International Trade Today is providing readers with some of the top stories for Oct. 1-5 in case they were missed.
Finished motors assembled in Mexico from three components from China are classifiable in subheading 8501.10.4060 and subject to the 25 percent tariffs under Section 301, CBP said in a Sept. 13 ruling modification. CBP reached the same conclusion as in the ruling being modified, NY N299096, but said that ruling was "incorrect as to the application of the NAFTA Marking Rules and the country of origin of the product." The original ruling request came from Johnson Electric in July, CBP said.
Costco sees “many moving parts” in an “extremely fluid” environment now that Section 301 tariffs are in effect on $250 billion worth of Chinese imports, Chief Financial Officer Richard Galanti said on an Oct. 4 earnings call. Working with suppliers “to see what can be done to reduce and/or absorb some of the costs” is one of the strategies Costco is “exploring,” Galanti said. “Reducing our commitments on certain impacted items” is another possible remedy, he said. There’s “limited ability” to find “alternative country sourcing,” even where that’s “possible and feasible,” and that “takes time,” he said. “We’ll have to see how customers and competitors react to tariffs, and what impacts it will have.” It’s in Costco’s “DNA” to be the last to raise prices on consumers, and “we want to work with any supplier to figure out how to not do that,” Galanti said. That Costco owns more than $138 billion of purchasing power “affords us, I think, some opportunities that perhaps make it a little easier for us,” he said. People “smarter than me” don’t like tariffs, he said. “Whatever negative” they bring, “we can weather it better than others,” he said. Costco, through membership in the Retail Industry Leaders Association representing big-box retailers, lobbied unsuccessfully against the three rounds of tariffs.
Alcatel-Lucent Enterprise (ALE) through year-end will “absorb” the “significant” cost increases of the 10 percent Section 301 tariffs on Chinese imports of networking equipment and components that took effect Sept. 24, it said in a Oct. 3 news release. The Trump administration removed imports of Bluetooth headphones, smartwatches and fitness trackers under the 8517.62.00 line item from the final tariffs list, but let 10 percent duties stand on networking equipment imported under the same classification. The tariffs are scheduled to rise to 25 percent after Jan. 1. “Many vendors have chosen to pass the cost through to channel partners and customers by immediately increasing prices,” but ALE “will absorb the current 10 percent increase and give partners the opportunity to place orders before a potential need to adjust pricing in the new year,” it said. Most U.S. customers “locked in 2018 budgets long ago and are already in planning cycles for next year,” ALE said. “We recognize an unexpected price increase could aggravate a budgeting process that is often already complex for business leaders.” It vowed to give three months’ notice of any 2019 price increases.
Witnesses from the United States Council for International Business, the Aluminum Association and the International Intellectual Property Alliance say that China is not living up to its World Trade Organization commitments on many fronts, even as there are some signs of movement away from practices that damage foreign competitors.
Reclassifying Chinese imports into Harmonized Tariff Schedule codes for goods not exposed to Section 301 tariffs is perhaps the least understood, most underused strategy that companies can try for minimizing the duties’ impact, a UPS executive said during an Oct. 3 webinar on high-tech supply chains. “If you’re not participating in what that classification process looks like, you’re taking a risk, I would say, at a minimum,” said Ron Shepherd, vice president at UPS Trade Management Services.
CBP posted a new "reference guide" to the harmonized tariff schedule subheadings currently covered by the Section 301 25 percent tariffs. The guide simply lists the eight-digit subheadings subject to the tariffs and the partial exemptions at the 10-digit level.
International Trade Today is providing readers with some of the top stories for Sept. 24-28 in case they were missed.
The International Trade Commission issued Revision 12 to the Harmonized Tariff Schedule. The relatively comprehensive update implements as of Oct. 1 new provisions for wood products agreed to by the World Customs Organization, and adds new subheadings for pesticide-impregnated bed nets in Chapter 63. Other changes include new provisions for the third, $200 billion list of 10 percent Section 301 tariffs that took effect for goods from China beginning Sept. 24, as well as new exemptions for certain products from Section 201 safeguards on solar cells that took effect Sept. 19.
The removal of subheadings 0304.81.10 and 0304.81.50, which cover frozen salmon, from the recently implemented Section 301 10 percent tariffs applies retroactively to Sept. 24, CBP said in a CSMS message. "Any importer of goods classified in subheadings 0304.81.10 or 0304.84.50 in which Section 301 duties were assessed on or after that date can request a refund of the additional duties," CBP said. "Importers may file a post summary correction to request a refund of Section 301 duties assessed on goods classified in subheadings 0304.81.10 or 0304.84.50." The Office of the U.S. Trade Representative removed those subheadings (see 1809270038) “to account fully for the extensive public comments and testimony previously provided,” it said.