The Court of International Trade should dismiss the HMTX-Jasco sample case in the massive Section 301 litigation because the companies can’t establish that the Office of the U.S. Trade Representative exceeded its authority, the Department of Justice said in a June 1 motion. The agency didn't overstep the 1974 Trade Act when it ratcheted up the lists 3 and 4A tariffs on Chinese imports, nor did its actions violate the Administrative Procedure Act (APA), the government’s 77-page filing in docket 1:21-cv-52 said.
Section 301 (too broad)
Senate Finance Committee Chairman Ron Wyden, D-Ore., and House Ways and Means Committee Chairman Richard Neal, D-Mass., "are optimistic that a strong multilateral agreement can be reached to harmonize our international tax rules, end the race to the bottom and put a stop to digital services taxes," they said in a joint statement. The Office of the U.S. Trade Representative has threatened additional 25% tariffs on billions of dollars' worth of imports from European countries, Turkey and India over their proposed DSTs (see 2106020047), but has not implemented any of the Section 301 tariffs as the administration waits to see how negotiations go at both the G-7 and the Organization for Economic Cooperation and Development (OECD). Canadian Finance Minister Chrystia Freeland told reporters June 2, "The new US administration ... has taken an approach of compromise and I think that really does mean a deal is within reach." She said that in Canada's view it's important that both the global minimum corporate tax and DST be solved together. The New York Times reported that a Treasury Department official was optimistic about negotiations, as well. The newspaper said that the OECD's outgoing secretary general said it's possible a deal on both DSTs and global taxation could be reached in October.
Goods from the United Kingdom, Spain, Turkey, Italy, Austria and India will face new 25% Section 301 tariffs in response to digital services taxes if negotiations don't produce a resolution, U.S. Trade Representative Katherine Tai said in a June 2 news release. The tariffs are suspended for up to 180 days, as the Organization for Economic Cooperation and Development continues to negotiate international tax agreements.
Every country in the current round of retaliatory tariffs over digital services taxes will have fewer products targeted if negotiations fail to reach a solution, according to detailed lists released for the United Kingdom, Italy, Spain, Turkey, India and Austria. In all cases, as with an earlier list for France, no duties will be collected as negotiations continue. The announcement, made June 2, allows for up to 180 days before a decision has to be made on whether to hike tariffs on these goods by 25%. "Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future," U.S. Trade Representative Katherine Tai said in a press release.
International Trade Today is providing readers with the top stories from May 24-28 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
An amendment that will allow expanded information sharing from CBP on counterfeits, and which will renew the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill, will be part of the China package expected to pass the week of June 8. The amendment, sponsored by Finance Committee ranking member Sen. Mike Crapo, R-Idaho, was modified slightly from its first introduction, when it failed to pass the filibuster threshold of 60 votes. This version, which passed with 91 votes on May 27, no longer expands a forced labor initiative on seafood to all seafood products.
The Office of the U.S. Trade Representative posted a list of frequently asked questions on what the USTR doesn't do related to its Section 301 investigations. In issuing fraud alert information, the agency said it doesn't “collect money from the public” and while it may contact individuals as part of an investigation, USTR won't “demand immediate payment.” Other red flags include contact through text message or social media and the use of email addresses not from a government agency, it said. The agency didn't respond to a request for comment.
Few details were released by either side about the May 26 virtual meeting between U.S. Trade Representative Katherine Tai and her Chinese counterpart, Vice Premier Liu He. Their “introductory” caucus featured a “candid exchange” about the Biden-Harris administration’s “worker-centered” trade policy and Tai’s “ongoing review of the U.S.-China trade relationship, while also raising issues of concern,” a USTR readout said. The U.S. and China "engaged in candid, pragmatic and constructive communication with an attitude of equality and mutual respect,” a Chinese Foreign Affairs Ministry spokesperson said May 27 at a press conference. “Believing that bilateral trade is of great significance, the two sides exchanged views on issues of common concern, and agreed to keep in contact,” he said. Tai’s agency is running a “top-to-bottom review” of U.S. trade and economic policy toward China, including the Section 301 tariffs on Chinese imports, with no “timeline” for its completion, she told a House Ways and Means Committee hearing last week (see 2105130060).
The following lawsuits were filed at the Court of International Trade during the week of May 17-23.
Lawyers speaking at the Foreign Trade Association’s World Trade Week event said CBP is already drowning because of the consequences of the massive increase in post-importation tariff exclusions, and they're expecting it to get worse. Michael Roll, from Roll & Harris trade law firm, said he's betting that the Office of the U.S. Trade Representative will reopen the exclusion process for Section 301 tariffs before summer's over. But he expects it will take until late 2021 or early 2022 for exclusions to be granted, which means many imports that entered after exclusions expired, or that never had exclusions, will have been liquidated by the time the importers learn they didn't have to pay the tariff.