The Office of the U.S. Trade Representative has made its way through 7,818 requests for exclusions from the first tranche of Section 301 tariffs, and has asked CBP to determine if it is practical to admit the products at the border that are covered by 238 requests. Many of the requests that are in this provisional status cover the same HTS codes. The agency is tracking where requests are in the process through spreadsheets on its website, and marks those that are worthy of an exclusion as "stage 3." But those exclusions are provisional until the customs authority says they're administrable.
Section 301 (too broad)
China and trade war watchers were aflutter after President Donald Trump and Chinese President Xi Jinping had a phone call Nov. 1 and both sides sounded upbeat. Trump tweeted that it was "a long and very good conversation," mostly about trade, and that "those discussions are moving along nicely." In China, the readout from Xinhua emphasized how seriously the U.S. it taking its preparation for the in-person meeting later this month in Argentina, and said that Trump said, "it is very important for the heads of state of the United States and China to keep frequent, direct communication.... Trump also said he attaches importance to a good relationship with Xi and is willing to extend, through Xi, his good wishes to the Chinese people."
The International Trade Commission issued Revision 14 to the 2018 Harmonized Tariff Schedule, implementing the removal of Generalized System of Preferences benefits for a lengthy list of products from certain countries as a result of the 2017-18 GSP review (see 1810300031). Changes include the replacement of special program indicator “A” with “A*” -- indicating GSP eligibility only when imported from certain countries -- for subheadings that are now GSP-ineligible when imported from countries that exceeded annual import limits. These ineligible country-product pairs are added to the burgeoning General Note 4(d) of the tariff schedule, which is now over twice as long as it was in previous years’ tariff schedules.
The Consumer Technology Association has hired Akin Gump to draft a complaint, which, if pursued in the Court of International Trade, would seek an injunction blocking the Section 301 tariffs on $200 billion worth of Chinese imports before the duties are scheduled to rise to 25 percent on Jan 1., said several sources familiar with CTA’s plans. The association is shopping the draft around with other anti-tariff trade groups, seeking their legal and financial backing to support a court challenge, the sources said.
The Retail Industry Leaders Association sent President Donald Trump a letter praising his plan to meet with the Chinese president, and said that raising tariffs on nearly $200 billion in Chinese imports to 25 percent on Jan. 1 would dampen the economy. The organization said it supports "targeted trade actions against intellectual property theft, unfair dumping or subsidies," but not the broad application of Section 301 tariffs. Direct engagement with President Xi "is vital to resolving this trade dispute and ensuring it does not undermine our nation’s record-setting economic expansion and hurt American families," RILA President Sandra Kennedy wrote Oct 24. Meanwhile, The Wall Street Journal on Oct. 25 reported that the U.S. won't engage in trade talks with China until the country's government presents a proposal to address U.S. intellectual property concerns.
Arris emphasized “serious concerns” in meetings with aides to Federal Communications Commission Commissioners Mike O’Rielly and Jessica Rosenworcel about “harmful effects” the third tranche of Section 301 tariffs will have on “U.S. 5G leadership" and broadband deployment, it said in a filing posted Oct. 23. The 10 percent tariffs took effect Sept. 24 on “core broadband infrastructure and networking equipment and other critical inputs for wireless and wireline connectivity, as well as consumer broadband equipment,” and “automatically increase” to 25 percent Jan. 1, Arris said. “At just the 10 percent level,” Arris estimates the fees will impose $200 million a year “in additional costs on its equipment and devices.” The levies already have had “serious business implications,” noting that an analyst downgraded Arris stock because of the higher expected tariff-related costs, the filing said. The tariffs “risk slowing deployment of 5G and broadband more generally, diverting resources away from 5G and other broadband research and development efforts,” it said. Arris also noted in the meeting the need for an “exclusion process” for the third tranche of duties to give affected companies “additional time to make adjustments to their operations and mitigate the harms.”
PALM SPRINGS, Calif. -- CBP is increasing staffing levels at its Office of Regulatory Audit to keep up with “the revenue on the table” from the recent imposition of new tariffs and the Trump administration’s push for more enforcement, said Tom Jesukiewicz, field director of regulatory audit’s Los Angeles office, at the Western Cargo Conference on Oct. 20.
DALLAS -- Audio companies are bracing for the impact of the 10 percent Section 301 tariffs on Chinese imports that took effect a month ago, and are holding out hope that the Jan. 1 increase to 25 percent won't come to pass, vendors said at the fall meeting of the Home Technology Specialists of America. JL Audio, which sells subwoofers for the home market and speakers, subs and amplifiers for the marine and automotive spaces, is raising prices 6 percent on Nov. 15 on its home product line, said Doug Henderson, senior vice president-home audio.
PALM SPRINGS, Calif. -- Piecemeal bond increases to satisfy CBP insufficiency notices won’t be enough to dig importers out of the hole created by recently imposed sections 232 and 301 tariffs on aluminum and steel and products from China, respectively, said Dave Jordan of Roanoke Trade on Oct. 20. While CBP looks at duties paid over the past 12 months to set bond requirements, importers have likely seen their duty liability spike in the past few months since the tariffs were imposed, and will “probably end up with an insufficiency letter again in a few months” as more time passes with the tariffs in effect, he said, speaking at the Western Cargo Conference. Importers should do their own calculations, taking the month with the highest amount of duties paid, multiplying that by 12 months and setting a bond at 10 percent of that amount. For example, an importer that averaged $500,000 in duties paid over the last two months should extrapolate that to $6 million over the year and get a bond for $600,000. Some importers' products covered by multiple trade remedies could see bond requirements rise substantially, Jordan said. One of his clients, an importer of solar panels subject to Section 201 safeguards and Section 301 tariffs, started with an $800,000 bond that’s now up to $11 million, he said. CBP has urged importers to be “proactive” in setting their bond amounts (see 1808210029), given the recent spike in insufficiency notices (see 1807260011).
International Trade Today is providing readers with some of the top stories for Oct. 15-19 in case they were missed.