Customs Duty

Despite the Trump administration's pause (see 1805200002) in adding Section 301 tariffs on goods from China, it's too early to end efforts toward product exemptions, Baker & McKenzie lawyer Ted Murphy said in a blog post. "While this is a positive development, it is also subject to change," he said. "As a result, for now, we are recommending that companies continue to pursue exclusions just in case."

With CBP expected to allow for multiple options for filing Section 321 entries, some significant uncertainty remains for how the partner government agencies will treat goods imported at values under the $800 de minimis threshold, said Lenny Feldman, a lawyer with Sandler Travis. Still, there have been some indications for what to expect from the PGAs on the issue, he said. "Goods that the Alcohol and Tobacco Tax and Trade Bureau and the Bureau of Alcohol, Tobacco, Firearms and Explosives regulate would seem to be excluded from section 321 processing because the customs regulations already mention alcohol and tobacco as exceptions to de minimis processing," Feldman said in a May 20 email. Pharmaceuticals and medical devices regulated by the Food and Drug Administration also seem unlikely to receive Section 321 filing exemptions, he said.

China announced it will no longer collect 178.6 percent cash deposits on U.S. sorghum, because the antidumping case is not in the public interest. The Chinese Ministry of Commerce said on May 18 that continuing the duties would drive inflation for consumers. Sorghum is mostly fed to livestock in China, as corn prices rise. The deposits are being returned, Bloomberg reported. China imported about $957 million of U.S. sorghum in 2017 and purchases were down 15 percent in the first quarter compared to a year earlier, Bloomberg reported, citing Customs data. Farmers had used the grain in animal feed in place of domestic corn, which climbed 20 percent last year.

More than 1,000 of the 1,300 tariff lines on the list of products that could be affected by Section 301 tariffs would impact General Electric's operations, but the company is asking for just 34 items to be removed from the list. On May 16, during the second day of the International Trade Commission's public hearing to help it refine the list of products subject to 25 percent tariffs, Karan Bhatia, who leads GE's government affairs and policy office, suggested the committee exclude intra-company inputs from owned and controlled Chinese factories because those don't involve forced technology transfer, something the Section 301 tariffs are meant to address. He suggested items that have high U.S. content by value that come from China also should be excluded.

The Commerce Department issued notices in the Federal Register on its recently initiated antidumping and countervailing duty investigations on quartz surface products from China (A-570-084/C-570-085). The CV duty investigation covers entries Jan. 1, 2017, through Dec. 31, 2017. The AD duty investigation covers entries Oct. 1, 2017, through March 31, 2018.

The following lawsuits were filed at the Court of International Trade during the week of May 7-13:

A wide range of industries asked to be spared -- or protected -- in the first day of the International Trade Commission's public hearing that will hear from more than 120 companies, a major union, and trade groups, including those from China. The panel is tasked with refining the list of products subject to 25 percent tariffs, which accounted for $50 billion in imports last year. The size of the action was shaped by an estimate of the cost to U.S. companies of forced tech transfer, market access restrictions and intellectual property theft.

A bipartisan bill led by Maine senators Susan Collins (R) and Angus King (D) calls for the end of cash deposit collections on newsprint and a stay to final determinations in the antidumping and countervailing duty cases. Both would be halted until after a study on the economics of newspapers and newsprint is concluded, and until President Donald Trump still certifies that antidumping and countervailing cases against Canadian groundwood paper exporters is in the national interest.

The Trump administration looks set to continue its focus on deregulation, judging by its recently released Spring 2018 unified regulatory agenda. Regulatory agencies with a hand in trade laid out their plans to harmonize and streamline regulatory requirements, including on Lacey Act implementation, a modernized seafood inspection program and an update to Toxic Substances Control Act chemical data reporting requirements. On the other hand, regulatory plans also include enforcement measures, including procedures for Commerce scope rulings during CBP investigations of antidumping and countervailing duty evasion and increased oversight over organic imports.

U.S. companies are “market leaders” in development and sale of smart thermostats, and would be the hardest hit if the Trump administration imposes 25 percent tariffs on Chinese imports, the Advanced Energy Management Alliance said in comments posted May 10. The alliance, whose members include green energy services providers, but also Nest, Tesla and Walmart, wants the Office of the U.S. Trade Representative to remove automatic thermostats in HTS subheading 9032.10.00 from its list of products targeted for the tariffs, it said. Chinese companies “do not have a meaningful presence in the U.S. market” for smart thermostats, it said. “Therefore, if USTR were to impose duties on smart thermostats, the impact of the duties would fall primarily on U.S. companies. In addition to the harm this would cause to the U.S. companies and their American workers, the additional duties would increase prices for the millions of U.S. families who rely on smart thermostats to control their energy costs and [would] discourage their use.”