Trade groups that have been active in pushing for different intellectual property approaches in India have formed a new coalition called the Alliance for Trade Enforcement, they announced May 13. Brian Pomper, a former Senate Finance Committee chief trade counsel, is the AFTE executive director. The group includes manufacturing trade groups, pharmaceutical interests, software and telecom interests, and the National Foreign Trade Council and U.S. Council for International Business. They noted that the Special 301 Report recently released by the Office of the U.S. Trade Representative identified 33 countries that don't adequately protect IP rights, and said “many of those countries are repeat offenders.” Pomper said AFTE will work with the administration and Congress to dismantle trade barriers such as high tariffs, complex and opaque taxes targeting imports, and laws that do not give intellectual property the protection that USTR says is proper.
While the U.S.-Mexico-Canada Agreement allows importers to certify goods as deserving tariff benefits -- not just producers or exporters -- KPMG warned webcast listeners that if the importer and producer aren't related parties, it could be a mistake. Andrew Doornaert told listeners on May 11, “It would be a risk if you’re just relying on the exporter’s old NAFTA certificate.”
Imports at major U.S. retail container ports are expected to decline by double digits this spring and summer “as the economic effects of the coronavirus pandemic continue,” the National Retail Federation said May 8. Factories in China are “largely back online” and stores that closed in the U.S. are starting to reopen, “but volume is far lower than what we would see in a ‘normal’ year,” NRF said. “Shoppers will come back and there is still a need for essential items, but the economic recovery will be gradual and retailers will adjust the amount of merchandise they import to meet demand.” U.S. ports handled 1.37 million 20-foot-long cargo containers or their equivalents in March, down 14.8% from a year earlier and the lowest monthly volume in four years, NRF said. It’s estimating April was down 13.4% from a year ago, and that the monthly declines will average nearly 16% through September.
The U.S. Chamber of Commerce, in an updated list of its priorities for a U.S.-United Kingdom free trade agreement, said it wants a “single, comprehensive agreement,” not a phased approach that resolves just “a subset of issues.” The Chamber released its list the same day negotiations began (see 2005050014) May 5. It wants the U.S. and the U.K. to eliminate all tariffs on industrial goods, to address non-tariff barriers in industrial goods, and for the U.K. to end what the Chamber calls “non-science-based restrictions on agricultural trade.” The Chamber also is calling for the administration to promptly remove Section 232 tariffs on British steel and aluminum.
iRobot expects about $57 million in refunds of the List 3 Section 301 tariffs it has paid since the duties took effect in September 2018, including $6.6 million paid in Q1, Chief Financial Officer Alison Dean said on an April 29 Q1 investor call. The Office of the U.S. Trade Representative granted iRobot a tariff exclusion last week on the robotic vacuums it imports from China (see 2004240031). The refunds are expected in several installments this year, Dean said. The exclusion expires Aug. 7.
Brazilian and U.S. business organizations are asking their two countries to reach a trade deal in 2020, “with priority on modernizing trade and customs, establishing good regulatory practices, creating rules for digital trade, and combating corruption,” they said in a letter sent last week and released to the public on April 27. “These trade disciplines can be achieved without requiring either U.S. legislation or Mercosur’s involvement, and they would substantially reduce unnecessary costs and enhance bilateral trade and investment,” they said. Brazil is in a customs union known as Mercosur, or South American Common Market, and thus cannot lower its tariffs without other countries' consent.
The Office of the U.S. Trade Representative granted iRobot an exclusion to the List 3 Section 301 tariffs on the robotic vacuum cleaners it imports from China under Harmonized Tariff Schedule subheading 8508.11.00.00. iRobot applied for the exemption July 1 and based its argument partly on plans to shift production to Malaysia from China. It began producing entry-level vacuums in Malaysia in November, and said it will source additional models there later in 2020. The exclusion is retroactive to Sept. 24, 2018, when the List 3 tariffs took effect at 10%, and is valid through Aug. 7, 2020. The Trump administration hiked List 3 tariffs to 25% on March 2, 2019. iRobot’s was one of 107 exemptions granted for “specially prepared product descriptions” covering 157 “separate exclusion requests,” USTR said (see 2004230010). iRobot is “pleased that the USTR determined that our rationale for an exclusion was appropriate, particularly in light of the tangible steps we have taken to establish our manufacturing activities in Malaysia,” CEO Colin Angle said in an email. “As the largest American pure-play robotics company, with over 800 U.S.-based employees and roughly half of our revenue generated domestically, we believe that an exclusion not only further supports iRobot's ability to maintain its technological and category leadership but it also helps ensure that robotics is an industry in which the U.S. continues to lead the world.”
Industry is finding it can move components out of China, and it's still affordable to produce those components closer to final assembly plants, especially with more automation, said Peter Anderson, vice president of global supply chain at Cummins, an Indiana-based Fortune 500 company that makes engines for heavy equipment and heavy-duty trucks. The sections 301 and 232 tariffs made Cummins start “to think about what we could do differently,” and he said many Cummins suppliers have “started to take things out of China to mitigate those tariffs.” Anderson was one of several voices on a webinar on how manufacturing will change after the COVID-19 pandemic response, hosted by the Hudson Institute on April 22.
American apparel, accessories, sporting goods and footwear importers, along with their partners around the globe, are asking all countries to defer duties for at least 180 days, and “[w]here appropriate, such as in the case of items of personal protective equipment or items used by lower income consumers, government should also suspend duties.” The request is in a letter, penned April 22 and signed by 65 organizations in Europe, Asia, the Middle East and North America that either produce apparel or import and sell it.
The National Association of Manufacturers is arguing that Section 301 tariffs should be lowered or at least suspended “to spur economic growth and job creation,” and, where Section 301 refunds were already due, accelerate the process. Speeding up tariff refunds and duty drawback payments would allow companies “to rehire and reinvest as soon as possible,” the trade group said.