Office of the U.S. Trade Representative issued a new set of product exclusions from the 25 percent Section 301 tariffs on goods from China. The exclusions include products from the third list of Section 301 goods. The new exclusions "are reflected in 32 specially prepared product descriptions, which cover 39 separate exclusion requests," according to the notice.
International Trade Today is providing readers with some of the top stories for Nov. 18-22 in case they were missed.
Best Buy is taking multiple steps to counter effects of tariffs, Chief Financial Officer Matt Bilunas said on a Nov. 26 earnings call. He said the retailer is bringing in products ahead of tariff implementation; making strategic decisions on vendor and SKU assortment; instituting promotional and pricing strategies and sourcing changes; and developing strategies with vendor partners. The most relevant tariffed categories for Best Buy for Section 301 List 4A products are TVs, headphones and smartwatches; and for List 4B products are computers, mobile phones and game consoles, Bilunas said.