The Office of the U.S. Trade Representative announced that it will release a report from its Section 301 investigation on France's Digital Services Tax on Dec. 2. The Nov. 27 press release said that its recommendation of how to respond to the DST will be made at that time. Trade groups, companies and think tanks submitted comments and testified last summer about their problems with the DST (see 1908140023), but several said that tariffs on French imports under Section 301 are not the way to fix the problem. Many of France's most identifiable exports to the U.S. are already targets of tariffs because of the Airbus dispute.
Best Buy is taking multiple steps to counter effects of tariffs, Chief Financial Officer Matt Bilunas said on a Nov. 26 earnings call. He said the retailer is bringing in products ahead of tariff implementation; making strategic decisions on vendor and SKU assortment; instituting promotional and pricing strategies and sourcing changes; and developing strategies with vendor partners. The most relevant tariffed categories for Best Buy for Section 301 List 4A products are TVs, headphones and smartwatches; and for List 4B products are computers, mobile phones and game consoles, Bilunas said.
CBP created Harmonized System Update (HSU) 1916 on Nov. 20, containing 27,011 Automated Broker Interface records and 5,072 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes recently announced exclusions and other changes related to the Section 301 tariffs (see 1911120017 and 1911200043). Other changes involve Uruguay beef export certifications (see 1911220036), cotton import fees (see 1910160034) and coffee imported to Puerto Rico (see 1804130023).
International Trade Today is providing readers with some of the top stories for Nov. 18-22 in case they were missed.
The Office of the U.S Trade Representative issued some new product exclusions from Section 301 tariffs on the third list of products from China, according to a pre-publication copy of a notice posted to the agency’s website Nov. 26. The product exclusions apply retroactively to Sept. 24, 2018, the date the tariffs on the third list took effect, and will remain in effect until Aug. 7, 2020. New subheading 9903.88.35 will be used for these products.
The Office of the U.S. Trade Representative issued a new set of product exclusions from the 25 percent Section 301 tariffs on goods from China. The exclusions include products from the third list of Section 301 goods. The new exclusions "are reflected in 32 specially prepared product descriptions, which cover 39 separate exclusion requests," according to the notice.
IRobot started making some models of its Roomba vacuum line in Malaysia as part of an effort to shift away from China, the company said in a Nov. 21 news release. “Establishing manufacturing operations in Malaysia is a fundamental component in our initiative to diversify iRobot's manufacturing and supply chain capabilities, while also mitigating our exposure to current and prospective tariffs on products that are imported from China," said Colin Angle, CEO at iRobot. The company previously announced the plans to begin a production line in Malaysia (see 1910230027).
The silence from the White House on auto tariffs and a Court of International Trade ruling on 50 percent tariffs on Turkish steel (see 1911180013) has left some trade lawyers wondering whether the window has closed to levy Section 232 tariffs on European cars. The panel of judges said that the law “cabins the President's power" procedurally, because of its deadlines. The Trump administration missed its deadline of Nov. 14 last week.
Consumer electronics company Sonos forecasts a $30 million blow to fiscal year 2020 profits, resulting from the 15 percent Section 301 List 4A tariffs that took effect Sept. 1, Chief Financial Officer Brittany Bagley said on a Q4 call Nov. 21. Most of the impact will be in the holiday quarter, she said. Citing “frequent speculation” about trade negotiations, Bagley said, “We are assuming for the purposes of this call that this remains in effect for the full year at 15 percent.” To mitigate tariff exposure, the company is diversifying its supply chain out of China and has accelerated production of U.S.-bound products in Malaysia. That capacity is “ramping up quickly, and we believe we will have largely eliminated the go-forward impact of tariffs by the end of the fiscal year,” Bagley said.
When the Ways and Means Trade Subcommittee held a hearing on the U.S.-Japan mini-deal, the Office of the U.S. Trade Representative declined to send anyone to testify. Rep. Ron Kind, D-Wis., one of the biggest boosters of free trade in the Democratic caucus, said that absence represents “the disdain the current administration has" for Congress, and its role in setting trade policy. He predicted that "this will have serious ramifications for the next time" Congress has a vote on fast-track authority.