The Customs Rulings Online Search System (CROSS) was updated Nov. 20. The following headquarters rulings were modified recently, according to CBP:
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.
Antony Blinken, President-elect Joe Biden's choice for secretary of state, has said that the Section 301 tariffs on China and Section 232 tariffs on Europe “harm our own people,” according to coverage of a U.S. Chamber of Commerce talk he gave in September. “We would use tariffs when they’re needed, but backed by a strategy and a plan,” he added. Blinken, who served as deputy secretary of state under President Barack Obama, said, “The EU is the largest market in the world. We need to improve our economic relations, and we need to bring to an end an artificial trade war that the Trump administration has started,” Reuters reported from the Chamber talk.
C.H. Robinson “identified potential savings for its customers of roughly $980 million related to exclusion refunds” since the first Section 301 tariffs were put in place in 2018, the company said in a recent news release. Some 96% of those are “product-specific which require a more complex, time-consuming analysis for qualification,” it said. “The U.S.-China trade war has added another layer of complexity to what has been a challenging global transportation market over the past year,” said Mike Short, president of global forwarding at C.H. Robinson. “As we have consulted with businesses of all sizes, it’s clear that the biggest barriers to duty recovery for these companies are a lack of time, data, and expertise to navigate the complex and lengthy application process.” The last of the exclusions expire Dec. 31.
Complaint filings at the Court of International Trade seeking to have the Section 301 lists 3 and 4A tariff rulemakings vacated and the duties refunded (see 2009210025) slowed to a trickle in November, with fewer than 10 filed within the last two weeks. Of the roughly 3,700 complaints filed since Sept. 10, about 140 have been filed since Sept. 24. That’s the two-year anniversary date of List 3 taking effect and was within the statute of limitations that many lawyers cited under court rules to establish the timeliness of their actions. A plaintiff must file an action within two years “after the cause of action accrues,” court rules say. Lawyers in the subsequent actions will try to establish that the clock started when their importer clients first paid the tariffs.
The Office of the U.S. Trade Representative is making minor changes to product exclusions from Section 301 tariffs on products from China. The agency said it is amending an exclusion from List 2 tariffs for certain goods of subheading 8407.90.9010 so that it now refers to “Gas (natural or liquid propane (LP))” engines, instead of “Gasoline or liquid propane (LP)” engines. The change affects U.S. Note 20(o)(14), which provided for this exclusion for entries Aug. 23, 2018, through July 31, 2020, as well as U.S. Note 20(ggg)(4), which provides for the exclusion as extended to Dec. 31, 2020, USTR said in notices released Nov. 17. Subheading 8407.90.9010 covers “Gas (natural or LP) engines,” so the changes appear to align the exclusion with the language in the underlying tariff provision.
While it seems clear that Joe Biden wants to “team up with our allies” to confront China, less clear is how that will work in reality, Mayer Brown international trade lawyer Tim Keeler said during a Nov. 17 Mayer Brown webinar about trade policy in the incoming administration. Keeler, who is a former chief of staff in the Office of the U.S. Trade Representative, said a majority of Congress believes the Section 301 tariffs have been a source of leverage, while the European Union thinks the tariffs violated World Trade Organization rules.
International Trade Today is providing readers with the top stories from Nov. 9-13 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
The following lawsuits were filed at the Court of International Trade during the week of Nov. 9-15:
A number of U.S. trade groups questioned the evidence behind the Office of the U.S. Trade Representative's assertions that Vietnam is importing illegal timber, and the assertion that those logs end up in exported products going to the U.S. The groups said in comments to the agency that the notice initiating the Section 301 investigation contained no citations for these claims. Both trade groups and companies asked for a virtual public hearing, and the right to rebut others' submissions.
The majority of comments from U.S. interests submitted on whether the U.S. should do anything to pressure Vietnam to stop manipulating its currency favor not putting tariffs on Vietnamese imports. Many comments filed in the docket express disagreement with the very premise of the investigation. HanesBrands, which manufacturers apparel in Vietnam that is exported to the U.S., Australia, Canada, the European Union and China, requested a public hearing on the investigation, and quoted the statute that requires such a hearing if requested by any interested person.