Harmonized Tariff Schedule

The International Trade Commission posted the 2019 Basic Edition of the U.S. Harmonized Tariff Schedule. The new HTS implements the removal of Mauritania from eligibility for African Growth and Opportunity Act benefits, makes widespread changes to units of measure throughout the tariff schedule, and adds new statistical suffixes for infant footwear, aluminum foil and paper, among other products. Most changes took effect Jan. 1.

CBP's Office of Trade will be examining the effects of the recent partial federal government shutdown and what needs to be prioritized now that government operations are being funded again, an agency spokesman said. "Approximately 95% of the Office of Trade’s staff were furloughed and not working during the shutdown," he said. The agency "will be spending much of the next few weeks assessing program-by-program impact, and determining what, if any, delays in policy implementation there will be (including to new [Form] 5106 deployment)," the spokesman said. "As we undertake these assessments, we will be communicating with trade stakeholders to apprise them of impact, anticipated adjustments to schedule, etc."

CBP is now accepting claims for drawback on Section 301 duties on products from China, said John Leonard, executive director-trade policy and programs, on a conference call held Jan. 23 to discuss issues related to the ongoing federal government shutdown. The agency has fixed a bug in ACE that was preventing Section 301 drawback claims and is now able to begin processing, though the agency’s ability to resolve particular issues will be limited due to staffing issues caused by the ongoing shutdown, he said.

The following lawsuits were filed at the Court of International Trade during the week of Jan. 14-20:

Measures of compliance among steel products importers are down since the imposition of sections 301 and 232 tariffs, said the American Institute for International Steel’s Customs Committee in its 2018 year-end report. CBP told the trade association that compliance measured by the letter of the law for imports in Harmonized Tariff Schedule chapters 72 and 73 was down to 96.46 percent in fiscal year 2018, and down to 97.8 percent when measured by major trade discrepancies, CBP told AIIS, the report said. “Issues with Section 232 and Section 301 entries presumably contributed to the reductions,” the report said.

Some new tariff provisions in the 2019 edition of the Harmonized Tariff Schedule have already been implemented, despite the ongoing partial federal government shutdown and the resulting lack of any official version published by the International Trade Commission. According to documents recently posted by the National Customs Brokers & Forwarders Association of America, changes affect classification for infant footwear, aluminum foil and paper, among other products. Extensive changes were also made to units of measure throughout the tariff schedule. On the other hand, changes made by a recent presidential proclamation, including the removal of African Growth and Opportunity Act (AGOA) benefits for Mauritania, have yet to be implemented by CBP, the NCBFAA has said. The following is a summary of the purported changes to the tariff schedule:

CBP is unable to provide support to the Office of the U.S. Trade Representative in reviewing Section 301 product exclusion requests during the partial federal government shutdown, and no more exclusions are expected while the funding impasse continues, said John Leonard, CBP executive director-trade policy and programs, during a Jan. 9 conference call with industry. CBP provides USTR with input and analysis on the feasibility of excluding individual products from the Section 301 tariffs. "That process is not happening" during the shutdown, he said. The USTR issued the first set of Section 301 product exclusions in December (see 1812240010), though CBP remains unable to implement the exclusions during the shutdown (see 1812310007).

CBP is not processing any refunds during the government shutdown, said John Leonard, CBP executive director-trade policy and programs, during a Jan. 7 conference call with industry. The agency is "not processing refunds of any kind on any type of normal entry or drawback transaction," Leonard said. The liquidation process is functioning, but "the backend refunding process and issuing of checks is not happening," he said. Interest may apply to those delayed refunds, Leonard said.

The ongoing partial federal government shutdown is causing some confusion for the trade community on tariff classification. CBP’s last tariff update in the Automated Broker Interface came on Dec. 19 (see 1812190004), but the International Trade Commission has not yet issued its annual update to the online Harmonized Tariff Schedule (see 1901020021). Further complicating matters, a presidential proclamation making more changes to the HTS is now set for publication on Jan. 7 (see 1812270038).

The new year began without an annual update to the Harmonized Tariff Schedule, with the latest version of the 2018 HTS still displayed as current on the International Trade Commission’s website. A message on the ITC’s website dated Dec. 21 says “maintenance of the Harmonized Tariff Schedule” will be “disrupted” during the ongoing government shutdown due to a lack of funding. The commission generally posts the first edition of each year’s tariff schedule around Jan. 1. An ITC spokeswoman was unavailable for comment due to the shutdown.