The U.S. Chamber of Commerce remains concerned for the ramifications of ending country exemptions to the Section 232 tariffs on steel and aluminum, the trade group said in a news release. "The U.S. must not expand tariffs or quotas on steel and aluminum imports to additional countries on June 1, as has been threatened," it said. Already, steel costs have increased, as has the volatility in aluminum prices, the Chamber said. "Extending the reach of these tariffs and quotas to additional countries is certain to provoke widespread retaliation from abroad and would put at risk the economic momentum achieved through the administration’s tax and regulatory reforms. We urge the administration to take this risk seriously.” The country exemptions for Canada, Mexico and the European Union are set to end on June 1 (see 1805040046).

Imports at major U.S. retail container ports are expected to grow “steadily” throughout the summer despite the Trump administration’s threat to impose 25 percent tariffs on goods from China, the National Retail Federation said May 9 in its monthly port-tracker report. “With proposed tariffs yet to be officially imposed, retailers are stocking up on merchandise that could soon cost considerably more,” NRF said. “If tariffs do take effect, there’s no quick or easy way to switch where these products come from.” U.S. ports handled 1.54 million 20-foot-long cargo containers or their equivalents in March, NRF said. Though that was down 8.6 percent from February and 0.7 percent lower year over year, April was estimated at 1.73 million containers, a 6.4 percent increase from the same month a year earlier. NRF also is forecasting monthly increases through September, including the possibility of record imports in July and August. The first half of 2018 is expected to total 10.4 million containers, an increase of 5.8 percent over the first half of 2017.

U.S. exports to China grew in 2017, the U.S.-China Business Council announced in a report released just before an American delegation travels to China to confront that country's intellectual property rights and other trade violations. The report says that the U.S. exported more than $127 billion in goods to China, its third largest market. Exports to China increased by 86 percent from 2006 to 2017, while exports to all other countries only increased 21 percent. "Despite trade barriers that frustrate full market access, US exports to China continue to contribute to US economic growth," USCBC President John Frisbie said. Although the business council has been concerned for years with Chinese government actions favoring domestic producers (see 1610050048), it has reacted with alarm to the tariff solution the administration is proposing (see 1804060033).

China, from which Intel drew more than 20 percent of its 2017 revenue, is “one of our fastest-growing segments,” and so “we're counting on our leaders and the leaders of the world to go resolve these issues,” CEO Brian Krzanich said on an April 26 earnings call of the looming threat of U.S. tariffs on Chinese imports and the retaliatory Chinese actions that might follow (see 1804060033). “We believe in fair trade,” Krzanich said. “We believe that countries and companies need to be able to play in markets fairly and compete, and we're counting on this getting worked out. That's very important to us.”

INLT, a new customs broker and “logistics tech start-up,” on April 10 announced “final U.S. government approval and launch of its cloud-based web application,” it said in a press release. The brokerage’s cloud-based software will save “importers and freight forwarders time and money” by connecting importers to their forwarders for classification of goods, submission of documents, tracking and transmission to CBP, the press release said. “INLT is freight agnostic, allowing importers to continue with their current partners while deriving operational, compliance, and cost benefits of INLT’s application,” the company said. INLT’s software will also allow forwarders to “connect their agents globally via INLT’s first of its kind cloud-based application reducing the need for calls, emails, and faxes in a heavily paper-driven industry,” it said.

Importers should keep an eye out for the effects new duties on steel and aluminum have on importer bond limits, said Liz Gant, a corporate regulatory compliance analyst at Samuel Shapiro & Company, in the company's monthly newsletter. CBP "uses duties, taxes and fees based on the previous 12 months to evaluate the sufficiency of your bond," she said. That means that if the Section 232 tariff duties remain in effect for an extended period, it could impact bond sufficiency. "While the additional tariffs are in place, bond sufficiency should be monitored by the importer closely," she said. "An importer does not want to be surprised if Customs deems their bond insufficient and a shipment is delayed while the importer gathers the information required for the surety."

Both the U.S. proposal for Section 301 tariffs (see 1804040019) and the Chinese response (see 1804030070) are likely stage-setting for future negotiations, said Merrill Lynch analysts in an April 4 note to investors. "Despite the exchange of tariff threats, we believe there is still room for negotiation between the US and China," Helen Qiao and Sylvia Sheng said in the research note. "We maintain our view that China will continue its 'carrot and stick approach,' threatening retaliation but also proposing to expand its imports of US products, cut the auto duty, and ease restrictions for US companies investing and selling in China in negotiations," the analysts said. "As a result, we expect the final version of both the US and China trade measures to be more toned down relative to the initial announcement."

Flexport's clients would have paid about $13.6 million in additional customs duties if the proposed Section 301 tariffs (see 1804040019) were in place in 2017, the company's CEO Ryan Petersen said in a blog post. "While Flexport believes that global trade is absolutely essential to a free and prosperous society, our immediate focus in the coming weeks will be on the impact to our clients," he said. "We also believe these algorithmically chosen new taxes -- which were 'drafted to achieve the lowest consumer impact' -- are navigable by a resilient supply chain industry."

Importers that are lobbying the executive branch so that they can continue to bring foreign metals in without tariffs may need to disclose their activities under the Foreign Agents Registration Act, lawyers from Covington & Burling wrote in a client advisory March 28. It may seem strange that lobbying on commercial tariffs could trigger FARA, they wrote, but they pointed to the history of tariff lobbying to show how it could happen. When SUVs were reclassified as trucks, rather than cars, and therefore imports were subject to a 25 percent tariff rather than a 2.5 percent tariff, heavy lobbying ensued. At a congressional hearing in 1991, senators asked whether that lobbying should have been covered by FARA. "In testimony and written submissions before Congress examining the automobile tariff lobbying, Department of Justice officials stressed that lobbying directed at 'enlarging the U.S. market for goods produced in [another] country' was predominantly advancing a foreign interest," the advisory said.

The Chapter 11 bankruptcy filing by Toys 'R' Us could reduce new orders of toys in the near future, said Steve Pasierb, president of The Toy Association, in a letter. "In addition to the direct negative impact on some companies, the flood of liquidation product from [Toys 'R' Us] can likely weaken sales at both mass and specialty retailers," he said. "Likewise, there will be a short-term negative influence on orders coming into our manufacturing members, at least until the ramp-up happens to stock for the 2018 holiday season." The toy industry is now "at an inflection point," he said.