The Office of the U.S. Trade Representative copied most of the NAFTA priorities' language on customs and trade facilitation for its U.S.-Japan negotiating priorities, with one major exception. The USTR raised the idea of matching de minimis value thresholds as part of a trade deal. Specifically, it wrote that an agreement should "provide for simplified customs procedures for low-value goods and a more reciprocal de minimis shipment value."
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 U.S Trade Representative issued its first list of product exclusions from Section 301 tariffs on products from China, granting full or partial exemptions for 22 10-digit tariff subheadings, according to a pre-publication copy of a notice posted to the agency’s website Dec. 21. The product exclusions apply retroactively as of July 6, the date the first set of tariffs took effect, and will remain in effect until one year after USTR publishes the notice in the Federal Register.
Although PricewaterhouseCoopers expects trade will not return to normal with China for more than three years, experts on a Dec. 20 webcast said clients are mitigating increased tariffs through a variety of strategies, including lowering customs value, bonded warehouse use, modifying tariff codes and negotiating with suppliers or customers. "Probably 20 percent can be mitigated without making any changes to the supply chain," said Scott McCandless, a trade policy specialist for the firm.
The Commerce Department set the 12-month 2019 value-added tariff preference level for certain apparel imported directly from Haiti (Harmonized Tariff Schedule 9820.61.25 for entry-specific claims or 9820.61.30 for aggregate claims) eligible to receive duty-free treatment under the Haitian Hemispheric Opportunity Through Partnership for Encouragement Act (HOPE). For the one-year period beginning on Dec. 20, 2018, and extending through Dec. 19, 2019, the recalculated quantity of imports eligible for preferential treatment under the value-added TPL is 372,889,066 square meters equivalent (SME), a increase of more than 11 million SME over 2018 levels. Apparel articles entered in excess of this TPL will be subject to otherwise applicable duty rates.
CBP is awaiting Federal Register publication of the Office of the U.S. Trade Representative notice delaying increased Section 301 tariffs on $200 billion in Chinese goods (see 1809180016). While the USTR posted the coming notice (see 1812140034), CBP confirmed it would wait to make changes in ACE until the notice is formally published in the Federal Register. The National Customs Brokers & Forwarders Association of America noted in an email to members that there's been some confusion "when customs brokers who transmit entries early for shipments arriving after January 1 notice that CBP's system applies a 25% tariff rate for these products." Brokers should be aware that "10% will be the correct duty rate on January 1, but CBP's system will nevertheless show a duty rate of 25% until official notification is published," NCBFAA said.
CBP's final rule for drawback regulations includes some changes from the proposed rule, but keeps in place much of the proposal, including the controversial provisions on drawback for excise taxes. The biggest change from the proposed rule is the elimination of limits on "mixed" claims. The final rule is a result of the Trade Facilitation and Trade Enforcement Act and a Court of International Trade decision that found CBP to be taking too long to issue the final regulations (see 1810120055).
The two excluded sectors from planned Europe trade talks -- agriculture and autos -- both want to be included, according to comments filed with the Office of the U.S. Trade Representative ahead of the Dec. 14 public hearing on negotiation priorities. More than 150 organizations and individuals shared their views in the USTR docket ahead of the Dec. 10 deadline for comments.
New EAPA Investigations Underway Into Importers of Stainless Steel Flanges, Aluminum Door Thresholds
CBP is looking into the possible antidumping and countervailing duty evasion by importers of stainless steel flanges and aluminum door thresholds from China, the agency said in recent notices of action announcing the investigations. The stainless steel investigation is focused on Prime Stainless Products and H&H Machine, CBP's Trade Remedy Law Enforcement Directorate said in the Dec. 6 notice, which CBP hasn't posted online yet. CBP is consolidating its investigations into the two companies, it said.
Express Association of America, which represents DHL, FedEx and UPS, said Japan has not lived up to its postal privatization commitments, and asked the Office of the U.S. Trade Representative to make sure that Japan Post is no longer advantaged compared to private shippers. Michael Mullen, executive director of EAA, testified on Dec. 10 in front of a trade panel that's seeking public views on how to shape negotiations for a U.S.-Japan free trade agreement.
An audit of CBP's revenue collection processes during fiscal years 2014-2016 found some big insufficiencies in how the agency pursues and tracks debt collection, the Department of Homeland Security Office of Inspector General said in a newly released report. The DHS IG said that "CBP does not fully enforce Customs laws over its revenue collection process" and "did not exhaust all administrative efforts in its collection duties." CBP objected to several of the IG's findings, but ultimately concurred with the recommended next steps.