The U.S. may loosen Section 201 safeguard duties on crystalline silicon photovoltaic cells, according to a notice launching a new International Trade Commission investigation. The U.S. trade representative recently asked the ITC to study the economic effects of raising the threshold below which solar cells enter duty-free from 2.5 gigawatts to 4, 5 or 6 gigawatts, the ITC said. “I request that the Commission analyze the effect of increasing the level of the tariff-rate quota from the current 2.5 gigawatts (“GW”) to 4, 5, or 6 GW, without other changes to the remedy,” the USTR said in the request letter. Currently, imports of solar cells after the first 2.5 gigawatts face a 25 percent tariff, set to fall to 20 percent in February for the third year of the safeguard duty (see 1801230052). Comments are due to the ITC by Jan. 6, 2020.
The volume of Section 301 List 4A tariff exclusion requests surpassed 1,000 on Dec. 19, 49 days after the Office of the U.S. Trade Representative opened the public docket to applications at noon on Halloween. Applicants that are granted exclusions can qualify for refunds of 15 percent tariffs retroactive to Sept. 1, when the duties took effect. List 4A tariffs remain in effect at 15 percent, but are expected to be rolled back by half after the U.S.-China phase one trade deal is signed sometime in January 2020. Under USTR rules, tariff exemptions are granted on all goods imported under a product classification, not just to the company making the exclusion request. Nine applications were filed through Dec. 19 to exempt goods imported under subheading 8517.62.00.90, more than for any consumer tech product with List 4A exposure. The subheading includes a broad swath of consumer tech goods, including smart speakers, Bluetooth headphones, fitness trackers and smartwatches. Virtually all List 4A exclusion requests filed by all companies through Nov. 29 were elevated to the status of a “stage 2 initial substantive review,” the docket shows. The final “stage 4” is when an exclusion request is granted and approved for publication in the Federal Register.
The Office of the U.S. Trade Representative is making some changes to “certain notes in the Harmonized Tariff Schedule of the United States” related to the second tranche of Section 301 tariffs, it said in a notice. “To correct technical and ministerial errors and in order to conform to the U.S. Trade Representative’s intent to grant certain exclusions, the Annex to this notice includes amendments to certain notes in the HTSUS,” it said.
The U.S. trade representative's move to reserve the power to lower U.S. de minimis levels to match Mexican and Canadian de minimis levels will not be in the draft implementing bill for the U.S.-Mexico-Canada Agreement, Reuters is reporting. The provision had been opposed by a wide swath of Republicans and Democrats in both chambers (see 1911130041 and 1907300048).
A last-minute push to tighten up the steel and aluminum segment of the auto rules of origin has angered Mexico, media reports said Dec. 6. Rep. Henry Cuellar, D-Texas, had referred to this last-minute ask as not coming from House Democrats the day before (see 1912050054). The reports say that steel unions asked for a “poured and melted” standard, rather than allowing Mexican processors to take imported slab and make it into sheet metal for cars.
The Office of the U.S. Trade Representative announced eligibility for “trade surplus” tariff-rate quotas (TRQs) for sugar originating in certain free trade agreement countries for calendar year 2020. USTR found Colombia, Panama and six members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) eligible for the TRQ. The agency found that Chile, Morocco and Peru do not qualify.
The Office of the U.S. Trade Representative may raise tariff rates on the products already targeted in the Airbus dispute, or may add other European Union products to the list, it said Dec. 2. “In light of today’s report and the lack of progress in efforts to resolve this dispute, the United States is initiating a process to assess increasing the tariff rates and subjecting additional EU products to the tariffs,” it said. “USTR will publish a Federal Register Notice regarding that process later this week.” The U.S. was authorized by the World Trade Organization to levy 100 percent tariffs on $7.5 billion in European imports, but instead chose to impose 10 percent tariffs on large civil aircraft and 25 percent tariffs on 150 tariff lines, primarily food products, but also some British apparel, German and British hand tools, lenses, books and self-propelled heavy equipment (see 1910020044). The tariffs are designed to convince European Union countries to end subsidies to Airbus aircraft launches and to remedy the damage done to Boeing. Europe has said it wants a negotiated solution to both Airbus and Boeing subsidies, but the two sides do not appear to be seriously engaging on that yet.
Trade observers don't think that the Office of the U.S. Trade Representative will announce new tariffs on French products on Dec. 2, when it is scheduled to release a report on France's Digital Services Tax (see 1911270047), but there may be a list of potential targets for the future. Although the tax passed the French legislature in July, it has not been levied while U.S. and French authorities negotiate, and while the Organization for Economic Co-operation and Development works on a global approach to taxing companies like Google, Facebook and others.
The Office of the U.S. Trade Representative announced that it will release a report from its Section 301 investigation on France's Digital Services Tax on Dec. 2. The Nov. 27 press release said that its recommendation of how to respond to the DST will be made at that time. Trade groups, companies and think tanks submitted comments and testified last summer about their problems with the DST (see 1908140023), but several said that tariffs on French imports under Section 301 are not the way to fix the problem. Many of France's most identifiable exports to the U.S. are already targets of tariffs because of the Airbus dispute.
The Office of the U.S. Trade Representative scheduled a public hearing for Jan. 30, 2020, on whether Azerbaijan, Kazakhstan, Uzbekistan, Ecuador, Georgia, Indonesia, South Africa and Thailand should stay in the Generalized System of Preferences benefits program, and whether Laos should be added to it. Comments on any of these countries must be submitted by the end of Jan. 17. Worker rights are at issue in the four former Soviet Republics. Market access is a concern in Thailand and Indonesia. The International Intellectual Property Alliance is concerned about South Africa and Indonesia. And Chevron Corporation is petitioning that Ecuador be removed because, in its view, Ecuador for years tried to extort billions of dollars from Chevron for environmental pollution decades ago in the Ecuadorian Amazon, despite the Investor-State Dispute Settlement system panel ruling that the court case against Chevron was a fraud.