Marketers of low-end consumer electronics (CE) products will be especially vulnerable if the Trump administration imposes a third tranche of 25 percent Section 301 tariffs on Chinese imports, companies said in comments in docket USTR-2018-0026. Both said their businesses are too profit-poor to absorb higher customs duties, and they worry about the pass-along impact of higher pricing.
Customs Duty
A Customs Duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs Duty Rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight.
The agreement between the U.S. and Mexico (see 1808270032) contains several changes related to customs processing as part of the market access chapter, the Office of the U.S. Trade Representative said in a fact sheet about the deal. Among those are "new provisions for transparency in import licensing and export licensing procedures," the USTR said. The deal would also prohibit requiring "local distributors for importation" and applying import restrictions on used goods for remanufacturing. "Provisions for duty-free temporary admission of goods to cover shipping containers or other substantial holders used in the shipment of goods" would also be updated, the USTR said.
The government of Canada recently issued the following trade-related notices as of Aug. 24 (some may also be given separate headlines):
CBP recently issued two rulings granting first sale valuation to two importers of footwear and apparel, respectively. CBP held in HQ H295538 that, based on documentation submitted by the footwear importer, Fashion Major Brands, its Spanish parent company’s bona fide arm's length sale was destined for the U.S. at the time of that sale, and may be used to set the transaction value. Similarly, in HQ H291762 CBP found the price Direct Sourcing paid to a Chinese apparel manufacturer can be used by that sourcing company’s downstream customer as the transaction value.
An importer’s lawsuit on CBP’s classification of its purportedly used clothing was dismissed Aug. 21 over its failure to pay just $26 of a total $10,057 duty bill by the time of filing. All duties, taxes and fees must be paid in full before bringing challenges to denied protests, and Dis Vintage’s omission of a small amount of interest charges in its final payment before filing its summons -- it paid the $26 just days later -- means the Court of International Trade has no jurisdiction to hear the case, the court said in its decision.
Manufacturers in foreign-trade zones are being treated worse than other U.S. manufacturers when their products are on Section 301 lists, said National Association of Foreign-Trade Zones President Erik Autor. He said he's attempting to educate the U.S. trade representative on how zones work in an effort to resolve the problem. Autor said that these products are "being erroneously treated as imports from China" if the highest-valued component is from China. He said this mistake is happening because Census is trying, however imperfectly, to measure the amount of imports by country. Because the imports did not go through customs when they entered the U.S., the Census bureau asks about the finished products leaving FTZs, and assigns a country of origin to it by determining what country was responsible for the greatest proportion of its imported components.
CBP is seeing an increase in bond insufficiency related to new sections 301 and 232 tariffs and expects that trend to continue, the agency told Colleen Clarke, vice president-business development at Roanoke Insurance Group. The National Customs Brokers & Forwarders Association of American said in an Aug. 20 email to members that CBP told Clarke that the agency "is urging brokers and sureties to be proactive in determining bond sufficiency." Roanoke Trade mentioned the issue during a webinar last month (see 1807260011).
The government of Canada recently issued the following trade-related notices as of Aug. 20 (some may also be given separate headlines):
A domestic manufacturer is seeking the imposition of antidumping and countervailing duties on steel wheels 12 to 16.5 inches in diameter from China, it said in a petition filed Aug. 9 with the Commerce Department and the International Trade Commission. The petition specifically targets steel wheels sold for use with trailers, including utility trailers, cargo trailers, horse trailers, boat trailers, recreational trailers and towable mobile homes. Commerce will now decide whether to begin AD/CVD investigations that could eventually result in the assessment of AD/CV duties.
The 25 percent tariffs on about $16 billion worth of Chinese imports, scheduled to take effect Aug. 23 (see 1808080020), will be listed in the Aug. 16 Federal Register, the Office of the U.S. Trade Representative announced Aug. 15 in a notice to be published Aug. 16. The tariffs will be levied when goods leave the warehouse for consumption, or enter the country. For questions on customs classification or implementation of additional duties on products identified in the notice, contact Traderemedy@cbp.dhs.gov.