CBP published several thousand prospective rulings in 2020 on its Customs Rulings Online Search System (CROSS) database. The agency issues its rulings from either the National Commodity Specialist Division in New York, which handles issues like classification, country of origin, marking and preferential treatment, or the Office of Regulations and Rulings at CBP headquarters in Washington, D.C., which may also decide other issues, such as valuation, drawback, exclusion order enforcement and liquidation.
Section 301 Tariffs
Section 301 Tariffs are levied under the Trade Act of 1974 which grants the Office of the United States Trade Representative (USTR) authority to investigate and take action to protect U.S. rights from trade agreements and respond to foreign trade practices. Section 301 of the Trade Act of 1974 provides statutory means allowing the United States to impose sanctions on foreign countries violating U.S. trade agreements or engaging in acts that are “unjustifiable” or “unreasonable” and burdensome to U.S. commerce. Prior to 1995, the U.S. frequently used Section 301 to eliminate trade barriers and pressure other countries to open markets to U.S. goods.
The founding of the World Trade Organization in 1995 created an enforceable dispute settlement mechanism, reducing U.S. use of Section 301. The Trump Administration began using Section 301 in 2018 to unilaterally enforce tariffs on countries and industries it deemed unfair to U.S. industries. The Trump Administration adopted the policy shift to close what it deemed a persistent "trade gap" between the U.S. and foreign governments that it said disadvantaged U.S. firms. Additionally, it pointed to alleged weaknesses in the WTO trade dispute settlement process to justify many of its tariff actions—particularly against China. The administration also cited failures in previous trade agreements to enhance foreign market access for U.S. firms and workers.
The Trump Administration launched a Section 301 investigation into Chinese trade policies in August 2017. Following the investigation, President Trump ordered the USTR to take five tariff actions between 2018 and 2019. Almost three quarters of U.S. imports from China were subject to Section 301 tariffs, which ranged from 15% to 25%. The U.S. and China engaged in negotiations resulting in the “U.S.-China Phase One Trade Agreement”, signed in January 2020.
The Biden Administration took steps in 2021 to eliminate foreign policies subject to Section 301 investigations. The administration has extended and reinstated many of the tariffs enacted during the Trump administration but is conducting a review of all Section 301 actions against China.
CBP published notices in the Customs Bulletin revoking or modifying numerous rulings in 2020. These ruling revocations and modifications also apply to “any treatment previously accorded by CBP to substantially identical transactions.” When revoking or modifying a ruling, CBP is required by 19 USC 1625(c) to publish notice of the proposed action, and allow a period—generally one month—for comment before finalizing the action. An importer’s failure to advise CBP of “substantially identical transactions” or of a ruling not identified by CBP in these notices “may raise issues of reasonable care on the part of the importer or its agents for importations of merchandise subsequent to the effective date of this notice.” Rulings CBP revoked or modified in 2020 are as follows:
Robert Lighthizer, immediate past U.S. trade representative, said that during his time in office, every decision was based on “how it brings manufacturing jobs back to the United States,” and, he said, “I think you’re hearing the same kind of language out of the Biden administration, for which I’m grateful.”
Even though the Joe Biden administration will have a very different approach to trade than did the Trump administration, that will not mean a wholesale rejection of what its predecessors did, analysts said during a Center for Strategic and International Studies webinar Jan. 21.
The Customs Rulings Online Search System (CROSS) was updated Jan. 21. The following headquarters rulings were modified recently, according to CBP:
The following lawsuits were filed at the Court of International Trade during the week of Jan. 11-17:
November Census Bureau import data newly released through the International Trade Commission’s DataWeb tool documents Vietnam’s significant and growing role in the consumer tech supply chain. Vietnam as a sourcing country made substantial import share gains in product categories experiencing historic spikes in consumer demand during the COVID-19 pandemic, especially TVs with screen sizes under 35 inches, DataWeb shows. The Office of the U.S. Trade Representative is considering whether to impose Section 301 tariffs on goods from Vietnam (see 2101110035).
A Republican congresswoman who has been the biggest critic of the Section 232 exclusion process told National Foreign Trade Council webinar listeners that, “I’m hoping for the best under this administration. We’ve suffered a lot under [Section] 232 and 301.” Rep. Jackie Walorski, R-Ind., added that “I can’t wait to see it start unraveling.” Walorski, who claimed Jan. 12 that “we were kind of in this battle” with President Donald Trump over the broadness of the China tariffs, voted against certifying Biden's Electoral College victory last week.
National Foreign Trade Council panelists addressing the future of U.S.-China relations agreed that the political climate won't allow President Joe Biden to reverse the Section 301 tariffs on China, even though they think those tariffs haven't been effective in achieving their goal of changing the competitive playing field with Chinese firms.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 4-10: