The president must strictly adhere to statutory timelines when setting Section 232 tariffs, and can’t subsequently modify or adjust those tariffs beyond those legal deadlines without conducting another formal investigation, the Court of International Trade said in a July 14 decision. The court found that President Donald Trump acted outside of these deadlines when he raised tariffs on Turkish steel from 25% to 50% in August 2018 (see 1808100003), granting two importers refunds of duties collected as a result of the tariff increase.
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.
On the last day the Office of the U.S. Trade Representative had to announce a Section 301 penalty on France, it said it would hike tariffs by 25% on cosmetics, soap and handbags -- but not yet. In the early evening July 10, the USTR said it chose to raise tariffs on 21 tariff lines, not the 63 it initially identified, and that a 25% levy would be added to regular tariffs on the goods. If importers brought in the same volume in 2021 that they did in 2019, that would raise about $325 million annually.
A three-judge panel at the Court of International Trade will hear a recently filed Section 232 challenge that opens a new front in the battle of steel importers against the tariffs. Maple Leaf Marketing (MLM), distributor of oil industry pipe that is exported from the U.S. to Canada for processing before being re-imported in improved form, says that CBP in April illegally expanded Section 232 tariffs to cover U.S. goods returned under subheading 9802.00.0050 (see 2004130056).
Because the Office of the U.S. Trade Representative was in such a hurry on implementation, some USMCA details needed by traders are either wrong or missing. For instance, there are tariff numbers that are invalid, because negotiators used the 2012 Harmonized Tariff Schedule numbers. On a call with trade professionals July 6, CBP staffers said importers or exporters can email CBP with a tariff number in question, and the agency can provide guidance on how to claim USMCA treatment for those goods.
2020 outpaced even the active 2019 in terms of the frequency of Harmonized Tariff Schedule updates. Most of the updates implemented new Section 301 exclusions and changes and extensions for existing ones. Other major changes included new Section 232 tariffs on steel and aluminum "derivatives" and the withdrawal of Generalized System of Preferences benefits for many goods from Thailand In all, 13 revisions were issued prior to the mid-year Revision 14, as follows:
Importers continue to ask CBP what they should do about importing used cars that were built in Canada, the U.S. or Mexico, when they cannot know if those vehicles meet the new regional value content standards.
The U.S. Court of Appeals for the Federal Circuit on June 2 affirmed a lower court ruling that found plastic Apple iPad 2 “smart cover” cases are classifiable in the tariff schedule as articles of plastic, not as accessories for automatic data processing machines, despite their additional function as a stand.
A group of 160 companies and trade groups is asking Congress to urge the administration to bring back temporary duty deferral, and to lift all Section 301 tariffs, or at the very least, improve the percentage of exclusion approvals and extend them for a year.
CBP issued the following releases on commercial trade and related matters:
European Union Trade Commissioner Phil Hogan said although it's not easy managing the trade relationship with the U.S., the EU and U.S. are still talking. “We’ve resumed conversations with the U.S. some weeks ago,” he said. “We’re up for a small confidence-building deal with the United States -- we have a lot of things we agree on. We’re waiting for the timing when President [Donald] Trump has made up his mind whether he wants to have a deal or not. If he does, we’re ready.”