The Office of the U.S. Trade Representative concluded in its Trade Act Section 301 investigative report released the evening of Dec. 2 (see 1912020066) that France’s digital services tax (DST), enacted into law in July, discriminates against U.S. companies, tech and business trade associations said. USTR seeks comment by Jan. 6, 2020, in docket USTR-2019-0009 at regulations.gov on its proposal to slap up to 100 percent retaliatory tariffs on 63 subheadings of French imports worth about $2.4 billion in 2018 customs value, mainly cheese, beauty products, handbags and kitchenware. The French government didn’t comment.
September imports of smartphones and computer monitors from China spiked significantly from August, according to Census Bureau statistics accessed through the International Trade Commission’s DataWeb tool. The surge was likely evidence of importers’ rush to beat the 15 percent List 4B Section 301 tariffs scheduled to take effect Dec. 15 on those products.
Jasco Products didn’t conceal its anger in seeking exclusions from the 15 percent List 4A Section 301 tariffs it pays on the plastic AC outlet safety covers and seven other classifications of tech accessories it imports from China. Jasco is “being forced by its own federal government to undergo a worldwide scouting expedition” for alternative sourcing, “and is actively evaluating several dozen suppliers outside of China,” the supplier said in each of its eight exclusion requests posted Dec. 2 in the Office of the U.S. Trade Representative’s public docket. Finding alternative sourcing “will take years and tens of millions of dollars along with extensive business disruption due to the time and resource commitment involved,” Jasco said. “It takes time to identify potential suppliers and perform audits to ensure that the factories meet Jasco’s rigorous standards for quality, safety, labor conditions, and environmental protections.”
The U.S. Trade Representative on Dec. 2 issued a list of 63 subheadings that may face tariffs of up to 100 percent when imported from France in retaliation for that country’s digital services tax. The proposed list, which includes goods of chapters 4, 33, 34, 42, 69 and 73 of the tariff schedule, comes as a result of the agency’s finding that the French tax restricts U.S. comments and violates Section 301. Comments on the proposed tariffs are due to USTR by Jan. 6, and a hearing is scheduled for Jan. 7.
Dairy license holders’ DAIRIES accounts are not automatically being decremented for entries subject to Section 301 tariffs on goods from the European Union, the Cheese Importers Association of America said, citing the Foreign Agricultural Service. “In order to resolve this issue, license holders should direct their brokers to contact CBP at HQQUOTA@cbp.dhs.gov to have CBP manually post the affected entries in the quota system and have the entries reflected in the DAIRIES system,” CIAA said. “Brokers should be prepared to share the following information with CBP about affected entries: Entry Number, Line Number, License Number, CO Origin, Quantity, and HTS Number.” CBP sent out a CSMS message on the issue Nov. 6 (see 1911060009).
U.S. importers sourcing smart speakers, Bluetooth devices, smartwatches and fitness trackers from China filed the most List 4A Section 301 tariff exclusion requests of any consumer tech category through Nov. 27 since the Office of U.S. Trade Representative began accepting the requests Oct. 31, the public docket shows. The broad assortment of goods imported under the 8517.62.0090 of the Harmonized Tariff Schedule of the U.S. had the widest tariff exposure of any consumer tech product on List 4A, according to an International Trade Today analysis of Census Bureau statistics accessed through the International Trade Commission’s DataWeb tool.
The Office of the U.S. Trade Representative announced that it will release a report from its Section 301 investigation on France's Digital Services Tax on Dec. 2. The Nov. 27 press release said that its recommendation of how to respond to the DST will be made at that time. Trade groups, companies and think tanks submitted comments and testified last summer about their problems with the DST (see 1908140023), but several said that tariffs on French imports under Section 301 are not the way to fix the problem. Many of France's most identifiable exports to the U.S. are already targets of tariffs because of the Airbus dispute.
Best Buy is taking multiple steps to counter effects of tariffs, Chief Financial Officer Matt Bilunas said on a Nov. 26 earnings call. He said the retailer is bringing in products ahead of tariff implementation; making strategic decisions on vendor and SKU assortment; instituting promotional and pricing strategies and sourcing changes; and developing strategies with vendor partners. The most relevant tariffed categories for Best Buy for Section 301 List 4A products are TVs, headphones and smartwatches; and for List 4B products are computers, mobile phones and game consoles, Bilunas said.
CBP created Harmonized System Update (HSU) 1916 on Nov. 20, containing 27,011 Automated Broker Interface records and 5,072 Harmonized Tariff Schedule records, it said in a CSMS message. The update includes recently announced exclusions and other changes related to the Section 301 tariffs (see 1911120017 and 1911200043). Other changes involve Uruguay beef export certifications (see 1911220036), cotton import fees (see 1910160034) and coffee imported to Puerto Rico (see 1804130023).
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