2019 is shaping up to be another active year in terms of changes to the Harmonized Tariff Schedule. Like last year, a series of revisions were necessary in the first half of the year to implement Section 301 exemptions and an increase for $200 billion worth of the China tariffs from 10 percent to 25 percent. Other major changes are related to the Generalized System of Preferences, and in particular the removal of India and Turkey from the program. In all, seven revisions were issued prior to the mid-year Revision 8, as follows:
Section 201 Safeguards
Section 201 or “safeguard” actions are steps the President can take to provide temporary relief for an industry through the imposition of tariffs or quotas to create a more competitive environment for said industry. Section 201 actions are considered consistent with U.S. international obligations if they conform to the World Trade Organization’s Agreement on Safeguards. To enact Section 201 Safeguards, a U.S. company must first file a complaint with the International Trade Commission, which then makes a determination if the industry is injured by the importation of the goods in question. If the investigation is affirmative, the President may enact the safeguards.
International Trade Today is providing readers with some of the top stories for June 10-14 in case they were missed.
The Office of the U.S. Trade Representative approved some new categories of crystalline silicon photovoltaic cells, or solar cells, for exclusion from the Section 201 safeguards, it said in a notice. The USTR announced some exclusions in September last year (see 1809180031), as well as within the original safeguard announcement (see 1801230052). The agency "will not further consider exclusion requests that were not granted in this or the September 19 notices," it said. The exclusions take effect on June 13.
The International Trade Commission issued Revision 7 to the Harmonized Tariff Schedule. The revised tariff schedule now reflects the removal of India from the Generalized System of Preferences program (see 1905310072), with the country removed from lists of GSP beneficiaries in General Note 4, and a bevy of subheadings for India removed from the list of country-product pairs ineligible for GSP because they exceeded Competitive Need Limitations. The new version also ends an exemption for India from Section 201 safeguards on solar cells and washing machines, because India is no longer considered a developing country that qualifies for the exemption. These changes took effect June 5.
India was removed as a Generalized System of Preferences beneficiary country on June 5. As a result, India is no longer exempt from the Section 201 safeguards on solar cells and residential washers and parts, CBP said in a recent CSMS message. CBP said it updated ACE with the changes on June 3 (see 1906040007).
CBP created Harmonized System Update (HSU) 1909 on May 22, containing 467 Automated Broker Interface records and 103 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes adjustments related to the Section 201 safeguard tariffs on solar cells and residential washers that apply to Turkey now that it has been removed from the Generalized System of Preference benefits program (see 1905240049). Modifications required by the verification of the 2019 HTS are included as well.
Turkey is now subject to the Section 201 safeguard tariffs on solar cells and residential washers, CBP said in a CSMS message. Turkey is no longer a beneficiary developing country under the Generalized System of Preferences and is therefore subject to the tariffs (see 1905170004), effective May 17, CBP said.
The Coalition for GSP criticized Turkey’s removal from the Generalized System of Preferences program in a statement following the White House's May 16 announcement, saying the move will impose “tens of million of dollars in taxes annually.” President Donald Trump said Turkey no longer qualifies as a developing country, which means Turkey will also be subject to Section 201 safeguards on solar cells and washing machines. The removal of Turkey from GSP takes effect May 17. In a separate proclamation, the White House announced that the 50 percent Section 232 tariff on Turkish steel in place since August will return to 25 percent on May 21
The U.S. says the World Trade Organization is hobbled and Roberto Azevedo, the director general of the WTO, said the conversations around reform are gaining momentum. "I think we have a once-in-a-generation opportunity to renew the trading system," he said at a speech April 11 at the Peterson Institute for International Economics. "Inaction would compromise the relevance or even the existence of the system as we know it." Among the U.S. complaints about the international body are that the WTO's rules are inadequate for dealing with China's myriad subsidies and that countries can self-designate as developing countries, thereby avoiding concessions in negotiations.
Cable modems that are made up of Chinese parts but assembled in Mexico are subject to the 10 percent Section 301 tariffs on goods from China, CBP said in a Nov. 27 ruling. The ruling request was submitted by Barnes Richardson lawyer Lawrence Friedman on behalf of Zoom Telephonics. CBP's analysis is on two types of modems, one type that includes a Wi-Fi gateway and one that does not. The modems are Data Over Cable Service Interface Specification (DOCSIS) 3.1 and compatible with several major cable systems, including Comcast and Cox, it said.