International Trade Today is providing readers with the top stories from Nov. 16-20 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
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.
C.H. Robinson “identified potential savings for its customers of roughly $980 million related to exclusion refunds” since the first Section 301 tariffs were put in place in 2018, the company said in a recent news release. Some 96% of those are “product-specific which require a more complex, time-consuming analysis for qualification,” it said. “The U.S.-China trade war has added another layer of complexity to what has been a challenging global transportation market over the past year,” said Mike Short, president of global forwarding at C.H. Robinson. “As we have consulted with businesses of all sizes, it’s clear that the biggest barriers to duty recovery for these companies are a lack of time, data, and expertise to navigate the complex and lengthy application process.” The last of the exclusions expire Dec. 31.
Wireless home audio systems maker Sonos reported higher-than-expected revenue, an $18.4 million profit and growth in new households in Q4. Gross margin increased 530 basis points to 47.5% as the company was “largely exempt from tariffs,” except for a rate of 7.5% on component products in September and 25% on accessories throughout the quarter, Chief Financial Officer Brittany Bagley said on a Nov. 18 investor call. Adjusted EBITDA increased 22% to a record $109 million, including $32 million in tariffs, of which Sonos will receive a refund of about $30 million, which will largely mitigate the ongoing impact of tariffs in fiscal year 2021, she said. The company plans to have its production shift to Malaysia completed by summer as part of a plan to diversify manufacturing venues, Bagley said. Sonos system products revenue increased 17%, driven by strength in the installer channel, but the Amp and Arc products are supply constrained. The company is investing in expedited airfreight shipments to better meet demand but will continue to be low on stock on key products in the current quarter, Bagley said. It expects to be fully stocked across all products by the end of fiscal Q2. Sonos doesn’t provide quarterly guidance, but it expects the holiday quarter to contribute “slightly less total revenue” as a percentage of the total fiscal year than last year, Bagley said. She said supply chain constraints are “a broader industry wide challenge” that aren't unique to Sonos. The company is feeling impacts from component and container availability, port congestion, and higher shipping and logistics costs.
A hotly contested exemption from safeguard duties on solar cells has now been terminated -- at least for the time being -- after the Court of International Trade on Nov. 19 declined to expand an injunction to include the administration’s latest bid to withdraw the exclusion, and lifted a temporary restraining order against the withdrawal (see 2010260025 and 2011090033). The elimination of the exemption takes immediate effect, according to a CBP spokesperson.
Complaint filings at the Court of International Trade seeking to have the Section 301 lists 3 and 4A tariff rulemakings vacated and the duties refunded (see 2009210025) slowed to a trickle in November, with fewer than 10 filed within the last two weeks. Of the roughly 3,700 complaints filed since Sept. 10, about 140 have been filed since Sept. 24. That’s the two-year anniversary date of List 3 taking effect and was within the statute of limitations that many lawyers cited under court rules to establish the timeliness of their actions. A plaintiff must file an action within two years “after the cause of action accrues,” court rules say. Lawyers in the subsequent actions will try to establish that the clock started when their importer clients first paid the tariffs.
The European Council approved a tariff package that would eliminate customs duties on U.S. lobster imports in exchange for reduced U.S. duties on several European Union products, including prepared meals, crystal glassware, surface preparations, propellant powders and lighters (see 2008210028). The package, which the European Union said would be the first EU-U.S. tariff reduction in two decades, could increase market access for both EU and U.S. traders by about $240 million per year, the council said in a Nov. 18 news release. The package needs European Parliament approval. If enacted, it would take effect retroactively from Aug. 1 for five years.
The Court of International Trade on Nov. 18 weighed in on the meaning of “not minced” and “packed in oil” for seafood preparations in the tariff schedule, finding tuna salad pouches imported by StarKist are both, and must be entered under a high 35% duty rate.
International Trade Today is providing readers with the top stories from Nov. 9-13 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
The Cheese Importers Association of America, in a Nov. 16 update on its political activities, told members it is working on a joint letter with the European Dairy Association that will go to the Biden Transition Team and the European Commission on the Airbus-Boeing dispute, calling for an end to tariffs on both sides. The CIAA also said it was asked to join the Coalition Against the Restaurant Tariffs, a group of suppliers and restaurants, to lobby Congress about these tariffs.
Delays are possible in processing post summary corrections and protests related to the Section 232 tariffs on Canadian aluminum, CBP said in a Nov. 12 CSMS message. President Donald Trump recently ended the Section 232 tariffs on aluminum from Canada and will retroactively allow duty-free treatment back to Sept. 1 (see 2010280024). Importers should file PSCs “to correct entries filed from September 1, 2020, through October 27, 2020 that may be eligible for refunds,” CBP said. “In the event that a subject entry has liquidated, a protest may be filed seeking a refund.” CBP warned there may be delays because there was a “significant number of entry summary lines filed” during the Sept. 1 through Oct. 27 period.