International Trade Today is providing readers with some of the top stories for March 11-15 in case they were missed.
A Rhodium Group report prepared for the U.S. Chamber of Commerce found that the American information and communication technology sector is bearing an especially heavy burden from the “bilateral tariff escalation” between the U.S. and China, senior Rhodium analyst Lauren Gloudeman told reporters on a conference call March 15. The report found the costs of the escalation are “unambiguously severe” on the ICT industry, she said.
Section 301 tariffs on Chinese imports would reduce U.S. GDP by up to $1 trillion within a decade if left in place, concluded a Rhodium Group study for the U.S. Chamber of Commerce. The tariffs are “eroding” U.S. “competitiveness” in information and communication technology and “undermining globalized supply chains,” the study says. The report is to be released March 15.
With the second round of announcements on Section 301 exclusions (see 1903010029), trade professionals are trying to find patterns of what is granted -- so far, 985 requests -- and what has been denied -- a little over 4,500. About 3,300 requests on hundreds of tariff lines have been tentatively approved by USTR, if CBP says the exclusions are administrable. Nicole Bivens Collinson, who leads the international trade and government relations practice at Sandler Travis, said that if all of those were to go through, about 45 percent of all requests would have been approved.
Importers can use the temporary import provisions with goods subject to Section 301 tariffs in order to pay the tariffs at current levels and avoid potential increases, CBP said in a Feb. 21 ruling, HQ H302203. Alex Romero of A.F. Romero & Co. Customs Brokers requested CBP's ruling on behalf Panacea Products Corp. Several of Panacea's products are subject to the third list of Section 301 tariffs, which were originally slated to increase from 10 percent to 25 percent on Jan. 1. That increase has since been delayed "until further notice" while the U.S. and China negotiate (see 1903010036).
Rep. Jackie Walorski, R-Ind., said that with an approval rate of just under 6 percent for steel exclusion requests when domestic firms objected, "it really looks like somebody's finger is on the scale." In a sit-down with International Trade Today, Walorski explained how what started with complaints from 10 businesses in her district -- which is heavy with steel-consuming RV manufacturers -- has made her office the place for companies around the country to share their problems with exclusions. "We knew this is probably what was going to happen," she said of the exclusion process that favors domestic producers.
International Trade Today is providing readers with some of the top stories for March 4-8 in case they were missed.
When U.S. Trade Representative Robert Lighthizer was asked during his Senate Finance Committee testimony March 12 if the China trade deal might come together by the end of March, he said it remains to be determined. "Well, we’ll see ... I don’t know when something’s going to happen. Something is either going to have a good result or we’re going to have a bad result before too long," he said. "But I’m not setting a specific time frame and it’s not up to me. I’m working as hard as I can, and the president will tell me when the time is up or the Chinese will." He told Sen. Rob Portman, R-Ohio, a former USTR himself, that the Chinese are offering concessions with the goal of getting Section 301 tariffs lifted, and he said that "is under debate."
Supply chain location changes are difficult and take time, so companies are turning to other ways to avoid or reduce Sections 301 and 232 tariffs, experts said at a March 7 Georgetown Law International Trade Update (see 1903070033) panel on the Trump administration and the supply chain. For steel and aluminum imports, there's been "a big uptake in foreign-trade zones," said Lynlee Brown, a senior manager at Ernst & Young. With Section 301, companies are using drawback, and after a recent CMS message, they may be taking advantage more often of substitution drawback. But the best bang for the buck, Brown said, is in customs valuation. Companies are making changes there not only because of Section 301, but also because of the administration's tax reform.
Two hand tool sets that undergo some work in China are not subject to the Section 301 tariffs because the sets are classifiable based on the ratchets, which are of Taiwan origin, CBP said in a Feb. 14 ruling N301954. Apex Tool, through Sandler Travis lawyer Marilyn-Joy Cerny, sought CBP's advice on classification, marking and the country of origin. Unlike another recent ruling involving Cerny and Apex Tool that found the Section 301 tariffs do apply (see 1810100040), CBP said the set can be classified through General Rule of Interpretation (GRI) 3.