Customs duty

CBP is issuing an interim final rule to implement rules of origin provisions for the U.S.-Mexico-Canada Agreement that will take effect July 1. The interim rule creates new Part 182 to the customs regulations for USMCA, and amends existing NAFTA regulations under 19 CFR Part 181 so that they no longer apply to entries on or after July 1. Most of 19 CFR Part 182 is vacant, but CBP says it will fill out the regulations over the coming year. Comments on the interim regulations are due Aug. 31.

CBP on June 29 posted a series of fact sheets on upcoming requirements under the U.S.-Mexico-Canada Agreement that are set to take effect July 1. The fact sheets highlight key differences between USMCA and NAFTA, including in the areas of customs duties, temporary admission, treatment of customs duties, most favored nation tariff rates, indirect materials and intermediate materials. Others cover USMCA provisions on regional value content, accumulation, recovered materials, sets and kits, accessories, remanufactured goods and fungible materials. The fact sheets should be considered guidance documents for informational and advisory purposes only, and are not intended to have legal or binding effect, CBP said.

Section 301 tariff costs motivated a third of global supply chain “leaders” to move sourcing out of China or to make plans to do so in the next three years, Gartner reported June 24. Gartner, a research and advisory company, canvassed 260 fulfillment companies and contract manufacturers in February and March and found COVID-19 was “only one of several disruptions that have put global supply chains under pressure,” it said. The U.S.-China trade war “made supply chain leaders aware of the weaknesses of their globalized supply chains and question the logic of heavily outsourced, concentrated and interdependent networks,” Gartner said. China for decades was the “go-to destination for high-quality, low-cost manufacturing,” but the tariffs abruptly changed that profile, it said. The Section 301 duties raised supply chain costs by up to 10% for more than 40% of respondents, it said. For more than a quarter of them, “the impact has been even higher,” it said. Vietnam, India and Mexico are top alternative countries of origin. The desire to make supply networks more “resilient” is the second main motivator behind tariffs chasing companies out of China, it said.

The Office of the U.S. Trade Representative is requesting comments on whether all the tariff exclusions granted to Chinese imports on Section 301 List 4 that are set to expire Sept. 1 should be extended for up to another year, it said in a notice. The agency will start accepting comments on the extensions on July 1. The comments are due by July 30, it said. Each exclusion will be evaluated independently. The evaluation's focus will be whether, despite the first imposition of these additional duties, the particular product remains available only from China. The companies are required to post a public rationale.

The labor provisions of the U.S.-Mexico-Canada Agreement on free trade “don’t only apply to U.S. companies doing business in Mexico,” regulatory law expert Ignacio Sanchez, with DLA Piper, told a webinar held June 24 to prepare clients for the treaty that takes effect July 1. USMCA also applies to “any facility producing goods in Mexico” for import into the U.S., he said.

The Office of the U.S. Trade Representative will seek comments on whether to increase tariffs on the products already targeted in the Airbus dispute or add other EU products to the list, the agency said in a notice. USTR also seeks input on whether any EU products should be removed from the list. Comments are due July 26, with the docket opening June 26. The agency previously went through a similar process but made only minimal changes to the existing list of products subject to the tariffs (see 2002180040).

The Office of the U.S. Trade Representative is requesting comments on whether to extend by up to another year tariff exclusions on Chinese imports on Section 301 List 2 that are set to expire Sept. 20 (see 1909180013), it said in a notice. The agency will start accepting comments on the extensions July 1. Comments are due July 30, it said. Each exclusion will be evaluated independently, focusing on whether, despite the first imposition of these additional duties, the particular product remains available only from China. The companies are required to post a public rationale.

CBP added June 18 the ability in ACE for importers to file entries with recently excluded goods in the fourth tranche of Section 301 tariffs, it said in a CSMS message. The official Office of the U.S. Trade Representative notice for the exclusions was published June 12 (see 2006090003). The exclusions are in subheading 9903.88.49. The exclusions are available for any product that meets the description in the Annex to USTR’s notice, regardless of whether the importer filed an exclusion request. The product exclusions apply retroactively to Sept. 1, 2019, the date the tariffs on the fourth list took effect, and remain in effect until Sept. 1, 2020. The CSMS message also includes a summary of Section 301 duties that shows information on each tranche of tariffs and granted product exclusions.

The Office of the U.S. Trade Representative is requesting comments on whether tariff exclusions on Chinese imports on Section 301 List 2 that are set to expire Oct. 2 (see 1909300041) should extend by up to another year, it said in a notice. The agency will start accepting comments on the extensions July 1. The comments are due by July 30, it said. Each exclusion will be evaluated independently. The focus of the evaluation will be whether, despite the first imposition of these additional duties, the particular product remains available only from China. The companies are required to post a public rationale.

CBP is seeking comments by July 22 on an existing information collection request for commercial invoices, it said in a notice. CBP proposes to extend the expiration date of this information collection with no change to the burden hours or to the information collected.