Industry News

Trade News Updates

By Margaret Lange

As the world adjust to the unprecedented COVID-19 pandemic, over the last several weeks, the trade has continued to see USTR actions, Presidential Orders, USMCA updates, and a new phase of the Lacey Act Enforcement. These actions have significant current and future impact to sourcing and sales decisions for U.S. Importers and Exporters.

Section 301 Extensions, New Exclusions and Expirations

Exclusion Extensions – Following public comment periods, the USTR has granted extensions for expiring product exclusions.

  • March 19th – The USTR granted eleven (11) product exclusion extensions to the second list of exclusions that expired on March 25, 2020.  The granted extensions will apply as of March 25, 2020, and will extend for one year; expiring on March 25, 2021.
  • April 7thThe U.S. Trade Representative (USTR) granted one-year extensions for eight (8) product exclusion from the additional Section 301 duties on $34 billion in goods from China. The extensions apply to the third list of granted product exclusions that are set to expire on April 18, 2020.  The USTR notice provides the specific product descriptions for the eight products that have been granted extensions.

New Exclusions Granted – The United States Trade Representative (USTR) continues to grant product exclusions from the Section 301 tariffs, including medical-related products to help fight COVID-19.

  • March 10thth – The U.S. Trade Representative (USTR) announced the first list of granted exclusions for List 4A. The exclusions include eight (8) 10-digit HTS subheadings, which cover 59 separate exclusion requests. The exclusions cover a wide range of medical industry products.
  • March 16th – The USTR granted five (5) 10-digit product exclusions from the Tranche 3. The exclusions cover 75 separate exclusion requests for medical-related products.
  • March 17th – The USTR granted a second list of nineteen (19) specially prepared product description exclusions from Tranche 4A. Again, these exclusions are for medical-related products and cover 39 separate exclusion requests.
  • March 26th – The USTR granted additional product exclusions from the third tranche of Section 301 tariffs. The list includes one (1) 10-digit HTS subheading and 176 specially prepared product descriptions, covering 202 separate exclusion requests.
  • April 22nd – The USTR issued another list of product exclusions from the third tranche of Section 301 tariffs. The new exclusions include one (1) 10-digit HTSUS subheading (8424.90.9080), which covers 20 separate exclusion requests, and 107 specially prepared product descriptions, which cover 157 separate exclusion requests.
  • May 4th – The USTR granted the 13th list of product exclusions for the third tranche of Section 301 tariffs. The exclusions include two (2) 10-digit HTSUS subheadings, which cover 15 separate exclusion requests, and 144 specially prepared product descriptions, which cover 170 separate exclusion requests. The exclusions are retroactive to September 24, 2018 and will expire August 7, 2020.

Expiring Exclusions – The USTR announced the opening of a comment periods for exclusions that are set to expire in May, June and July.

  • Exclusions Expiring May 14, 2020 – The fourth list of granted product exclusions, from the first tranche of additional tariffs on $34 billion in Chinese goods, is set to expire on May 14, 2020. The USTR announced the opening of a comment period for interested parties to request extension, for up to 12 months, of the granted exclusions.  The comment period opened on March 12, 2020 and will closed on April 12th.
  • Exclusions Expiring June 4, 2020 – The fifth list of granted product exclusions, from the first tranche of additional tariffs on $34 billion in Chinese goods, is set to expire on June 5, 2020. The March 20th Federal Register Notice provides details for filing comments.
  • Exclusions Expiring July 9, 2020 – On April 27th, the USTR announced the opening of a comment period for interested parties to request extensions, for up to 12 months, for the sixth list of granted product exclusions, from the first tranche of additional tariffs on $34 billion in Chinese goods, which is set to expire on July 9, 2020.
  • Exclusions Expiring July 31, 2020 – On April 27th, the USTR announced the opening of a comment period for interested parties to request extensions, for up to 12 months, for the first list of product exclusions from the second tranche of additional tariffs on $16 billion in Chinese goods, which is set to expire on July 31, 2020.
  • Exclusions Expiring August 7, 2020 – On May 1st, the USTR announced the opening of a comment period for extension of the first eleven (11) lists of granted product exclusions from the third tranche of additional tariffs on $200 billion in Chinese goods, which are set to expire on August, 7th.

The USTR notices provide detailed instructions, and the form, for submitting comments for possible extensions of particular exclusions. A complete list of product exclusions can be found here.

Requests for Comments – Additional Medical-related Product Exclusions
In light of ongoing COVID-19 developments, the USTR published a request in the Federal Register for public comments on possible further modifications to remove duties for additional medical-care products. The comment period will be open until June 25, 2020, and may be extended as appropriate.

Trump Authorizes 90 Day Deferral for Payment of Certain Duties, Taxes and Fees

On Sunday evening, April 19th, in a Presidential Executive Order, President Trump authorized the temporary extension of deadlines for payment of estimated duties, taxes and fees on goods imported in March and April. Customs and Border Protection (CBP) published a temporary final rule with details regarding eligibility and two CSMS messages with instructions for filing entries and submitting payments (CSMS#42423171 and CSMS#42421561). The extension does not apply to entry of products subject to trade remedies (Section 301, 232 or 201) or Antidumping/Countervailing duties.  Importers must demonstrate Significant Financial Hardship to qualify.

USMCA Entry into Force July 1, 2020

On April 24th, the USTR announced that the United State-Mexico-Canada Agreement (USMCS) will enter into force on July 1, 2020. Customs and Border Protection (CBP) advised in a recent CSMS #42429822, that Title 19, Code of Federal Regulations 182 (19 CFR 182) and the Harmonized Tariff Schedule (HTS) are being amended to include the USMCA Regulations and Appendix. In the CSMS, CBP stated that until the USMCA enters into force, the North American Free Trade Agreement (NAFTA) requirements remains in effect.” Links to Implementing Instructions and USMCA Final Text are included in the CSMS #42429822.

Phase Six of Lacey Act Enforcement

The Department of Agriculture, Animal and Plant Health Inspection Service (APHIS), announced, in the Federal Register, that it will begin the sixth phase of the Lacey Act import declaration requirements. The new phase of enforcement includes 29 new Harmonized Tariff Schedule (HTS) codes including Essential Oils (Chap. 33); suitcases, trunks and cases of wood or lined with wood (Chap. 42); oriented strand board, crates, boxes and pallets of wood (Chap. 44), and musical instruments and their parts (Chap. 92).

The Lacey Act declaration (PPQ Form 505) will be required on all imports of these goods starting on the proposed date of October 1, 2020.

The Federal Register notice also provides information for submitting comments related to this phase of the Lacey Act enforcement. The comment period is open until June 1, 2020.  Following the comment period, APHIS will publish a final list of product subject to the sixth phase of the Lacey Act.

Click here for more information on the Lacey Act.

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