The broadest set of changes to tariff classification in five years is set to take effect toward the end of January, as the latest set of amendments to the World Customs Organization's Harmonized System tariff nomenclature is implemented in the Harmonized Tariff Schedule of the U.S. Announced by a presidential proclamation published Dec. 28, the changes are slated to take effect 30 days after that, on Jan. 27 (see 2112270032). This is the first part of International Trade Today's multi-part summary, covering fish and seafood products and vegetable products of Chapters 1-14 of the HTS.
Customs duty
A customs duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs duty rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight. U.S. customs duties are listed in the Harmonized Tariff Schedule of the United States.
In order for a vehicle assembled in North America to be originating, six of seven super core parts -- such as the engine, transmission and suspension system, steering system and body -- have to be at least 75% North American, once the transition from NAFTA to USMCA is done.
Gary Yacoubian, CEO of high-end speaker company SVS wants people to imagine going to bed one night, “and you wake up the next morning, and your cost of goods just went up by 15%,” he told a CES 2022 trade and supply chain workshop Jan. 5 of the Section 301 tariffs on finished speakers and subwoofers his company imports from China. Speakers and subwoofers with List 4A tariff exposure were originally dutied at 10% when they took effect in September 2019, and were later raised to 15%, then cut to 7.5% with the February 2020 enactment of the phase one trade deal with China.
Auto parts and tools exported to Canada for use at auto races then re-imported don't qualify for duty-free treatment under a U.S. goods returned tariff provision for "tools of the trade," said the Court of International Trade in a Dec. 30 opinion. Though Porsche Motorsport North America contended that the goods were exported to support race teams, CIT Judge Stephen Vaden found that the auto parts and tools were exported to generate sales to race teams rather than for a professional purpose, as required under subheading 9801.00.8500.
Importers of nonwoven wipes entered under certain tariff subheadings should file post-summary corrections within the next 60 days to reflect changes to a Section 301 tariff exclusion recently amended by the Office of the U.S. Trade Representative, CBP said in a CSMS message Dec. 27.
The presidential proclamation amending the Harmonized Tariff Schedule to implement a hefty five-year update will likely be published in the coming days, which would set an effective date in late January for the lengthy list of changes. The White House released the proclamation Dec. 23 (see 2112230012), though a publication date in the Federal Register had not yet been scheduled as of press time. The date of publication triggers a 30-day countdown before the changes take effect.
Five Republican Senators filed an amicus brief on Dec. 15 with the U.S. Supreme Court, urging it to take up a case over the limits of the president's authority under the Section 232 national security tariff statute. The brief, signed by Sens. Pat Toomey, R-Pa.; Mike Crapo, R-Idaho; Bill Cassidy, R-La.; Mike Lee, R-Utah; and Ben Sasse, R-Neb., argues against a U.S. Court of Appeals for the Federal Circuit opinion spurning time limits imposed in the statute. The time limits are crucial to ensuring that "Congress makes the major policy decisions regarding the regulation of foreign commerce," the lawmakers said.
The Commerce Department set the 12-month 2022 value-added tariff preference level for certain apparel imported directly from Haiti eligible to receive duty-free treatment under the Haitian Hemispheric Opportunity Through Partnership for Encouragement Act (HOPE). For the one-year period Dec. 20, 2021, through Dec. 19, 2022, the recalculated quantity of imports eligible for preferential treatment under the value-added TPL is 367,770,223 square meters equivalent (SME). Apparel articles entered in excess of this TPL will be subject to otherwise applicable duty rates.
The International Trade Commission is recommending a four-year extension of Section 201 solar safeguard tariffs, with the rate of duty on solar modules and out-of-quota solar cells decreasing by 0.25% per year from its current level of 15% until it reaches 14% in the year prior to expiration in February 2026, the ITC said in a report sent to President Joe Biden, according to a notice released Dec. 13.
The Generalized System of Preferences benefits program has been expired for almost a year, but Rep. Jackie Walorski, R-Ind., and Rep. Stephanie Murphy, D-Fla., are suggesting that reauthorization include changes to how Competitive Need Limitations are calculated so that fewer products are removed from the tariff benefit, and so that products may be more easily restored if the import levels no longer qualify.