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The increased tariffs the U.S. and China are imposing on each other’s products are not likely to be very effective in protecting domestic companies and instead will mostly divert trade to other countries, according to a new study from the United Nations Conference on Trade and Development.
A growing list of trade irritants has stalled U.S.-India trade talks and could prompt the White House to narrow or suspend India’s eligibility for duty-free exports to the U.S., according to press reports.
Congress has directed the creation of a long-awaited process for requesting product-specific exclusions from the Section 301 additional tariffs on $200 billion worth of imported goods from China. These tariffs are currently 10 percent but are scheduled to be increased to 25 percent as of March 2.
The results of the Department of Commerce’s section 232 investigation into the effect of automobile and auto parts imports on U.S. national security were submitted to President Trump Feb. 17. However, neither those result nor the DOC’s recommendations have yet been made public. The president now has up to 90 days to decide whether to take action in this case.
The U.S. and China saw “progress” in recent trade talks in Beijing but “much work remains,” according to a Feb. 15 White House statement. Talks will continue in Washington during the week of Feb. 18 as the two sides seek to avoid a scheduled March 2 increase in U.S. tariffs on $200 billion worth of imports from China from 10 percent to 25 percent.
President Trump said Feb. 12 that he might postpone a planned tariff increase on $200 billion worth of imports from China if the two sides are “close to a deal.”
As of Feb. 10 U.S. Customs and Border Protection is accepting in the Automated Commercial Environment entries of products that have been excluded from the Section 301 additional tariffs on imports from China. The exclusions granted thus far, which apply only to so-called List 1 goods subject to a 25 percent additional tariff, are retroactive to July 6, 2018, and will be effective until Dec. 28, 2019.
A recent sanctions penalty case highlights the importance of performing heightened due diligence, particularly with regard to affiliates, subsidiaries, or counter-parties known to do business with countries or persons subject to U.S. sanctions or that otherwise pose high risks due to their geographic location, customers, suppliers, products, or services. The Office of Foreign Assets Control states that this case also represents a “marked change” to the way it will respond to sanctions violations.
The Trump administration is coming under increasing pressure to eliminate its Section 232 tariffs on imports of steel and aluminum products from Canada and Mexico in order to secure approval of the U.S.-Mexico-Canada Trade Agreement.
Despite a few positive steps, Russia is continuing to promulgate protectionist economic policies and disregard the general principles of the World Trade Organization, according to the Office of the U.S. Trade Representative’s annual report on Russia’s compliance with its WTO accession commitments. The report pledges that the U.S. will investigate and use all appropriate means to resolve any actions inconsistent with Russia’s WTO commitments to keep that market open to U.S. exports.
The U.S. is taking a more aggressive approach to ensure that China, not the U.S., bears the costs of its non-market economic system, according to a report from the Office of the U.S. Trade Representative. At the same time, the U.S. will encourage China to make fundamental structural changes to its approach to the economy and trade.
After recent talks between U.S. and Chinese officials, President Trump said he currently has no plans to push back an increase in tariffs on imports from China. Unless the two sides reach an agreement on issues such as forced technology transfer, intellectual property protection, non-tariff barriers, and cyber theft, the U.S. is expected to increase from 10 percent to 25 percent its additional tariff on $200 billion worth of goods from China.
A recent enforcement action by the Office of Foreign Assets Control highlights the risks for companies that do not conduct full-spectrum supply chain due diligence when sourcing products from overseas, particularly regions in which comprehensively sanctioned countries or regions are known to export goods. OFAC is therefore encouraging companies to develop, implement, and maintain a risk-based approach to sanctions compliance and to implement processes and procedures to identify and mitigate areas of risks.
The European Union reports that it has made progress on a number of trade-related issues in talks with the U.S. since last summer but warns that additional movement would be jeopardized if the U.S. increases tariffs on imports of automobiles and auto parts from the EU. A decision on that issue could come as early as mid-February.
Changes to existing law are necessary to bring the U.S. into compliance with a number of obligations under the U.S.-Mexico-Canada Trade Agreement, according to a recent document from the Office of the U.S. Trade Representative. Legislation to implement the USMCA could be introduced and considered by Congress within the next few months, although the recent federal government shutdown and the prospect of another shutdown beginning in February could further delay such action.
The Trump administration has received nearly 13,000 requests for exclusions from the additional tariffs it has imposed on imports from China, according to information made available by the Office of the U.S. Trade Representative. Some have been granted and more have been denied but most are still at various stages of review.
U.S. Customs and Border Protection is continuing to retire old Automated Commercial Environment reports and launch new ones, providing a wealth of information that importers can use to boost compliance and duty savings efforts.
Classifying clothes hangers separately from apparel can offer cost savings but importers should use caution in utilizing this method.
Importers of food for humans or animals face several upcoming compliance dates under the Food and Drug Administration’s foreign supplier verification program. Sandler, Travis & Rosenberg is conducting a webinar Jan. 29 on how importers can prepare for and manage FDA inspections under this program – click here for more information or to register.