Trade News Updates – February 2021
Even with a change of administration, January has been a very busy month for trade.
Revision of Section 301 Action related to the WTO Large Civil Aircraft Dispute
On January 6, 2021, the USTR published a Federal Register Notice 86 FR 674, announcing additional 15% duties on certain parts of large civil aircraft of France and Germany, and 25% duties on other products of France and Germany. The modifications took effect for products entered for consumption or withdrawn from warehouse for consumption on January 12, 2021. CBP provided guidance in CSMS #45453497.
Suspension of Section 301 Tariff Action in France’s Digital Service Tax (DST) Investigation
On January 7, 2021, the U.S. Trade Representative (USTR) announced the suspension of the scheduled Section 301 tariff action related to France’s DST until further notice. The additional duties on products of France were scheduled to take effect on January 6, 2021. See the USTR notice here.
USTR Findings on Section 301 Investigation of Vietnam’s Acts, Policies, and Practices Related to Currency Valuation
On January 15th, The U.S. Trade Representative issued a report of the findings in the Section 301 investigation of Vietnam’s acts, policies, and practices related to currency valuation. The report determined that Vietnam’s acts, policies, and practices are unreasonable and burden or restrict U.S. commerce. However, USTR is not taking any specific actions in connection with the findings at this time but will continue to evaluate all available options. The U.S. Trade Representative Robert E. Lighthizer stated, “I hope that the United States and Vietnam can find a path for addressing our concerns.
Section 301 Digital Service Tax (DST) Determination – Multiple Countries
In the first two weeks of January, the USTR announced their findings of the Digital Services Tax investigations of India, Italy, Turkey, Austria, Spain, and the UK. In each of these investigations, the USTR determined that the DST implemented, or to be implemented, by each country is unreasonable or discriminatory and burdens or restricts U.S. commerce. In particular, these taxes target large U.S. technology companies. The USTR did not take Section 301 action in hopes that multilateral solutions can be reached. The actions to be taken will now be determined by the Biden Administration. Information on the DST investigations and determination can be found on the USTR website here.
The USTR also provided a status update on the DST Investigation of Brazil, the Czech Republic, Indonesia, and the European Union. See the USTR update here.
USMCA Implementing Instructions Amended
On January 13, 2021, U.S. Customs and Border Protection (CBP) published the USMCA Implementing Instructions Addendum. The Addendum covers the changes that were flagged for the trade in CBP’s message (CSMS #45309245), including refunds of MPF in post-entry USMCA claims, treatment of FTZs, the end of CBP’s restrained enforcement of the USMCA, and clarification on the treatment of used automotive goods.
Aluminum Import License Requirement Delayed
In December, the Department of Commerce published its final rule adopting the Aluminum Import Monitoring and Analysis System (AIM) for Importers to obtain the aluminum import license that was set to be required on January 25, 2021. However, with the change of administration, Commerce has delayed the requirement until March 29, 2021. The Commerce notice also provided details for the trade to submit comments related to the final rule.
US Agreement with European Union
Pursuant to the agreement the United States entered into with the European Union regarding tariff barriers with the EU, the Trump Administration modified the duty rates for six tariff items identified in Annex II of December 29, 2020, Federal Register Notice.
The six tariff subheadings include 1604.20.05, 3214.90.50, 3601.00.00, 7013.41.50, 9613.11.00, and 9613.90.80. These duty reductions are retroactive to August 1, 2020. The notice also listed additional duty reductions on five tariff subheadings (1604.20.05, 3214.90.50, 3601.00.00, 9613.11.00, and 9613.90.80) for goods entered, or withdrawn from warehouse, for consumption effective August 1, 2021.
Customs and Border Protection (CBP) Statistics
Per CBP Trade Statistics, CBP collected $74.4 Billion in duties in fiscal year 2020, about a 3% increase over 2019. Entry summaries actually decreased from 35.5 million in 2019 to 32.8 million in 2020. And import value decreased from $2.67 trillion to $2.42 trillion. The main reason for the increase in duties is a result of the continued trade remedies including Section 301, 232 and 201.
As of January 21, 2021, the total duties collected, since the implementation of each remedy, is over $89 Billion.
|TRADE REMEDY ENFORCEMENT||IMPORTED PRODUCTS||TOTAL DUTIES ASSESSED1|
|Section 201 Duty Assessment|
|Washing Machine Parts3||$2,305,854|
|Section 232 Duty Assessment||Aluminum5||$2,345,097,887|
|Section 301 Duty Assessment||China7||$75,870,055,101|