ITC Posts Revised HTS, Which Takes Effect July 1; Implementation of ITA Tariff Cuts, GSP Review: Chapters 1-84

(NOTE: This is the first of a multipart summary of the 2016 Supplement Edition of the HTS, covering changes to chapters 1-84. Summaries of changes to chapters 85-99 will appear in an upcoming issue of International Trade Today. The effective date of all of the changes listed below is July 1, 2016, unless otherwise noted.)

Textile unit of quantity. Statistical note 3 to Section XI of the HTS is moved to the general notes as new general statistical note 4(c). The text, unchanged except for an update to the name of CBP and the quota branch, stipulates that the “unit of measure to be used by Customs and Border Protection (CBP) field offices when reporting imports of textiles to CBP Headquarters Quota Branch shall be the first unit of quantity unless the second unit of quantity (if there is one) is underlined, in which case the second unit of quantity shall be reported.” Former general statistical note 4(c) is moved down to become general statistical note 4(d).

New SPI “D” for AGOA. The ITC says SPI “D” has been added to over 3,400 subheadings to indicate eligibility for benefits under the African Growth and Opportunity Act. The additions will promote “greater transparency,” it said.

Changes to HTS From 2015-16 GSP Review

The ITC made several changes to the HTS based on the results of the U.S. Trade Representative's 2015-16 GSP review. Notable among the changes, which all take effect July 1, is a set of "travel goods" under heading 4202 that are newly eligible for GSP. However, USTR designated these travel goods eligible for GSP for least developed country beneficiaries only.

Newly ineligible country-product pairs. As part of its GSP review, USTR removed certain products from specified countries from eligibility for benefits under the program. The following HTS subheadings are now ineligible for GSP when imported from these countries (SPI A* is also added to these subheadings to indicate some countries are ineligible):

• 2202.90.36 (single fruit or vegetable juice, fortified) – Philippines
• 3204.20.10 (fluorescent brightening agent 32) – India
• 3204.20.80 (other fluorescent brightening agents) – India
• 3907.60.00 (PET resin) – India
• 7325.91.00 (iron or steel, cast grinding balls and similar articles for mills) – India
• 8708.50.95 (half-shafts for certain automobiles) – India

Newly eligible products. SPI “A+” is added to the following subheadings to indicate newly granted GSP eligibility, but only for least developed beneficiary developing countries:

• 4202.11.00 for trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers, with an outer surface of leather or of composition leather.
• 4202.12.40 for trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers, with an outer surface of cotton (not pile or tufted).
• 4202.21.60 for handbags of non-reptile leather or composition leather, valued not over $20.
• 4202.21.90 for handbags of non-reptile leather or composition leather, valued over $20.
• 4202.22.15 for handbags with an outer surface of sheeting of plastic.
• 4202.22.45 for handbags with an outer surface of cotton, not pile or tufted (also added SPI “D” for AGOA).
• 4202.31.60 for articles normally carried in the pocket or handbag, with a surface of non-reptile leather or composition leather.
• 4202.32.40 for articles normally carried in the pocket or handbag, with a surface of non-pile or tufted cotton (also added SPI “D” for AGOA).
• 4202.32.80 for articles normally carried in the pocket or handbag, with a surface of other non-pile or tufted vegetable fibers (also added SPI “D” for AGOA).
• 4202.92.15 for travel, sports and similar bags with an outer covering of cotton, not pile or tufted (also designated SPI “D” for AGOA).
• 4202.92.20 for travel, sports and similar bags with an outer covering of other vegetable fibers, not pile or tufted (also designated SPI “D” for AGOA).
• 4202.92.45 for travel, sports and similar bags with an outer covering of “other” materials (also designated SPI “D” for AGOA).
• 4202.99.90 for other containers of heading 4202, covered with other materials.

In addition, the following changes were made to the tariff schedule to break out new subheadings for certain products that were designated eligible for GSP, but that were formerly classifiable with products still ineligible for the program:

• 4202.12.21 for trunks, suitcases, vanity cases and similar containers. To reflect their addition to GSP, trunks, suitcases, vanity cases and similar containers, with an outer surface of plastics, are broken out into new subheading 4202.12.21. SPI “A+” is listed in special column 1 to indicate GSP only for least developing country beneficiaries. The subheading is further broken out into statistical suffixes for structured, rigid (4202.12.2120) and “other” (4202.12.2150). Other forms of containers covered in plastics, such as attache cases, briefcases and similar containers, were not designated eligible for GSP and are being placed in new subheading 42002.12.29.
• 4202.12.81 for trunks, suitcases, vanity cases, attache cases, briefcases, school satchels with man-made fibers. Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers, with an outer covering of man-made fibers, were designated eligible for GSP for least-developing countries, but similar products made from pile or tufted cotton, or from silk or other textile materials, were not. The former (i.e., covered with man-made fibers) is given its own new subheading 4202.12.81, designated “A+”. The latter, still ineligible for GSP, is put in new subheading 4202.12.89.
• 4202.22.81 for handbags with an outer surface of man-made fibers. Due to the addition of handbags with an outer surface of man-made fibers, but not handbags with an outer surface of pile or tufted cotton, paper yarn or other textile materials, handbags with an outer surface of man-made fibers are broken out into their own subheading 4202.22.81, SPI “A+”. Handbags with coverings made from other non-silk vegetable fibers, pile or tufted, now fall under subheading 4202.22.89.
• 4202.32.93 and 4202.32.99 for articles normally carried in the pocket or handbag, with man-made fibers or other, non-cotton vegetable fibers. Articles normally carried in the pocket or handbag with a covering of man-made fibers, as well as the same articles with a covering of “other” non-cotton vegetable fibers, are added to GSP under subheadings 4202.32.93 and 4202.32.99, respectively, with SPI “A+”. Articles normally carried in the pocket or handbag with a covering of pile or tufted cotton, which previously shared the same subheading, is now classifiable under subheading 4202.32.91, ineligible for GSP.
• 4202.91.90 for other containers of heading 4202 with covering of leather or composition leather, except golf bags. Other containers of heading 4202 not elsewhere specified, except for golf bags, are added to GSP under new subheading 4202.91.90 with SPI “A+”. As golf bags covered with leather or composition leather were not added to GSP, they are broken out into new subheading 4202.91.10.
• 4202.92.31 for travel, sports and similar bags with an outer covering of man-made fibers; 4202.92.39 for travel, sports and similar bags with an outer covering of “other” textile materials. These products are given their own new subheading to designate them as GSP eligible under SPI “A+”. Travel, sports and similar bags of paper yarn, of pile or tufted cotton, and of silk are put in new HTS subheading 4202.92.33, ineligible for GSP.
• 4202.92.91 for “other” containers of heading 4202 covered with man-made fibers (except jewelry boxes); 4202.92.97 for “other” containers of heading 4202 covered with other, non-textile materials. The ITC gave these residual categories their own subheadings to designate them for GSP with SPI “A+”. “Other” containers of heading 4202 covered with other textile materials were not designated eligible for GSP, and were separated into subheading 4202.92.93.

Tariff Changes Take Effect From Expanded ITA Implementation

July 1 marks the first implementation date of tariff reductions under the expanded Information Technology Agreement. These tariffs, along with reductions made by other members of expanded ITA, are being made on a most-favored-nation basis, so they apply to all WTO members, not just expanded ITA members. Some tariffs will fall to zero immediately, while other reductions will be phased in over a period of three years, until 2019.

Printer ink cartridges. Under ITA, tariffs will fall to zero for printer ink cartridges and solid ink in engineered shapes, both black and color, for use in machines of subheadings 8443.31, 8843.32 and 8443.39 (i.e., multi- and single-function printers capable of connecting to an automatic data processing (ADP) machine and copy machines). To implement the change, new subheading 3215.11.1000 is created for black printer ink cartridges that meet this criteria, and new subheading 3215.19.1000 for color. The two new subheadings will have an initial rate of 1.3% (down from 1.8%), falling to 0.9% on July 1, 2017, to 0.4% on July 1, 2018, and finally to zero on July 1, 2019.

New subheadings 3215.11.30 and 3215.11.90 are created for other forms of black printing ink that will not see tariffs reduced under expanded ITA, along with 3215.19.30 and 3215.19.90 for color printing ink not subject to expanded ITA.

Adhesives for flat-panel displays and touch screens. Tariffs will be cut to zero for “optically clear free-film adhesives and optically clear curable liquid adhesives of a kind used solely or principally for the manufacture of flat panel displays or touch-sensitive screen panels,” of synthetic plastic or of rubber, put up for retail sale as adhesives and with a net weight not greater than 1 kg. New subheading 3506.91.1000 is created for such products, with an initial duty rate of 1.5% (from 2.1%), falling to 1% on July 1, 2017, to 0.5% on July 1, 2018, and to zero on July 1, 2019.

New subheading 3506.91.5000 is created for other adhesives of synthetic plastic or of rubber, put up for retail sale as adhesives and with a net weight not greater than 1 kg, remaining under a 2.1% duty.

Photography materials. Certain photographic plates and film under subheadings 3701.30.0000, 3701.99.3000 and 3701.99.6000, as well as chemicals for photographic uses under subheadings 3707.90.3200 and 3707.90.6000, will see rates drop to zero by 2019 under expanded ITA. No changes to tariff terms were required by this change (see table for phase-in schedule).

Thermoplastic liquid crystal copolymers. Expanded ITA is cutting the tariff rate to zero on thermoplastic liquid crystal aromatic polyester copolymers. To effect this change, new subheading 3907.99.2000 is created for these products, with an initial duty rate of 4.8% (from 6.5%), falling to 3.2% on July 1, 2017, to 1.6% on July 1, 2018, and to zero on July 1, 2019.

New subheading 3907.99.50 is created for other products that formerly fell under 3907.99.01, including polybutylene terephthalate, retaining a duty rate of 6.5%.

Boxes for semiconductors. Tariffs will fall to zero on plastic boxes specially shaped or fitted for the packing of semiconductor wafers, masks or reticles. New subheading 3923.10.2000 is created for these products, with an initial duty rate of 2.2% (from 3%), falling to 1.5% on July 1, 2017, to 0.7% on July 1, 2018, and to zero on July 1, 2019.

New subheading 3923.10.9000 is created for other plastic boxes, retaining a duty rate of 3%.

Fans for cooling microprocessors, telecom equipment and computers. Fans of a kind used solely or principally for cooling microprocessors, telecommunications apparatus, ADP machines or units of ADP machines now receive a zero percent duty rate under ITA. The products will now get their own subheading, 8414.59.1500, with tariffs on the product immediately falling from 2.3% to zero.

Other fans formerly under subheading 8414.59.60 are moved to new subheading 8414.59.65, and continue to be subject to a 2.3% duty rate.

Electronic scales. ITA immediately tariffs to zero (from 2.9%) on scales for continuous weighing of goods on conveyors that use electronic means for gauging weights, under new subheading 8423.20.1000, and other scales (i.e., non-conveyor and non-hopper), with a capacity of over 5,000 kg, that use electronic means for gauging, under new subheading 8423.89.1000. Tariffs also fall to zero (from 2.8%) for parts of weighing machinery using electronic means for gauging weight, excluding parts of machines for weighing motor vehicles, under new subheading 8423.90.1000.

Subheading 8423.20.9000 is created for non-electronic conveyor scales, and subheading 8423.90.9000 is created for other non-electronic scales with a capacity of over 5,000 kg, with rates remaining at 2.9% (and a provision for other scales with a capacity of over 5,000 kg and with digital displays eliminated). Likewise, “other” parts for scales are moved to new subheading 8423.90.9000, with tariffs remaining at 2.8%, and a statistical breakout for digital displays for scales is eliminated.

Sprayers and dispersers for circuit manufacturing. Mechanical appliances for projecting, dispersing or spraying, used for the manufacture of printed circuits or printed circuit assemblies, will see tariffs immediately fall to zero (from 2.4%) and get a new subheading, 8424.89.1000.

“Other” projecting, spraying and dispersing appliances (i.e., not for extinguishing fires, spray guns, steam or sand blasting or agricultural uses) will remain dutiable at 2.4% under new subheading 8424.89.9000.

Copy machines. Tariffs immediately fall to zero (from a range of 1.8% to 3.7%) for all subheadings subject to tariffs under the six-digit subheading for copy machines (i.e., subheadings 8443.39.2000 for indirect electrostatic copy machines, 8443.39.4000 for other photocopying apparatus of the contact type, and 8443.39.5000 for thermocopying apparatus). No change was necessary to the tariff terms themselves.

Textile printer parts. Tariffs also immediately fall to zero (from 2.6%) for parts for mechanical textile printing machinery under subheading 8443.91.2000. The ITC made no change to the tariff terms.

Tools for making circuits, computers. The expanded ITA agreement cuts tariffs to zero (from 2.4%) for machine tools for working metal that are operated by laser or other light or photon beam, of a kind used solely or principally for the manufacture of printed circuits, printed circuit assemblies, parts of heading 8517 or parts of automatic data processing units. New subheading 8456.10.7000 is created for these products.

Other laser-operated, non-numerically controlled metal working tools are moved to new subheading 8456.10.8000, and remain subject to a 2.4% duty.

Parts for circuit, computer manufacturing tools. Likewise, expanded ITA cuts tariffs to zero (from 4.7%) on “parts and accessories of machine tool of subheadings 8456.10, 8456.30, 8457.10, 8458.91, 8459.21, 8459.61 and 8461.50, of a kind used solely or principally for the manufacture of printed circuits, printed circuit assemblies, parts of heading 8517 or parts of automatic data processing machines,” creating new subheading 8466.93.9600 to cover these products.

Other parts for machines formerly classifiable under subheadings 8466.93.9540 and 8466.93.9585 are moved to the new subheading 8466.93.98, and remain dutiable at 4.7%.

Typewriter and word processor parts. The expanded ITA reduces to zero (from 2%) all remaining tariffs on parts and accessories for typewriters and word processors of heading 8469. New subheading 8473.10.0100 covers parts in the form of goods “described in additional U.S. note 5 to this chapter,” which appears to refer to multicomponent integrated circuits. Parts of word processing machines, other than printed circuit assemblies, get duties cut to zero in new subheading 8473.10.4100 (moved from now-defunct 8473.10.4000), and parts of typewriters and accessories of word processors and typewriters also see rates cut to zero but remain in subheadings 8473.10.6000 and 8473.10.9000, respectively.

Other office machine parts. Similarly, expanded ITA reduces to zero (from 1.9%) all remaining tariffs on parts and accessories for “other” office machines under heading 8472. New subheading 8473.40.0100 covers parts in the form of goods “described in additional U.S. note 5 to this chapter,” which again appears to refer to multicomponent integrated circuits. Parts of machines of heading 8472, other than automated teller machines, get duties cut to zero in new subheading 8473.40.8600 (moved from now-defunct 8473.40.8500).

Automated circuit manufacturing equipment. Automated electronic component placement machines of a kind used solely or principally for the manufacture of printed circuit assemblies see rates immediately fall to zero (from 2.5%), under new subheading 8479.89.9200.

“Other” machines under former subheading 8479.89.98 now move to new subheading 8479.89.94, remaining subject to a 2.5% duty.

Statistical Breakouts for Organic Foods

The ITC, along with the other agencies of the interagency "484(f)" committee, designated new statistical breakouts for organic foods, as follows:

Organic yellow peas. A new statistical breakout is added for certified organic whole (i.e., non-split) yellow peas under subheading 0713.10.4005. Non-organic non-split yellow peas will now be classified under subheading 0713.10.4015.

Organic green lentils. New statistical breakout 0713.40.2015 is added for certified organic green lentils, including French green (dark speckled). Non-organic green lentils are now classifiable under subheading 0713.40.2020.

Organic barley. New statistical breakout 1003.90.4020 for certified organic, non-seed barley, not for malting purposes. Non-organic, non-seed barley not for malting purposes now goes in subheading 1003.90.4030.

Organic specialty sugars. A new statistical breakout is added for certified organic specialty sugars under subheading 1701.99.1015. Non-organic specialty sugars will now be classified under subheading 1701.99.1017.

Other Statistical Breakouts

The 484(f) committee also created additional statistical breakouts for other products, including sweatshirts and the chemical glufosinate, that take effect July 1:

Persulfates. New statistical breakouts are added for persulfates of potassium under subheading 2833.40.6010 and of ammonium under 2833.40.6020. Other persulfates, not of sodium, potassium or ammonium, are now classifiable under subheading 2833.40.6050.

Acid chlorides. Acid chlorides now get their own statistical breakout under subheading 2915.90.5010; the subheading for “other” saturated acyclic monocarboxylic acids becomes 2915.90.5050.

Glufosinate. A new statistical breakout is added for 2-Amino-4-[hydroxy(methyl)phosphonoyl] butanoic acid, i.e., glufosinate, under subheading 2931.90.9045. Other organo-phosphorous compounds, i.e., those that aren’t glufosinate and don’t contain a phosphorus atom to which is bonded one methyl, ethyl, n-propyl or isopropyl group, but no other carbon atoms, are now classifiable under subheading 2931.90.9047.

Glufosinate herbicides. Herbicides made of mixtures of glufosinate (i.e., 2-amino-4-[hydroxy(methyl)phosphonoyl] butanoic acid) or its salts or esters and application adjuvants also get a new statistical breakout at 3808.93.5010, with “other” herbicides under the now-defunct subheading 3808.93.5000 now falling under new subheading 3808.93.5050.

Safety and detonating fuses and caps. Individual statistical breakouts are created for safety fuses under subheading 3603.00.3010 and detonating fuses under 3603.00.3020. Similarly, the former single subheading for detonating caps, igniters or electric detonators is subdivided into statistical breakouts for detonating caps (3603.00.9010), igniters (3603.00.9020) and electric detonators (3603.00.9030).

Sweatshirts. More detailed statistical breakouts are added for sweatshirts. Sweatshirts of cotton, not containing 36 percent or more of flax fibers, get their own statistical suffixes for sweatshirts for men (6110.20.2041), boys (6110.20.2044), women (6110.20.2046) and girls (6110.20.2049). Similarly, sweatshirts of man-made fibers, not containing beyond a certain weight of leather, silk or wool or animal hair, are given statistical suffixes for sweatshirts for men (6110.30.3041) and boys (6110.30.3044).

Stainless steel bars and rods. The ITC is further dividing a subheading for stainless steel bars and rods, not of high-nickel alloy steel, hot-rolled, in irregularly wound coils, of a circular cross-section of less than 14mm, into statistical suffixes for steel containing less than 8 percent by weight of nickel (7221.00.0017) and containing at least 8 percent but less than 24 percent by weight of nickel (7221.00.0018).

Tapered roller bearings. New statistical breakouts are added for tapered roller bearings. Cup and cone assemblies entered as a set, other than wheel hub units, get new statistical suffixes for sets with cups having an outside diameter exceeding 102 mm but not exceeding 203 mm (8482.20.0061) and for sets with cups having an outside diameter exceeding 203 mm but not exceeding 305 mm (8402.20.0064). A new statistical suffix is also added for cone assemblies entered separately for cups having an outside diameter exceeding 102 mm but not exceeding 203 mm (8402.20.0081). Another statistical suffix is added for inner or outer rings or races for cups having an outside diameter exceeding 102 mm but not exceeding 203 mm (8482.99.1550).

Non-ITA Tariff Changes

Finally, the ITC made a single change to tariffs for reasons other than implementation of the expanded Information Technology Agreement, affecting sugar imported under the U.S.-South Korea Free Trade Agreement:

U.S.-Korea FTA sugar. The duty rate for in-quota sugar described by additional U.S. note 5 to chapter 17, entered under subheading 1701.99.10 and pursuant to the provisions of the U.S.-Korea free trade agreement, falls to zero. The rate had previously ranged from $0.006 to $0.007 per kilogram, depending on sugar degree.