Dockworkers' strikes, hurricanes and the trade war have all been major problems for importers and exporters at various points in the last 20 years, but the impact of COVID-19 dwarfs them all, panelists and listeners said on a webinar during the National Association of Foreign-Trade Zones virtual conference May 13.
House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and Rep. Peter DeFazio, D-Ore., want the U.S. to withdraw from the World Trade Organization. If their resolution, and the resolution introduced by Sen. Josh Hawley, R-Mo., were to pass before the deadline set up in the agreement that founded the WTO, and Trump either signed it, or they overrode his veto, the U.S. would exit the institution. “It is time for the United States to withdraw from this institution and start prioritizing American workers over international corporations,” Pallone said in a press release.
Rep. Kevin Brady, R-Texas, would like to join with some congressional Democrats in a conversation with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer about “flexibility or time extension on the tariff relief,” he said during a conference call with reporters May 13. Brady, the ranking member of the House Ways and Means Committee, said that although tariff savings from a deferral of regular customs duties may not “seem large for individual businesses, it can be very important for them retaining their workers and riding the crisis out.”
While the U.S.-Mexico-Canada Agreement allows importers to certify goods as deserving tariff benefits -- not just producers or exporters -- KPMG warned webcast listeners that if the importer and producer aren't related parties, it could be a mistake. Andrew Doornaert told listeners on May 11, “It would be a risk if you’re just relying on the exporter’s old NAFTA certificate.”
The Democratic members of the House Ways and Means Committee have told the leaders of CBP and the Department of Homeland Security that the failure to establish the Forced Labor Enforcement Task Force by the April 28 deadline in statute is unacceptable.
Several Republican senators told reporters at the Capitol May 11 that there's an appetite to punish China because of its lack of transparency on the spread of the novel coronavirus. President Donald Trump on April 30 floated using tariffs on Chinese imports to retaliate for the suppression of coronavirus details (see 2005010064), but has backed away from such talk more recently (see 2005070039). Assistant Majority Leader Sen. John Cornyn, R-Texas, said, “Well it seems like our relationship with China has just continued to deteriorate.” He added that it appears that China hid information in the early weeks of the outbreak in order to stockpile protective gear, “and otherwise protect themselves at the expense of the rest of the world.”
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Rep. Terri Sewell, D-Ala., agree that revisiting the tariff deferral for importers with lost revenue could be worthwhile for Congress. Both were responding to questions from International Trade Today on May 12, during conference calls with reporters. Grassley said, “It sounds like something we ought to be looking into.” Some other Republican senators have also offered support for the idea (see 2005050045)
The Office of the U.S. Trade Representative is disinclined to offer an informed compliance period for most importers, “because most of the rules of origin have remained essentially the same” as what was in NAFTA, so CBP can honor the U.S.-Mexico-Canada Agreement claims with the same information that backed NAFTA claims, according to Brenda Smith, executive assistant commissioner of CBP’s Office of Trade.
Sen. Josh Hawley, R-Mo., announced that he's introducing a joint resolution that the U.S. should withdraw from the World Trade Organization. Such a resolution, if it were to pass, would not be binding.
Backpacks imported from China that faced a 10% tariff, then a 15% tariff, then a 7.5% tariff -- in addition to the standard 17.6% tariff -- can now be excluded from the additional tariff, as long as they are a certain size. Luggage stores that fretted over tariffs that first went up in October 2018 (see 1905090012) say the break won't make a difference now.