The House Ways and Means Committee grappled with the fact that tariffs might be painful enough for China to change course on its unfair trade practices but that protecting mills and smelters will hurt factories. China's retaliatory tariffs, in turn, will hurt agriculture and chemical exporters. Committee Chairman Kevin Brady, R-Texas, said during a hearing on the effects of new tariffs that he wants enforceable trade policies to target bad actors, but said, "at the same time, we must avoid unintended consequences that hurt Americans."
Misclassification and valuation are among areas of enforcement focus for CBP's administration of the Section 232 tariffs on steel and aluminum, CBP officials said during an April 10 interview. "Classification is a way to play with it, valuation as well, but these are things we will have to look at," said John Leonard, executive director of trade policy and programs at CBP. There are some different considerations involved for looking at possible transshipments because most antidumping or countervailing duty evasions involve countries around China, such as Malaysia or Thailand, but those countries are affected by the 232 tariffs too, he said. "It's hard to put it in that same context," he said.
Importers should keep an eye out for the effects new duties on steel and aluminum have on importer bond limits, said Liz Gant, a corporate regulatory compliance analyst at Samuel Shapiro & Company, in the company's monthly newsletter. CBP "uses duties, taxes and fees based on the previous 12 months to evaluate the sufficiency of your bond," she said. That means that if the Section 232 tariff duties remain in effect for an extended period, it could impact bond sufficiency. "While the additional tariffs are in place, bond sufficiency should be monitored by the importer closely," she said. "An importer does not want to be surprised if Customs deems their bond insufficient and a shipment is delayed while the importer gathers the information required for the surety."
China says that the U.S. decision to levy 25 percent tariffs on imported steel from some parts of the world, and 10 percent tariffs on aluminum, was not fair and impartial, and also violated World Trade Organization agreements by not treating all nations in the WTO equally with regard to the tariffs. Under WTO rules, countries are not allowed to raise tariffs above bound rates on some countries but not others in most circumstances. The U.S. used the Section 232 national security exemption from that rule, but China dismisses that assertion, and says that these tariffs are safeguards in disguise. Earlier, China asked for consultations on compensation for the safeguard tariffs (see 1803260025), and this latest request for consultations, posted April 10, tackles the legality of the action. China says the U.S. ignored the rules on how to implement safeguard tariffs. Those rules say that a country has to prove a surge in imports is harming or will harm domestic producers. The U.S. has already responded to China's earlier request for consultations by saying that these are not safeguard tariffs.
International Trade Today is providing readers with some of the top stories for April 2-6 in case they were missed.
The House Ways and Means Committee will hold a hearing April 12 on how the Section 232 tariffs are affecting the economy and jobs and how proposed Section 301 tariffs might do the same, it said in a notice. "In enforcing our trade laws, we should always take a targeted approach to address unfair practices while avoiding harm to U.S. workers and job creators," Chairman Kevin Brady, R-Texas, said.
The Court of International Trade on April 5 rejected a bid to stop Section 232 tariffs on steel products, finding the recently announced 25 percent tariff may be imposed for economic reasons in addition to national security. The court denied Severstal’s motion for a preliminary injunction barring imposition of the tariffs on the importer, and will now proceed to hear arguments over whether it should dismiss the case entirely.
China disputed the legality of the Section 232 tariffs on steel and aluminum at the World Trade Organization (see 1803260025), and now the U.S. is disputing both the characterization of those tariffs and how China has responded to them. The tariffs were for national security, and not to protect domestic industry from rising imports, asserted Deputy U.S. Trade Representative Dennis Shea, ambassador to the WTO. China's decision on April 2 to implement tariffs on pork, aluminum scrap and other U.S. exports were not justified, Shea wrote in a letter to China's WTO ambassador, since China can only use the safeguards to respond to safeguards, and the U.S. measures were not safeguards. "China has asserted no other justification for the measures, and the United States is aware of none," he wrote. "Therefore, it appears that China's actions have no basis under WTO rules."
The Section 232 tariffs on steel and aluminum were only due on immediate transportation entries that were accepted by the port after the duty rates took effect on March 23, CBP said in an April 5 CSMS message. "Accordingly, entries of steel and aluminum articles covered by an entry for immediate transportation accepted at the port of original importation before March 23, may have been incorrectly rejected by CBP and/or incorrectly filed with a Chapter 99 steel or aluminum HTS classification," the agency said. The National Customs Brokers & Forwarders Association of America gave similar advice in a note to members on April 4 (see 1804040018).
The recently implemented Section 232 tariffs on steel and aluminum didn't apply to goods under an Immediate Transportation entry if those goods arrived within U.S. port limits as of the March 23 effective date (see 1803230014), the National Customs Brokers & Forwarders Association of America said in an April 3 email. The NCBFAA said it confirmed that with CBP. "Thus, where an IT was filed for goods which arrived prior to March 23, 2018, 232 duties should not be assessed even though the entry summary was filed after March 23, 2018," it said. Filers that "have deposited 232 duties on IT shipments which arrived prior to March 23, 2018 should contact their [Automated Broker Interface] Client Representative to discuss the procedure for obtaining a refund of the 232 duties." CBP didn't comment.