Trade News Updates
By Margaret Lange
August was another active month with U.S. Trade Representative (USTR) actions including updates to the EU Section 301 tariffs and new and extended China Section 301 exclusions. In addition, new marking and reporting requirements were defined for goods from Hong Kong.
Hong Kong Origin Marking and Section 301 Duties
Due to the July 14th Presidential Executive Order (EO), ending Hong Kong’s special trade status with the U.S., goods manufactured and imported from Hong Kong will now be required to be marked as “Made In China”. The August 11th Federal Register Notice advised that the new marking rules are applicable as of July 29th, with a granted transition period to September 25, 2020, for all importers to implement the new marking requirements. However, Customs and Border Protection (CBP) published guidance (CSMS#43729326) on an extension of 45 days, making November 9, 2020 the required date for which all goods entered or withdrawn from warehouse must be marked as “Made China”. Failure to properly mark the origin as China will result in a Customs’ hold until the goods are properly marked, per the Code of Federal Regulations (CFR19, §134.3), or CBP will issues a request for redelivery to CBP per CFR19 §141.113). Failure to properly remark or redeliver the goods to CBP Custody will result in liquidated damages/penalties.
On a good note, CBP published Frequently Asked Questions (FAQ) on guidance for marking of goods from Hong Kong. In the questions, CBP advises that, although the goods must be marked as Made in China, they will NOT be subject to the China Section 301 additional duties, and should be declared to CBP with Hong Kong as the origin (using the ISO country code of HK).
Section 232 Tariffs on Aluminum from Canada
On August 6, 2020, President Trump issued the “Proclamation on Adjusting Imports of Aluminum Into the United States” due to a substantial increase in imports of aluminum from Canada over the past 12 months. The Proclamation announced that certain aluminum articles imported into the U.S. from Canada would be subject to an additional 10% ad valorem rate duty effective as of August 16, 2020. Customs and Border Protection (CBP) issued guidance (CSMS#43654621) for making entry proper entry.
EU Section 301
Following a review of the October 2019 action taken to enforce the U.S. WTO rights in the Large Civil Aircraft dispute, the USTR has announced modifications to the Section 301 tariffs that are set to take effect September 1, 2020. The modifications to the action include updates to the list of goods subject to the Section 301 tariffs; described in Annex 2, Section 1. Although there was the possibility that the USTR would increase the tariffs up to 100%, only certain aircraft was increased from 10% to 15%, and all other goods subject to the tariffs will remain at the 25% set in October of 2019.
China Section 301 New Exclusions and Extensions Granted
USTR Requests Comments for Extension of Section 301 Exclusions Expiring on October 2nd
The USTR posted a request for comments concerning the extension of particular product exclusions granted from the first tranche (List 1) of the Section 301 tariffs on $34 Billion in imported goods from China. The USTR exclusions granted on October 2, 2019 include 92 specifically provided product descriptions. The comment period opened on August 1, 2020 and closed on August 30, 2020. Following a review of the submitted comments, the USTR will post any granted extension requests.
USTR Grants Eighth List of Product Exclusions for Tranche 4A and Opens Extension Comment Period
On August 11th, the USTR issued the eighth list of product exclusions from the fourth tranche (List 4A) of Section 301 tariffs on $300 Billion in goods from China. The new exclusions include one 10-digit HTSUS subheading and nine specially prepared product descriptions, which together cover 25 separate exclusion requests. The product exclusions apply retroactively to Sept. 1, 2019, the date that List 4A tariffs took effect, and extend to Sept. 1, 2020.
The USTR also opened a comment period for this list of granted product exclusions, which are set to expire on September 1, 2020. The USTR posted a request for comments for the possible extension of these exclusions for up to 12 months. The comment period opened on August 5, 2020 and closed on August 20, 2020.
USTR Approved 266 Extensions for Section 301 Exclusions Set to Expire August 7th
On August 11th, the U.S. Trade Representative (USTR) granted extensions to specific product exclusions that were set to expire August 7, 2020. The 266 granted extensions relate to product exclusions provided in 14 different lists that were released between August 7, 2019, and July 10, 2020. These lists provided an exclusion from the third tranche of Section 301 tariffs, of 25%, on $200 Billion in imports from China. The granted extensions will apply as of August 7, 2020, and will extend to December 31, 2020. The remaining exclusions across the 14 lists expired as of 12:01a.m. August 7, 2020, and will be subject to the 25% additional Section 301 duties.
USTR Approves 87 Extensions for Section 301 Exclusions Set to Expire September 1st
The U.S. Trade Representative (USTR) granted extensions to specific product exclusions that were set to expire September 1, 2020. The granted extensions relate to product exclusions provided in eight (8) different lists that were released between September 1, 2019, and August 2, 2020. These lists provided exclusion from the fourth tranche (4A) of Section 301 tariffs, of 15% and $7.5% on $300 Billion in imports from China. The eight lists totaled over 200 product exclusions. The USTR opened a public docket for interested parties to comment on whether to extend any of these exclusions for up to 12 months. The USTR granted extensions for 87 exclusions from across the eight lists. The extensions include 14 HTS subheadings and 73 specifically prepared product descriptions.
The granted extensions will apply as of September 1, 2020, and will extend to December 31, 2020. The remaining exclusions across the eight lists expire as of 12:01a.m., September 1, 2020, and will be subject to the 7.5% additional Section 301 duties. The USTR notice provides the specific product descriptions for the 87 products that have been granted extensions. To see all 14 lists of previously granted exclusions, click here.
M.E. Dey has compiled a list of the granted product exclusions. To see the complete list and status of all exclusions, click here