The Office of the U.S. Trade Representative could be even tougher in its review of extension requests for Section 301 tariff exclusions (see 1910280059) than it had been previously, Sidley Austin lawyer Ted Murphy said in a blog post. "Any company that is relying on an approved product exclusion from the first batch of approvals should consider filing comments with the USTR," he said. "We expect that the bar for securing a renewal/extension may well be higher than it was to secure the original approval (i.e., the need to answer the question why you still need the exclusion a year later). Companies relying on other approved product exclusions (those not from the first batch) also should watch this process closely." Although the possibility of exclusions is welcome news, " it also means that the Administration believes that there is at least a meaningful chance that the U.S.-China trade war will carry on and that the Section 301 duties will remain in place well into 2020," he said.
Section 301 (too broad)
International Trade Today is providing readers with some of the top stories for Oct. 21-25 in case they were missed.
Timing of List 4B Section 301 tariffs, due to take effect Dec. 15 on smartphones, laptops, tablets and other goods, “could not have been worse" for a consumer tech sector already facing product innovation and demand pressures, Futuresource Consulting blogged. Tech companies need to be agile and resilient as global trade and geopolitical tensions have disrupted technology supply chains that were optimized for long-term cost efficiencies, the researcher said. Companies have to optimize for the disruptions, while using trade uncertainties as an opportunity to create a strategic competitive advantage, it said. Global consumer electronics supply chains are at increased risk of “fracturing” as a result of the U.S.-China trade dispute, said Futuresource, which sees a “short-term fix” as a survival strategy, allowing companies to re-evaluate classification and product routing of key components. Long term, tech firms should consider a “China Plus One” strategy whereby companies active in China augment existing investments with a second facility to diversify risk, cut costs and reduce over-reliance on China. That’s beginning to happen, with some companies announcing they’re transferring production facilities to Vietnam, for example, it said.
The International Trade Commission has issued Revision 15 to the 2019 Harmonized Tariff Schedule. The only substantive change from the previous HTS edition is the removal of an exemption from solar cells safeguard duties for double-sided solar panels, as announced by the Office of the U.S. Trade Representative in early October (see 1910080054).
CBP affirmed its position on the use of substantial transformation as the standard for determining country of origin for goods subject to Section 301 tariffs and NAFTA rules, it said in ruling HQ H305370. CBP said another recent ruling mistakenly said that computer server cabinets assembled in Mexico were not subject to the Section 301 tariffs when in fact they are.
A domestic manufacturer and labor union filed petitions on Oct. 22 with the Commerce Department and the International Trade Commission requesting new antidumping duty investigations on forged steel fittings from India and South Korea, and new countervailing duties on the same product from India. Commerce will now decide whether to begin AD/CVD investigations on forged steel fittings that could eventually result in the assessment of AD/CV duties. The petition was filed by Bonney Forge Corporation and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (USW).
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 include " 83 specially prepared product descriptions, which cover 95 separate exclusion requests", according to the notice.
CBP has assessed about $43 billion in duties under the major trade remedies started during the Trump administration as of Oct. 2, according to CBP's trade statistics page. That includes $34 billion in duties from the Section 301 tariffs on goods from China, up around $3 billion from about a month ago. The assessed tariffs under Section 301 now include the 15 percent tariffs that took effect on Sept. 1 (see 1908270066). CBP also has assessed about $6.3 billion under the Section 232 tariffs on steel and $1.8 billion under tariffs on aluminum. The Section 201 trade remedies on washing machines, washing machine parts and solar cells (see 1801230052), imposed Jan. 23, 2018, account for $1.1 billion in assessed tariffs.
IRobot’s U.S. sales declined 7 percent in Q3 because growth “remained subdued as the direct and indirect impacts” of the 25 percent List 3 Section 301 tariffs “weighed heavily on consumers, retailers and suppliers,” CEO Colin Angle said on an Oct. 23 call. IRobot price hikes in late July resulted in “suboptimal sellthrough” in August and September, prompting the vendor to roll back pricing to “pre-tariff levels” earlier in October, he said.
CBP added the ability in ACE for importers to file entries with recently excluded goods in the first tranche of Section 301 tariffs on Oct. 8, it said in a CSMS messages. For the first tranche exclusions, filers of imported products that were granted an exclusion (see 1909300041) should report the regular Chapters 84, 85, 88 and 90 Harmonized Tariff Schedule number, as well as subheading 9903.88.19. “Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when" subheading 9903.88.19 is submitted, CBP said.