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Demonstrating again its willingness to use trade threats to address a wide range of issues, the Trump administration announced July 10 a new Section 301 investigation into a French digital services tax. This investigation, which could take up to 12 months, could result in tariffs or other restrictions on imports from France if the two sides are not able to reach a settlement. Other European Union member countries are also reportedly considering DSTs after efforts to impose one across the entire EU failed earlier this year.
Congressional action on legislation to implement the U.S.-Mexico-Canada Agreement appears increasingly likely to be delayed until this fall as the Trump administration continues efforts to resolve objections raised by lawmakers.
The Department of Commerce is accepting through July 29 comments that will be used to develop a report on dealing with imports of counterfeit and pirated goods.
More than 100 additional goods have been excluded from the additional 25 percent duty imposed on some $34 billion worth of imports from China (List 1 goods). These exclusions cover 110 specially prepared product descriptions that reflect 362 separate exclusion requests. The exclusions will be retroactive to July 6, 2018, and remain in place until July 9, 2020. They must be claimed using new HTSUS subheading 9903.88.11.
A new rule on defense exports as well as proposed and final rules on topics such as the International Trade Data System, import and export procedures, and food facility registrations are among the regulations set forth in the semiannual regulatory agendas recently issued by a number of federal agencies.
A recent U.S. Customs and Border Protection classification decision could embolden domestic companies to seek similar reviews in an effort to impose higher tariffs on goods from foreign competitors.
Nearly a hundred additional products with a trade value of about $4 billion have been added to a list of goods imported from the European Union that could be subject to additional tariffs in a long-running dispute over aircraft subsidies. Importers of these goods should consider taking proactive measures to mitigate the impact of any potential tariff increase, such as working to have their products omitted from the final list or considering alternative sourcing locations.
Shifting manufacturing operations to change a product’s country of origin is a longstanding and legitimate way to mitigate tariffs on goods imported into the U.S. While many U.S. companies are properly using this method to reduce their exposure to the 25 percent additional tariff the U.S. has imposed on hundreds of billions of dollars’ worth of goods from China, others are taking shortcuts by simply transshipping goods from China and labeling them as products of a third country. Importers should pay closer attention to their supply chains to avoid such illegal activity.
Importers and others have an opportunity to seek changes in the eligibility of sub-Saharan African countries to receive benefits under the African Growth and Opportunity Act as part of the Office of the U.S. Trade Representative’s annual review. Public comments, which are due no later than Sept. 3, and information presented at an Aug. 27 public hearing will be considered in developing recommendations on AGOA country eligibility for 2020. In addition, comments related to the AGOA child labor criteria may be considered by the Department of Labor as it prepares its required report on that issue.
The amount of trade covered by new import-restrictive measures imposed by major economies during the period October 2018 to May 2019 totaled $335.9 billion, a recent World Trade Organization report finds, the second-highest figure on record behind the $480.9 billion reported for the previous period. The report also shows that the trade coverage of new import-facilitating measures nearly doubled from $216 billion to $397.2 billion.
Tighter controls on exports of specific products and to particular countries, as well as updated export enforcement provisions, are among the new items on the Department of Commerce’s most recent semiannual regulatory agenda. This document lists the following regulations affecting international trade that could be issued within the next year as well as rulemaking proceedings that have been in process for some time and are not as likely to see further progress in the near term.
Updating customs broker requirements, encouraging the use of prior disclosures, and expanding the range of goods eligible for duty-free treatment are among the U.S. Customs and Border Protection regulations newly listed in the semiannual regulatory agendas of the departments of Homeland Security and the Treasury, which list the following regulations affecting international trade that could be issued within the next year. The expected timeframes for issuance of these rules are indicated in parentheses.
BIS has issued a final rule that, effective June 24, adds five entities under the destination of China to the Entity List, which lists entities restricted from receiving U.S. exports of goods controlled under the Export Administration Regulations.
Requests for exclusions from the additional tariff imposed as of Sept. 24, 2018, on some $200 billion worth of imports from China may be submitted between June 30 and Sept. 30. Any exclusions granted will be retroactive to Sept. 24, 2018, and will remain in effect for one year from the date of publication of the exclusion determination in the Federal Register.
An executive order issued by President Trump June 14 instructs federal agency heads to evaluate the need for each of their current advisory committees established under the Federal Advisory Committee Act and to terminate at least one-third of non-statutorily required advisory committees by Sept. 30.
USTR has released its schedule of public hearings in connection with a proposal to impose additional tariffs of up to 25 percent on some $300 billion worth of imports from China not already subject to higher tariffs under the Section 301 process.
USTR anticipates that any modifications to the list of GSP-eligible articles resulting from this review will be effective as of Nov. 1.
Several members of Congress are pushing the Trump administration to automatically renew exclusions from the 25 percent additional tariff imposed on $50 billion worth of imports from China. Those exclusions, which are being announced in stages, are currently effective for one year after they are published.
Some products could be removed from duty-free treatment under the Generalized System of Preferences while others could retain or be reinstated to GSP eligibility under possible changes under consideration by the International Trade Commission. Comments on these changes are due to the ITC by July 8.