Trade News Updates
By Margaret Lange
As what seems to the trend these days, February was another active month for Trade. These tariff increases, exclusions, and country designations have significant current and future impact on sourcing and sales decisions for U.S. Importers and Exporters.
USTR Updates the List of “Developing Countries” for Countervailing (CV) Investigations
On February 10th, the United States Trade Representative (USTR) published a notice updating its list of countries designated as a “developing” or “least-developed” country in relation to the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). Under the SCM Agreement, WTO member countries that have not yet reached the status of a developed country are entitled to special treatment for purposes of countervailing measures. Designated countries are subject to different thresholds for purposes of determining whether countervailable subsidies are de minimis and whether import volumes are negligible. Six countries including Brazil, India, Indonesia, Malaysia, Thailand, and Vietnam are now designated as Developed countries and are no longer eligible for the de minimis standard in countervailing investigations.
China Reduced Tariffs on $75 Billion of U.S. Goods
As part of the “Phase One” deal, China has reduced tariffs on imports of $75 Billion of certain U.S. goods that were subject to Section 301 retaliatory tariffs. The Chinese Ministry of Economy confirmed the reduction of tariffs on specific U.S. goods to 5% from 10%, and other products will drop to 2.5% from 5%. The tariff cut took place on February 14th, the same day the U.S. lowered tariffs on List 4A tariffs to 7.5% from 15%.
New Section 301 China Tariff Exclusions Granted as Others are Set to Expire
Expiring Exclusions – Product exclusions granted from the first tranche of Section 301 tariffs on $34 billion in Chinese goods are starting to expire. The first list expired on December 28, 2019, with only six products granted extensions. Now the second list of product exclusions expire on March 25, 2020, and the third list is set to expire on April 18, 2020. The USTR has announced the opening of a comment periods for interested parties to request an extension of those exclusions, for up to 12 months.
- The comment period for list two exclusions, expiring on March 25, 2020, opened on January 15, 2020, and closed on February 15, 2020. The December 30, 2019, Federal Register notice provided the instructions for submitting comments for possible extension of particular exclusions. The USTR has not yet advised of any approved exclusion extensions.
- The comment period for list three exclusions, expiring on April 18, 2020, will open on February 16, 2020, and will close on March 16, 2020. The February 5, 2020, Federal Register notice provides the instructions for submitting comments for possible extension of particular exclusions.
New Exclusions February 5, 2020 – The USTR posted product exclusions for goods subject to the third tranche of Section 301 Tariffs on goods from China. The exclusions include two 10-digit HTS subheadings, which cover 52 requests, and 117 specially prepared product descriptions, which cover 156 separate exclusion requests. The exclusions are retroactive for entries made on or after September 24, 2018, and will expire on August 7, 2020.
New Exclusions February 11, 2020 – The USTR issued four new exclusions for products listed on the first tranche of Section 301 tariffs on goods from China. The new exclusions include four new product descriptions. The exclusions apply retroactively to July 6, 2018, and will expire on Oct. 2, 2020. The notice also adjusted tariff subheadings and made other “technical amendments” to previously issued exclusions.
New Exclusions February 20, 2020 – The USTR issued new product exclusions from the third tranche of Section 301 tariffs on goods from China. The new exclusions include one 10-digit HTSUS subheading (6505.00.8015), which covers 6 requests, and “46 specially prepared product descriptions, which cover 61 exclusion requests”. The product exclusions apply retroactively to Sept. 24, 2018, the date the third set of tariffs took effect. The exclusions will remain in effect until Aug. 7, 2020.
USTR Revises Section 301 Action Against EU in Airbus Case
On October 2, 2019, the United States won the largest award in WTO history when it was authorized to take countermeasures on $7.5 billion in goods after a victory in its unfair trade practices case against the European Union, France, Germany, Spain, and the United Kingdom. Pursuant to U.S. Statute, the United States Trade Representative (USTR) has issued a notice making adjustments to its WTO-authorized retaliation action, which was implemented on October 18, 2019.
Effective March 18, 2020, the United States is increasing the additional duty rate imposed on aircraft imported from the EU to 15% from 10%, and making certain other minor modifications. For a full list of the modifications, click here.