CBP's Office of Trade will be examining the effects of the recent partial federal government shutdown and what needs to be prioritized now that government operations are being funded again, an agency spokesman said. "Approximately 95% of the Office of Trade’s staff were furloughed and not working during the shutdown," he said. The agency "will be spending much of the next few weeks assessing program-by-program impact, and determining what, if any, delays in policy implementation there will be (including to new [Form] 5106 deployment)," the spokesman said. "As we undertake these assessments, we will be communicating with trade stakeholders to apprise them of impact, anticipated adjustments to schedule, etc."
Apparel importers may still want to classify their hangers separately from apparel, but should take extra care in light of the potential application of Section 301 tariffs on the hangers, Sandler Travis said in a client alert. CBP has long held that some more substantial, reusable hangers are classifiable in subheading 3923.90.0080 as plastic articles for the conveyance or packing of goods, even when imported together with apparel. That subheading carries a 3% duty rate, though 10% Section 301 tariffs raise that to 13% if imported from China, and that could rise to 28% of no deal is reached on the tariffs by March 2 (see 1812140034). Nonetheless, importers should still perform an analysis on whether that rate would still be lower than the rate applicable to the garment itself if the hangers are less substantial and considered “packing material” not classified separately from the apparel, the alert said.
The Convention on International Trade in Endangered Species will consider changes to restrictions on trade in rosewood, ipe and padouk at its next Conference of the Parties at the end of May, according to a list of proposals set for consideration at the meeting. One amendment proposed by Canada and the European Union would replace the current exemption for non-commercial shipments of rosewood with a specific exemption for musical instruments and a de minimis level for rosewood in finished goods, whether or not commercial in nature.
CBP will refuse entry until further notice of all shipments of frozen Patagonian toothfish (Chilean sea bass) arriving at a port without the required National Oceanic and Atmospheric Administration pre-approval authorization and associated catch document certification pre-filed in ACE, CBP said in a Jan. 24 CSMS message. Shipments of fresh or chilled Patagonian toothfish, on the other hand, will be allowed entry with only a catch document certification, CBP said.
CBP is now accepting claims for drawback on Section 301 duties on products from China, said John Leonard, executive director-trade policy and programs, on a conference call held Jan. 23 to discuss issues related to the ongoing federal government shutdown. The agency has fixed a bug in ACE that was preventing Section 301 drawback claims and is now able to begin processing, though the agency’s ability to resolve particular issues will be limited due to staffing issues caused by the ongoing shutdown, he said.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 14-20:
Measures of compliance among steel products importers are down since the imposition of sections 301 and 232 tariffs, said the American Institute for International Steel’s Customs Committee in its 2018 year-end report. CBP told the trade association that compliance measured by the letter of the law for imports in Harmonized Tariff Schedule chapters 72 and 73 was down to 96.46 percent in fiscal year 2018, and down to 97.8 percent when measured by major trade discrepancies, CBP told AIIS, the report said. “Issues with Section 232 and Section 301 entries presumably contributed to the reductions,” the report said.
Correction: Among other changes to the tariff schedule that took effect Jan. 1, subheading 7607.11.60 for unbacked aluminum foil, rolled but not further worked, of a thickness above 0.01 mm and not exceeding 0.15 mm, was subdivided. New statistical breakout 7607.11.6010 was added for boxed aluminum foil not weighing more than 11.3 kg. Subheading 7607.11.6090 now covers other such aluminum foil (see 1901110016).
International Trade Today is providing readers with some of the top stories for Jan. 7-11 in case they were missed.
The Court of International Trade could be a venue for at least two more big cases involving constitutional implications this year, Crowell & Moring lawyer Daniel Cannistra said in the firm's litigation forecast for 2019. The next challenge may involve the Section 301 tariffs and whether a president "can unilaterally rewrite the tariff schedule for the purpose of negotiating trade agreements," Cannistra said. "The other constitutional issues that appear to be on the CIT’s horizon include the new United States-Mexico-Canada Agreement, which is sure to contain questions concerning executive authority over trade." The CIT is currently considering the constitutionality of the Section 232 tariffs on steel and aluminum (see 1812190044), and that case is "likely to be resolved in 2019," Cannistra said. According to Cannistra, "the consequences of these decisions will be profound. For example, if the CIT upholds one of these administration trade policies, what will it mean to a company’s global supply chain? Will production need to be relocated from one country to another? These shifts are not made overnight; the court’s decisions will affect companies for years."