CBP is unable to provide support to the Office of the U.S. Trade Representative in reviewing Section 301 product exclusion requests during the partial federal government shutdown, and no more exclusions are expected while the funding impasse continues, said John Leonard, CBP executive director-trade policy and programs, during a Jan. 9 conference call with industry. CBP provides USTR with input and analysis on the feasibility of excluding individual products from the Section 301 tariffs. "That process is not happening" during the shutdown, he said. The USTR issued the first set of Section 301 product exclusions in December (see 1812240010), though CBP remains unable to implement the exclusions during the shutdown (see 1812310007).
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The packaging and dilution of perfume and cologne in China don't result in a change to the country of origin, CBP said in a Nov. 28 ruling (NY N301656). The colognes and perfumes therefore are not subject to the Section 301 tariffs on goods from China, the agency ruled. The ruling request came from Fantasia Accessories through Grunfeld Desiderio lawyer Kevin Leonard.
The ongoing partial federal government shutdown is causing some confusion for the trade community on tariff classification. CBP’s last tariff update in the Automated Broker Interface came on Dec. 19 (see 1812190004), but the International Trade Commission has not yet issued its annual update to the online Harmonized Tariff Schedule (see 1901020021). Further complicating matters, a presidential proclamation making more changes to the HTS is now set for publication on Jan. 7 (see 1812270038).
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Even though only 21 percent of the nearly 10,800 Section 301 exclusion requests have been adjudicated, Miller & Chevalier is drawing some qualified conclusions about what worked. The Office of the U.S. Trade Representative approved exclusions to the 25 percent tariff on 984 products from the initial $34 billion in Chinese imports targeted (see 1812240010). The two most important factors, the law firm said in an analysis published Jan. 2, are specificity around why the import could not be sourced outside China and concrete explanations on how the additional duties would hurt the requester.
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CBP won't be able to implement the first group of Section 301 tariff exclusions until the impasse over government funding is resolved, the agency said in CSMS message. While the Office of the U.S. Trade Representative issued a notice on the exclusions (see 1812240010), CBP is unable to update ACE to reflect the exclusions, CBP said. "At the conclusion of the government funding hiatus, CBP will issue instructions on entry guidance and implementation," the agency said.
President Donald Trump issued a presidential proclamation Dec. 21 making changes to the tariff schedule that are set to be implemented Jan. 1. Among other changes, the proclamation formally ends African Growth and Opportunity Act benefits for Mauritania (see 1811050019), and amends the tariff schedule to clarify duty-free treatment for certain goods of Nepal under the Trade Facilitation and Trade Enforcement Act of 2015. Other technical and conforming changes are also being made related to the tariff treatment of guayaberas from Panama, the tariff-rate quota on tobacco products, implementation of Section 301 tariffs on China and the Miscellaneous Tariff Bill. The International Trade Commission will now amend the tariff schedule to implement the changes, though the agency is operating in a limited capacity due to the ongoing federal government shutdown.
The first set of products excluded from the initial tranche of Section 301 tariffs (see 1812240010) is hoped to be the beginning of good news from the Office of the U.S. Trade Representative, said David Cohen, a customs lawyer with Sandler Travis. "We hope that this is the first notification of many exclusions to be granted," Cohen said in an email. "Many of the articles subject to the tariff are those which are not related to the stated intent of the Section 301 action which is safeguarding technology and apply, in some cases, to products that utilize decades old commonly available technology. Moreover, the breadth of the coverage unfortunately sweeps in many products that in no way help China achieve her 2025 goals; for example a hand wrench is included. We hope the Administration continues to review the pending petitions and permit many other products to enter the US commerce free from the Section 301 duties."