Two Wiley Rein lawyers blogged July 11 that the Section 301 investigation into French taxation of digital services is not a twin to the 301 investigation of China's abuses of the trading system. "This is not the start of a trade war with France," Stephen Claeys and Timothy Brightbill wrote. There will not necessarily be tariffs on French goods as a result of this investigation, they said. The U.S. trade representative could enter into negotiations with France, restrict service sector access for French firms, or take other actions short of tariffs.
Section 301 (too broad)
CBP will add the ability in ACE for importers to file entries with the sixth group of exclusions from the first tranche of Section 301 tariffs on July 11, it said in a CSMS message. Filers of imported products that were granted an exclusion (see 1907080023) should report the regular Chapter 84, 85 or 90 Harmonized Tariff Schedule number, as well as subheading 9903.88.11, for products subject to Section 301 duties on products from China but that have been granted an exclusion by the Office of the U.S. Trade Representative. “Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.11 is submitted,” CBP said.
Though President Donald Trump delayed imposition of List 4 Section 301 tariffs to restart negotiations with China toward a comprehensive trade deal, retailers continue stocking up on inventory as a hedge against the duties taking effect on short notice, the National Retail Federation said July 10. Imports at major U.S. retail container ports will remain at high levels this summer, “but are expected to grow only modestly compared with last year’s rush to bring merchandise into the country ahead of scheduled tariff increases,” the NRF said. “Retailers still want to protect their customers against potential price increases that would come with any additional tariffs, but with the latest proposed tariffs on hold for now and warehouses bulging, there’s only so much they can do,” it said. “We will still see some near-record numbers this summer, but right now no one knows whether there will be additional tariffs or not.” U.S. ports handled 1.85 million 20-foot-long cargo containers or their equivalents in May, up 6 percent from April and a 1.4 percent increase from May 2018, the NRF said. It’s estimated that ports handled 1.87 million containers in June, an increase of only 0.8 percent year-over-year. The July forecast is for 1.93 million containers to be handled, which would be 1.3 percent higher than the July 2018 volume, it said: “The small year-over-year increases expected in the next few months compare with double-digit growth in multiple months last year as retailers rushed to import Chinese merchandise ahead of expected tariff increases.”
The Office of the U.S. Trade Representative will begin a Section 301 investigation of France's proposed digital services tax, which is expected to pass the French Senate tomorrow, the USTR said in a news release. "The structure of the proposed new tax as well as statements by officials suggest that France is unfairly targeting the tax at certain U.S.-based technology companies," the release said. A Federal Register notice will follow with instructions on how to comment on or testify in front of the investigation.
The Office of the U.S. Trade Representative issued a sixth list of product exclusions from Section 301 tariffs on goods from China. Newly exempt from the tariffs are "110 specially prepared product descriptions," the agency said. The exclusions cover 362 separate requests, according to the notice, which is scheduled for publication in the July 9 Federal Register. The product exclusions apply retroactively to July 6, 2018, the date the first set of tariffs took effect, and will remain in effect until one year after the notice is published.
The Office of the U.S. Trade Representative is publishing its latest list of product exclusions from the first tranche of $34 billion in Section 301 tariffs on China (see 1907080008). This sixth list of exclusions includes 110 subsets of tariff numbers in chapters 84, 85 and 90. The new exclusions take effect retroactively from July 6, 2018, when the $34 billion in tariffs originally entered into force, and will remain for one year following publication of USTR’s notice. USTR is creating Harmonized Tariff Schedule subheading 9903.88.11 for the new set of exclusions.
ITC Issues Semiannual Revision to 2019 HTS; Changes Take Effect July 1
2019 is shaping up to be another active year in terms of changes to the Harmonized Tariff Schedule. Like last year, a series of revisions were necessary in the first half of the year to implement Section 301 exemptions and an increase for $200 billion worth of the China tariffs from 10 percent to 25 percent. Other major changes are related to the Generalized System of Preferences, and in particular the removal of India and Turkey from the program. In all, seven revisions were issued prior to the mid-year Revision 8, as follows:
The International Trade Commission on July 1 posted Revision 8 to the 2019 Harmonized Tariff Schedule. The semiannual update to the HTS implements the fourth and final round of tariff cuts under the expanded World Trade Organization Information Technology Agreement. It also extensively reorganizes 10-digit tariff subheadings covering aluminum products, and adds tariff provisions for aerial work platform trucks, frozen berry mixes, diamond grinding wheels, storage lockers and certain electric motorcycles.
Objections to the exemption of low value shipments from the Section 301 duties on goods from China demonstrates the need for a change in law to allow for de minimis exemptions for goods withdrawn from foreign-trade zones, the 321 Coalition said in comments to the Office of the U.S. Trade Representative. The comments were part of the docket on the fourth tranche of Section 301 tariffs on goods from China, which are now on hold as the U.S. and China work toward a trade deal (see 1907010012). The coalition similarly said it would like to see federal law changed to allow for de minimis entry for goods from foreign-trade zones as part of CBP's customs framework review (see 1902140022).