Canada, which had exported more than $133 million worth of solar panels in 2017 before its exports were hit with the global safeguard, will no longer be subject to the 14.75% tariff on panels. The change was announced July 7, while U.S. Trade Representative Katherine Tai was visiting Canada for the USMCA Free Trade Commission; the memorandum of understanding marking the change will be signed July 8. Tai said the agreement "contains a mechanism to ensure that solar product imports from Canada do not undermine the existing U.S. safeguard measure on imports of solar products," and also commits Canada to prohibiting the import of solar module components made in whole or in part with forced or compulsory labor.
The North American auto industry is waiting with baited breath for the panel decision on the interpretation of the auto rules of origin, and for the additional guidance from CBP to the auto industry, according to Dan Ujczo, a USMCA maven with clients in the auto industry. Ujczo, a senior counsel at Thompson Hine, said in a July 6 phone interview that one of the areas where importers need clarity is in how steel in vehicles can be certified as North American before the melted and poured standard arrives in 2027.
A report to Congress designed to reveal whether a stricter auto rules of origin in USMCA is effective says no conclusions can be drawn because of the effects of the pandemic and ensuing semiconductor shortage that has reduced production of automobiles worldwide. The auto industry told the Office of the U.S. Trade Representative that the semiconductor shortage meant 1,520,000 fewer vehicles were built in 2021, and that this year, they expected one million fewer vehicles to be built, because the shortages have not yet been resolved.
The Treasury Department published its fall 2022 regulatory agenda for CBP. The only new mention of any regulations is a return to the agenda for a final rule that would "create a procedure for the disclosure of information otherwise protected by the Trade Secrets Act to a trademark owner when merchandise bearing suspected counterfeit trademarks has been voluntarily abandoned." CBP issued the underlying proposal in 2019 (see 1908260040), and the final rule had been on Treasury's regulatory agenda for 2020 and spring of 2021 before moving to the long-term actions category in the most recent agenda.
DHS published its fall 2022 regulatory agenda for CBP. There were no new trade-related rulemakings included, though upcoming regulations on continuing education requirements for customs brokers is now listed at the final rule stage.
The Commerce Department published notices in the Federal Register June 24 on the following AD/CV duty proceedings (any notices that announce changes to AD/CV duty rates, scope, affected firms or effective dates will be detailed in another ITT article):
Mexico announced that it will examine whether the Panasonic Automotive Systems plant in Reynosa violated the rights of its workers (see 2205180061) under the provisions of the USMCA.
U.S. Trade Representative Katherine Tai hailed a new contract between General Motors and the union workers chose in Silao, Mexico, saying it will raise wages. "Because of the ground-breaking labor protections in the USMCA, we’ve seen that workers no longer have to tolerate contracts negotiated behind their backs and have the right to vote on an agreement after it's negotiated," she said in a statement. "The USMCA’s Rapid Response Labor Mechanism helped workers get to this vote, and the United States will continue to work with Mexico to protect worker rights.”
Requests for action from the Office of the U.S. Trade Representative should go beyond asking USTR to go and fix a problem via the World Trade Organization, USMCA or other dispute settlement system, said Daniel Stirk, senior associate general counsel at the agency. Speaking on a panel at the Georgetown International Trade Update, Stirk said that instead, trust that the office is already aware of the issue and is taking steps to solve it, and if you still decide to approach USTR, come with thoughtful solutions.
As companies work to move assembly out of China so that the goods they export to the U.S. won't be hit with Section 301 tariffs, they have to grapple with the fact that CBP may still consider a good made in Mexico, Malaysia, Vietnam or elsewhere to be a product of China if enough of its innards were made in China.