Industry insights

Global Trade Brief – April 2018

April 24th, 2018, Posted in Global Trade Brief



Presidential Proclamations on Aluminum and Steel Tariff Increases

The President concurred with the Secretary’s findings that Aluminum and Steel are being imported into the United States in such quantities and under such circumstances so as to threaten to impair the national security of the United States. Based on his conclusions the Secretary recommended actions to adjust the imports of aluminum and steel by applying a global tariff of 7.7 and 24 percent, respectively, on imports in order to reduce imports to a level that the Secretary assessed would enable domestic steel producers to use approximately 80 percent of existing domestic production capacity and thereby achieve long-term economic viability through increased production.

The President decided to adjust the imports of aluminum and steel by imposing a 10% and 25% ad valorem tariff on aluminum and steel articles imported from all countries except Canada and Mexico with effect from March 23rd, 2018.



United States challenges Indian Export Subsidy Programs at the WTO

Export subsidies provide an unfair competitive advantage to recipients, and WTO rules expressly prohibit them.  A limited exception to this rule is for specified developing countries that may continue to provide export subsidies temporarily until they reach a defined economic benchmark.  India was initially within this group, but it surpassed the benchmark in 2015. India’s exemption has expired, but India has not withdrawn its export subsidies.

U.S. Trade Representative has requested dispute settlement consultations with the Government of India at the World Trade Organization (WTO) challenging Indian export subsidy programs as they harm American workers by creating an uneven playing field.  

These programs are: The Merchandise Exports from India Scheme; Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme; Special Economic Zones; Export Promotion Capital Goods Scheme; and duty-free imports for exporters program.  These apparent export subsidies provide financial benefits to Indian exporters that allow them to sell their goods more cheaply to the detriment of American workers and manufacturers.

Source : releases/2018/march/united-states-launches-wto-challenge


USITC determinations on Aluminum Foil from China and Rubber Bands from China and Thailand

Aluminum Foil: The U.S Commerce Department determined that imports of aluminum foil from China are subsidized and sold in the United States at less than fair value. Commerce will issue antidumping and countervailing duty orders on imports of this product from China.

Rubber bands: The ITC a determined that there is a reasonable indication that a U.S. industry is threatened with material injury by reason of imports of rubber bands from China and Thailand that are allegedly subsidized and sold in the United States at less than fair value. The ITC found that imports of rubber bands from Sri Lanka were “negligible.” The Commerce Department will continue with its antidumping and countervailing duty investigations concerning imports of rubber bands from China and Thailand, with its preliminary countervailing duty determinations due on or about April 26, 2018, and its antidumping duty determinations due on or about July 10, 2018. The investigation concerning Sri Lanka will be terminated.

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Tariff Classification for imported screws : GRK Canada Ltd. v. United States, 2016-2623 (Fed. Cir. March 20, 2018)

Facts:  Between January 2008 and August 2008, GRK imported three types of screw fasteners into the United States.  The three types of screws at issue are GRK’s Model R4 Screws (“R4”), RT Composite Trim Head Screws (“RT”), and Fin/Trim Head Screws (“Fin/Trim”). GRK’s screws are used to make dissimilar materials, for example, to make plastics or dense composite materials to wood.  To that effect, all three GRK screws are made with corrosion-resistant, case-hardened steel and “can be used to penetrate materials such as sheet metal, plastics, medium-density fiberboard, polyvinyl chloride (PVC) board, cement fiberboard, melamine, arborite, and other man-made composite materials.”.   Upon GRK’s importation of the subject screws, United States Customs and Border Protection (“Customs”) classified the screws as “other wood screws” under subheading 7318.12.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”), subject to an import duty of 12.5% ad valorem. GRK protested, claiming that the screws should have been classified under subheading 7318.14.10 as “self-tapping screws,” a classification that carries a 6.2% ad valorem duty.

Conclusion :  The court determined, as eo nomine provisions that describe all forms of an article by a specific name, the subheadings for “other wood screws” and “selftapping screws” cannot be interpreted based on use “[a]bsent limiting language or contrary legislative intent.  Applying the General Rules of Interpretation (“GRIs”), the Court of International Trade defined the classification scope of “other wood screws” and “self-tapping screws” without accounting for use. The court found, based on their design characteristics, that all three of GRK’s imported screws are properly classified as “self-tapping screws” under subheading 7318.14.10.

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CBP to accept GSP Duty-Free Claims, Process Refunds

The Generalized System of Preferences (GSP) is a renewable preferential trade program that allows the eligible products of designated beneficiary developing countries to enter the United States free of duty. The GSP program expired December 31, 2017, but was renewed through December 31, 2020. The GSP renewal has an effective date of April 22, 2018, and applies with retroactive effect between January 1, 2018, through April 21, 2018, by a provision in the Consolidated Appropriations Act, 2018.

As of April 22, 2018, the filing of GSP-eligible entry summaries may be resumed without the payment of estimated duties, and CBP will initiate the automatic liquidation or reliquidation of formal and informal entries of GSP-eligible merchandise that was entered on or after January 1, 2018, through April 21, 2018, and filed via ABI with SPI Code “A” notated on the entry. Requests for refunds of GSP duties paid on eligible non-ABI entries, or eligible ABI entries filed without SPI Code “A,” must be filed with CBP no later than September 19, 2018.

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USTR Announces New GSP Eligibility Reviews of India, Indonesia, and Kazakhstan

India:  USTR is launching a self-initiated GSP eligibility review of India based on concerns related to its compliance with the GSP market access criterion and is also accepting two petitions related to the same criterion.  The petitions filed by the U.S. dairy industry and the U.S. medical device industry requested a review of India’s GSP benefits, given Indian trade barriers affecting U.S. exports in those sectors.  India has implemented a wide array of trade barriers that create serious negative effects on U.S. commerce.  The acceptance of these petitions and the GSP self-initiated review will result in one overall review of India’s compliance with the GSP market access criterion. 

Indonesia:  USTR is launching a self-initiated GSP eligibility review of Indonesia based on concerns related to its compliance with the GSP market access criterion and related to its compliance with the GSP services and investment criterion.  Indonesia has implemented a wide array of trade and investment barriers that create serious negative effects on U.S. commerce. 

Kazakhstan:  USTR is accepting a petition from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) which alleges that Kazakhstan has not taken steps to afford internationally recognized worker rights, including the right to freedom of association and the right to bargain collectively.  The petition further alleges that Kazakhstan actively restricts the right to form trade unions and employer associations.  Serious concerns about restrictive legislation and the harassment of independent labor leaders have been raised repeatedly at the International Labor Organization (ILO).

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USTR Releases Proposed Tariff List on Chinese Products

As part of the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property, the Office of the U.S. Trade Representative (USTR) today published a proposed list of products imported from China that could be subject to additional tariffs.

The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy.  Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.

The proposed list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing.  After completion of this process, USTR will issue a final determination on the products subject to the additional duties.

The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR’s Section 301 investigation.

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Duty-free Treatment denied for Holiday Dinnerware : WWRD US, LLC v. United States, 2017-1945 (Fed. Cir. April 2, 2018)

The imported dinnerware had festive motifs such as Christmas trees, hollies, or turkeys, and were intended for the Thanksgiving or Christmas meal. The importer asserted that the items qualified for duty-free treatment under subheading 817.95.01 of the Harmonized Tariff Schedule of the United States (HTSUS) which provides duty-free status for utilitarian articles of a kind used in the home in the performance of specific religious or cultural ritual celebrations.

The Federal Circuit affirmed the trade court’s grant of summary judgment for the government. However, the Federal Circuit in adopting a definition of “ritual,” found that while Thanksgiving and Christmas dinners may be religious or cultural ritual celebrations, the tariff classification also requires “specific ritual” use and that the imports must be used in the performance of that ritual. As the Federal Circuit stated:

But it is not enough that a utilitarian article is merely used during the ritual. Instead, the use must advance or serve a particular purpose in the ritual. . . .  Assuming arguendo that Thanksgiving or Christmas dinners are specific rituals, the ritual of dinner will continue whether the serving trays and cups have festive motifs or not; the motifs themselves do nothing to further the ritual of dinner. Unless [the importer] can point to specific prescribed acts having underlying religious or cultural meaning, where the subject imports are used in the performance of those acts, its imports are not eligible for duty-free status….

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BIS Reclassifies Targets Assemblies and Components for the Production of Tritium

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has amended EAR Part 774 to impose a license requirement on exports and reexports of specified target assemblies and components for the production of tritium under new Export Control Classification Number (ECCN) 1A231, and for the related “production” technology for 1A231 commodities covered under ECCNs 1E001 and 1E201. The items identified in this rule are controlled for nuclear nonproliferation (NP) Column 1 and anti-terrorism (AT) Column 1 reasons. These new classifications are the result of a U.S. Government proposal submitted and agreed to by members of the relevant multilateral regime, the Nuclear Suppliers Group (NSG), in June 2017. This final rule, as required under the 0Y521 procedure and in fulfillment of multilateral commitments, implements the multilateral control for the items adopted by the NSG.

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ACS Drawback Claims Requiring New Filing in ACE

Please be advised that filers that filed ABI drawback claims in ACS prior to the Deployment G,

Release 4 cutover on 2/24/18, must submit a new drawback claim in ACE with a new claim number if:

  1. The required documentation to complete the claim was not provided to the Drawback Office until after 2/24/18, or
  2. The drawback claim was successfully accepted in ACS, but shows cancelled in ACE.

When filing a new claim, if any of the underlying imports designated on a complete ACS drawback claim will exceed the statutory timeframe for filing a drawback claim, filer must remove these imports from the drawback claim to get the claim accepted into the system.  After the claim is accepted, please contact the Drawback Office to backdate the claim date and put the claim into trade control status. Once the claim is back in trade control, the filer may add the underlying imports that previously exceeded the timeframe limitations back onto the drawback claim and resubmit.  Filer must ensure that the transmission date in the A-Record is the backdated date to preserve the original claim filing date.

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United States considers changes to free trade agreement with Korea

The United States International Trade Commission (USITC) is seeking input on a new investigation concerning proposed modifications to the United States-Korea Free Trade Agreement (FTA) regarding the staging of customs duties for certain motor vehicles.

The investigation, U.S.-Korea FTA: Advice on Modifications to Duty Rates for Certain Motor Vehicles, was requested by the U.S. Trade Representative (USTR) in a letter received on April 6, 2018.  The letter included an attachment detailing the articles affected by the proposed modifications.

The USITC expects to submit its advice to the USTR by June 1, 2018.  A public version of the report, with all confidential business information deleted, will be released as soon as possible thereafter.

The USITC is seeking input for its new investigation from all interested parties and requests that the information focus on the articles for which the USITC is requested to provide information and advice. The USITC will not hold a public hearing in connection with the investigation; however, the USITC welcomes written submissions for the record

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Effective May 14, 2018, Definition of Importer Security Filling Importer

This final rule adopts a proposed amendment to expand the definition of an Importer Security Filing (ISF) Importer, the party that is responsible for filing the ISF, for certain types of shipments. The changes are necessary to ensure that the definition of ISF Importer includes parties that have a commercial interest in the cargo and the best access to the required information.

The final rule broadens the definition of “ISF importer” to include the goods’ owner, purchaser, consignee, or agent (such as a licensed customs broker). 

By broadening the definition to include these parties, the responsibility to file the ISF will be with the party causing the goods to enter the limits of a port in the United States and most likely to have access to the required ISF information.

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