World Trade Organization (WTO) “Trump’s China Tariffs Violate Trade Rules”

The World Trade Organization (WTO) Tuesday struck at the core of President Trump’s trade war on China, ruling that the tariffs he imposed in 2018 on $234 billion worth of Chinese goods ran afoul of U.S. commitments under global trading rules.

The U.S. tariffs against China were authorized under Section 301 of the Trade Act of 1974, which empowers the president to levy tariffs and other import restrictions whenever a foreign country imposes unfair trade practices that affect U.S. commerce. The Trump administration has claimed the tariffs were necessary to confront China’s widespread violations of intellectual property rights and forced technology transfer policies.

Though the use of Section 301 isn’t unprecedented, the provision largely fell out of favor in the 1990s after the U.S. agreed to first follow the WTO’s dispute-settlement process before it triggered any retaliatory trade actions.

The ruling will have no immediate impact on U.S. customs officials’ ability to collect the import taxes from American importers. The administration said its tariffs were needed to curb years of trade cheating by China. But in a 66-page report, the panel rejected that claim.

“The United States has not met its burden of demonstrating that the measures are justified,” the panel concluded.

The U.S. can stall any further action by appealing Tuesday’s ruling. The administration has blocked for months the appointment of new members to the WTO’s appellate body, leaving the organization unable to fulfill its assigned role of adjudicating trade spats.

What can importers do?

The situation remains very fluid. We are advising clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exemption.
  • Consider sourcing options in other countries besides China.

Section 301 Update: Legal Challenge Filed Against US Court of International Trade

A new challenge has been filed in the US Court of International Trade (CIT) contesting the assessment of the List 3 and List 4 tariffs that have been imposed on goods from China under Section 301 of the Trade Act of 1974.  The lawsuit alleges that the tariffs were imposed in an untimely manner and to retaliate against Chinese tariff measures. The lawsuit alleges they were not to remedy China’s unfair trade practices, and therefore were not authorized under the Trade Act.  The suit further alleges the USTR failed to comply with the Administrative Procedures Act when imposing the tariffs.

If successful, these cases could result in the refund to the plaintiffs of all tariffs they paid on the List 3 and 4 goods over the past two years, and up until the case is resolved.  It is probable that only importers that file their own lawsuits will be able to recover refunds, at least with respect to entries that have been liquidated by CBP.  While importers can file protests on liquidated entries, there is no certainty that CBP would be authorized to issue refunds to importers without a case filed in court.

The lawsuit is based upon the court’s residual jurisdiction, 28 USC 1581(i). The deadline to file in court is two (2) years after the cause of action accrues.  The USTR published notice imposing the List 3 duties on September 21, 2018, and the duties took effect on all entries for consumption on or after September 24, 2018.  The safest course of action to ensure meeting the two-year deadline with respect to List 3 tariffs would be to file a court claim on or before September 20, 2020.  Importers not meeting that deadline may still be able to assert that the two-year deadline runs from the date the tariffs were paid, and thus a later filed lawsuit would be timely with respect to any tariffs paid during the previous two years.  We caution that, based upon prior court precedent, there is uncertainty as to whether the two-year filing deadline runs from date of the USTR decision or date of payment of the tariffs.

What importers should know:

The situation remains very fluid. We are advising clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs had on your shipments, and suggest a law firm handling these lawsuits.
  • You can do nothing. Everything is still very fluid and there is a chance that the legal challenge will result a credit for everyone.
  • We urge individual importers, associations and others seeking to participate in the lawsuit to Contact Us ASAP.

Section 301 Update: Missed USTR Refunds? We Can Help!

The Office of the United States Trade Representative (USTR) issued a number of exclusions to the Section 301 China assessment program. These exclusion orders resulted in millions of dollars of duty refunds for our clients.  In order for importers to have taken advantage of these opportunities they had to file protective claims or timely claims to keep viable their rights to refunds.

Unfortunately, some importers were not able to take advantage of these granted exclusions because they did not file timely claims. Please note that we are working on a time sensitive strategy to revive such time-barred claims. If you missed filing claims on products eligible for an exclusion from Section 301 duties and would be interested in pursuing refunds back to the date their entries first became subject to 301, contact us.

Please note that this concept of private legislation is separate from the current action in the CIT to request refunds of China 301 duties paid on list 3 and list 4A goods. It is limited to only importers who could have taken advantage of exclusion orders but failed to do so in a timely fashion. The litigation in the CIT is likely to play out over the next two years.  The private legislation concept will be limited and should be concluded by the end of the year.

What importers should know:

The situation remains very fluid. We are advising you do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exclusion.
  • We urge individual importers, associations and others seeking exclusions from the tariffs to Contact Us ASAP.

Coronavirus Impact on Medical Device Imports

In a U.S. and world economy that has essentially come to an abrupt halt due to fears and precautions surrounding the Coronavirus, parts of the global medical device and pharmaceutical sectors are in high gear.

For U.S. importers of these materials, complexity and rapid shifts in regulation is increasing. Are you aware of the latest regulations impacting your goods?

 

  • The Food and Drug Administration said on Tuesday that it would stop routine inspections of food, drugs and medical devices overseas through April, citing the worldwide spread of the Coronavirus.
  • Global sourcing of certain high-tech items, particularly respirator ventilators and related equipment, has become a race against time. In 2019 Americans imported about $22 billion of high-tech medical equipment – including CT systems, ultrasound systems, patient monitors, and X-ray devices – used to diagnose and treat patients.
  • And in a loosening of the U.S./China trade war, U.S. trade officials recently exempted from import tariffs more than 100 medical items manufactured in China. Exempted products included protective masks, drapes and gowns, hand wipes, medical exam gloves, medicine cups, stethoscopes and shoe covers.

 

Quickly and painlessly moving your medical device imports and pharmaceuticals through Customs has never been more urgent…and we’ll be here to help you throughout this pandemic.

Trust WB Skinner and our half century of experience with medical device and pharmaceutical imports. Experience and staying informed have never been more important than they are right now.

USTR Publishes Additional Exclusions To Section 301 List 3 Products

New exclusions from the duties on Chinese imports have been announced by the U.S. Trade Representative (USTR), representing a sixth round of exclusions requests from the 25 percent duty assessed under the Section 301 List of goods from China.

These product exclusions relate to the imposed additional duties announced in 83 FR 47974 on Chinese goods, with an annual trade value of approximately $200 billion. The exclusions retroactively apply to September 24, 2018 and are slated to remain in effect through August 7, 2020. Any claims for duty refunds require affirmative action on the part of importers in the form of post-entry corrections or protests.

The exclusions are available for any product that meets the description as set out in Annex A to Federal Register Notice 84 FR 69012 regardless of whether or not the importer filed an exclusion request. This means that your company might benefit from the exclusion no matter who files the request.

Scroll down to view the list of new products exclusions (Courtesy of GDLSK)

What importers should know:

The situation remains very fluid. We are advising clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exclusion.
  • Consider sourcing options in other countries besides China.

If you have questions regarding your shipments, please contact: Bill Skinner.

 

December 12, 2019 – Newly Excluded Items from China 301 List 3

1) 0304.72.5000

2) 0304.83.1015

3) 0304.83.1020

4) 0304.83.5090

5) 8507.20.4000

6) 8708.50.8500

7) 8708.94.7510

8) 8708.99.8105

9) 8712.00.1520

10) Bananas, freeze-dried and sliced, put up for retail sale in packages each having a net weight of 15 g (described in statistical reporting number 0803.90.0045)

11) Apples, freeze-dried and sliced, put up for retail sale in packages each having a net weight of 15 g (described in statistical reporting number 0813.30.0000)

12) Peaches, freeze-dried and sliced, put up for retail sale in packages each having a net weight of 15 g (described in statistical reporting number 0813.40.4000)

13) Pears, freeze-dried and sliced, put up for retail sale in packages each having a net weight of 15 g (described in statistical reporting number 0813.40.9000)

14) Mixtures of strawberries and bananas, freeze-dried and sliced, put up for retail sale in packages each having a net weight of 15 g (described in statistical reporting number 0813.50.0020)

15) Mixed seasoning of Himalayan salt, tomato flake, lemon peel, basil, black pepper and sage, put up for retail sale in packages each weighing 200 g (described in statistical reporting number 2103.90.8000)

16) Molded blocks of wood pulp cellulose sponge, each measuring not over 105 cm by 105 cm by 40 cm (described in statistical reporting number 4823.70.0040)

17) Satin woven fabrics of artificial filament yarn, consisting of 63 percent rayon and 37 percent combed cotton, dyed, weighing not over 211 g/m2 (described in statistical reporting number 5408.32.9050)

18) Nonwoven rug pads, each comprising a 100 percent polyester fiber fabric, face laminated to a thermoplastic elastomer and weighing over 150 g/m2 (described in statistical reporting number 5603.94.1090)

19) Ropes of man-made fibers, each measuring 1.7 m or more but not over 6.1 m in length with breaking strength of 22 kg or more but not over 230 kg, with hooks of base metal and locking mechanisms to maintain tension on the rope (described in statistical reporting number 5609.00.3000)

20) Gates for confining children or pets, of steel not coated or plated with precious metals (described in statistical reporting number 7323.99.9040)

21) Steel electrical boxes, designed for lighting fixtures, switches, receptacles or outlet devices, such boxes weighing 0.4 kg or more but not over 3.5 kg, 10.2 cm in length or more, 5 cm or more but not over 10.2 cm in width and 12 cm in height, the foregoing UL listed (described in statistical reporting number 7326.90.8688)

22) Telescoping multi-position ladders of aluminum, each with maximum reach height of 4.2 m or more but not over 7.9 m, with locks to adjust the telescoping positions and with load rating of 136 kg or more but not over 170 kg (described in statistical reporting number 7616.99.5130)

23) Towers of aluminum, unassembled, each designed to be mounted on a boat, incorporating at least one point to which a tow rope may be fastened for towing individuals participating in water sports such as wakeboarding, the assembled tower measuring not over 1.9 m in height and no more than 2.5 m in width (described in statistical reporting number 8302.49.6055)

24) Towers of aluminum, unassembled, each designed to be mounted on the body of a boat, incorporating a tow point for towing individuals participating in water sports such as wakeboarding, the assembled tower measuring not over 1.6 m in height and not over 2.5 m in width (described in statistical reporting number 8302.49.6055)

25) Digital electronic scales, not for personal use, not for continuous weighing, other than constant-weight scales, each measuring no more than 195 mm by 165 mm by 60 mm, having a maximum weight capacity of 5 kg, and having the ability to reset tare (zero point reset) multiple times while adding to the article being weighed (described in statistical reporting number 8423.81.0040)

26) Electronic calculators for desktop use, solar-powered with battery backup (other than with engineering, trigonometric, scientific or construction functions), each measuring 11 cm or more but not over 25 cm in length, 7 cm or more but not over 19.5 cm in width, and 1 cm or more but not over 5 cm in height and weighing 0.058 kg or more but not over 0.34 kg (described in statistical reporting number 8470.10.0040)

27) Electronic calculators, handheld, solar-powered or battery powered (other than with engineering, trigonometric or scientific functions), each measuring 10 cm or more but not over 16 cm in length, 5 cm or more but not over 9 cm in width, and 0.5 cm or more but not over 2 cm in height and weighing 0.02 kg or more but not over 1 kg (described in statistical reporting number 8470.10.0040)

28) Electronic calculators, handheld, solar-powered or battery powered, with scientific, trigonometric or other advanced mathematical functions, each measuring 11 cm or more but not over 18 cm in length, 6.5 cm or more but not over 9 cm in width and 1 cm or more but not over 3 cm in height and weighing 0.04 kg or more but not over

0.25 kg (described in statistical reporting number 8470.10.0040)

29) Electronic calculating machines, each incorporating a 2 color ink roller printing device, that operates with an external source of power, with a vacuum fluorescent display (VFD), measuring 24 cm or more but not over 27 cm in length, 18 cm or more but not over 21 cm in width and 5 cm or more but not over 7 cm in height and weighing 0.5 kg or more but not over 1.5 kg each (described in statistical reporting number 8470.21.0000)

30) Electronic calculating machines, each incorporating a parallel ribbon ink printing device, that operates with an external source of power, with a vacuum fluorescent display (VFD), measuring 31.75 cm or more but not over 34.3 cm in length, 21.5 cm or more but not over 25.4 cm in width and 7.5 cm or more but not over 9 cm in height and weighing 1.6 kg or more but not over 2 kg each (described in statistical reporting number 8470.21.0000)

31) Electronic calculating machines, each incorporating a ribbon ink printing device, that operates with an external source of power, with a vacuum fluorescent display (VFD), measuring 32 cm or more but not over 35 cm in length, 22 cm or more but not over 26 cm in width and 8 cm or more but not over 9 cm in height and weighing 1.75 kg or more but not over 2 kg each (described in statistical reporting number 8470.21.0000)

32) Electronic calculating machines, each incorporating an ink roller printing device, capable of operating with an external source of power or battery power, with liquid crystal display (LCD), measuring 19 cm or more but not over 26.5 cm in length, 8 cm or more but not over 20 cm in width and 4 cm or more but not over 7 cm in height and weighing 0.3 kg or more but not over 0.7 kg each (described in statistical reporting number 8470.21.0000)

33) Other static converters, rectifiers and rectifying apparatus, with ABS plastic damage resistant box, input and output voltage cables, weighing not more than 0.35 kg, measuring not more than 17 cm in length and 12 cm in width (described in statistical reporting number 8504.40.9550)

34) Light-emitting diode (LED) headlights, light bars and cube lights, of a kind designed to be mounted on off-road, all-terrain vehicles (described in statistical reporting number 8512.20.2040)

35) Brake drums of grey cast iron for the motor vehicles of headings 8701 to 8705 (other than tractors for agricultural purposes), with an inside diameter of 38 cm or more but not over 42 cm (described in statistical reporting number 8708.30.5020)

36) Brake discs of grey cast iron for the motor vehicles of headings 8701 to 8705 (other than tractors for agricultural purposes), with an outside diameter of 32 cm or more but not over 44 cm (described in statistical reporting number 8708.30.5030)

37) Wheel hubs of cast iron, for off-road vehicles of headings 8701 to 8705, each weighing 2 kg or more but not exceeding 4 kg (described in statistical reporting number 8708.99.5300)

38) Upholstered dining chairs, with a wooden frame, other than of teak (described in statistical reporting number 9401.61.4011)

39) Chairs with three legs, with frames of steel held together by elastic cord and textile seating material, for outdoor non-household use (described in statistical reporting number 9401.79.0015)

40) Chairs, each with four legs, a frame of aluminum held together by elastic cord and textile seating material, for outdoor non-household use (described in statistical reporting number 9401.79.0015)

41) Entry tables of wood other than bent-wood, each measuring 180 cm or more but not over 185 cm in length, 80 cm or more but not over 83 cm in height and over 40 but not over 45 cm in width, with tin top (described in statistical reporting number 9403.60.8081)

42) 8-light circular electric household chandeliers, of base metal other than brass (described in statistical reporting number 9405.10.6010)

43) Electric household table lamps, with bases of wood, presented with shades, not more than 64 cm in height, each weighing not more than 3 kg (described in statistical reporting number 9405.20.8010)

44) Non-electrical wall candelabras, of wood, each with 3 wrought iron candle holders (described in statistical reporting number 9405.50.4000)

The functionality for the acceptance of the sixth round of products of China excluded from Section 301 duties will be available in the Automated Commercial Environment (ACE) as of Noon, December 19, 2019.

GUIDANCE

Instructions for importers, brokers and filers on submitting entries to CBP containing products granted exclusions by the USTR from the Section 301 measures as set out in 84 FR 69012

*   In addition to reporting the regular Chapters 03, 08, 21, 48, 54, 56, 73, 76, 83, 84, 85, 87 and 94 classifications of the HTSUS for the imported merchandise, importers shall report the HTSUS classification 9903.88.36 (Articles the product of China, as provided for in U.S. note 20(oo) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative) for imported merchandise subject to the exclusion.
*   Importers shall not submit the corresponding Chapter 99 HTS number for the Section 301 duties when HTS 9903.88.36 is submitted.

ADDITIONAL INFORMATION

Duty exclusions granted by the USTR are retroactive for imports on or after the initial effective date of September 24, 2018.   To request a refund of Section 301 duties paid on previous imports of products granted duty exclusions by the USTR, importers may file a Post Summary Correction (PSC) if within the PSC filing timeframe. If the entry is beyond the PSC filing timeframe, importers may protest the liquidation.

Reminder: When importers, brokers, and/or filers are submitting an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise, refer them to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTS when 98 or 99 HTS are Required).

Imports which have been granted a product exclusion from the Section 301 measures, and which are not subject to the Section 301 duties, are not covered by the Foreign Trade Zone (FTZ) provisions of the Section 301 Federal Register notices, but instead are subject to the FTZ provisions in 19 CFR part 146.

For ease of reference, Summaries of Section 301 Duties and Product Exclusion Notifications are provided below:

[table 1]

USTR To Begin Accepting Exclusion Requests On October 31 For Chinese Imports On Section 301 List 4A

The U.S. Trade Representative (USTR) has announced it will accept requests for exclusion from additional tariff rates of 15% duties imposed on Chinese imports listed on Section 301, Tranche 4, beginning on October 31, 2019. The exclusion requests may be submitted via the Web Portal beginning at noon on October 31 through January 31, 2020.

The products covered by Tranche 4 are listed in Annex A.   The subcategories include a wide range of products, detailed in the Federal Register publication on August 20, 2019 and shown HERE.

We urge individual importers, associations and others seeking exclusions from the tariffs to register on the site on October 31. More information and guidance on the exclusion process, and a sample form for filers, is available HERE.

What importers should know:

The situation remains very fluid. We are advising clients to do the following:

  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exclusion.
  • Consider sourcing options in other countries besides China.
  • Check back at www.wbskinner.co for tariff news and updates.

If you have questions regarding your shipments, please contact us HERE.

New Guidance Issued by CPB on Section 301 Tariff Refunds

The Office of the U.S. Trade Representative announced that on October 31, 2019 it will begin accepting tariff exclusion requests for Chinese imports subject to an additional 15 percent tariff (List 4 tariffs) that went into effect on September 1, 2019.  Exclusion requests will be received via USTR’s online exclusion request processing portal at exclusions.ustr.gov; details regarding the application process will be released in the Federal Register this week.
 
To see more, click HERE.

U.S. Holds Off On Planned Tariffs; China Plans Additional Purchases

The planned increase in tariffs on Chinese imports this week has been shelved in an initial agreement reached by the U.S. and China. The Administration said it would forego the tariff hike from 25% to 30% scheduled to go into effect today (October 15) on $250 billion worth of annual imports. In exchange, the Chinese would increase purchases of U.S. farm products.

With many details yet to be worked out, it is unclear what further effects the initial agreement will produce, including the fate of additional U.S. tariff increases scheduled to go into effect in December on electronics, apparel, and other imported consumer goods. While China’s exports to the U.S. have been slumping — by more than one-fifth in September vs. one year ago, some observers saw the results of last Friday’s talks as potentially in Beijing’s favor, as China prefers to slow down negotiations. Still, tensions were seen to be reduced between the two countries, which had been rising since talks broke down in the Spring.

What importers should know:

The situation remains very fluid. We are advising clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exemption.
  • Consider sourcing options in other countries besides China.

If you have questions regarding your shipments, please contact: Bill Skinner.

Tariffs On Chinese Imports Delayed: What Importers Should Know

An additional increase in tariffs on $250B of goods imported from China has been delayed by two weeks, from October 1 to October 15. President Trump announced the move as a goodwill gesture ahead of planned trade talks with Chinese officials in Washington next month.

The tariffs scheduled to increase from 25% to 30% were chiefly on non-consumer materials used by businesses. Although the U.S. and China remain far apart on many issues and further tariffs on Chinese goods are threatened, news of the postponement was seen as brightening the outlook for the October trade talks.

Earlier Wednesday, China announced a range of U.S. goods to be exempted from 25% extra tariffs announced last year. However, those did not include exports such as soybeans and other products whose increased tariffs are exerting pressure on American farmers.

Click HERE for list of impacted goods.

What can importers do?

The situation remains very fluid. We are advising clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • If you have a question about whether your products are affected by these or other tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file a claim for an exemption.
  • Consider sourcing options in other countries besides China.

Tariffs On Chinese Goods Amended; Some Increases Delayed and Others Removed From USTR List

The Trump Administration announced today that some Chinese imported goods slated to face a new round of tariffs on September 1 will now be exempted until at least mid-December. The office of the U.S. Trade Representative said Tuesday that it will instead delay the new tariffs on many major categories of items, including smartphones, laptop computers, toys and some other items, until Dec. 15. USTR also said that some products would be removed from the tariff lists entirely, based on health, safety, national security and other factors.

The complete lists of affected goods can be viewed HERE.

The delay in imposition of the tariffs earned a reprieve for American negotiators, who have been struggling to re-establish trade talks with the Chinese officials.  And consumers will be relieved to know that electronics, smartphones, toys and other items will not be slapped with additional tariffs through at least much of the holiday shopping season.

WHAT TO KNOW:

The situation remains very fluid. WB Skinner is advising our clients to do the following:

  • Know whether your imports are affected and decide what you’re going to do about it.
  • Consider sourcing options in other countries besides China.
  • If you have a question about whether your products are affected by the tariffs, we may be able to help. We can tell you what impact the tariffs will have on your shipments, and help you file an exemption.