Exclusion Process for List 3

The U.S. Trade Representative has announced the procedures to request exclusions from 301 duties for goods found on List 3. An exclusion request form must be completed and submitted through a portal (http://exclusions.USTR.gov) which will open on June 30, 2019. The deadline to submit the requests is September 30, 2019. Each request must specifically identify a particular product and provide supporting data and the rationale for the requested exclusion. Responses to individual exclusion requests are due 14 days after the request is posted on the USTR portal. Any replies to responses to an exclusion request are due the later of 7 days after the close of the 14 day response period, or 7 days after the posting of a response. The USTR will evaluate each request on a case by case basis. Granted exclusions will be effective retroactively to September 24, 2018 and extend for one year after the publication of the exclusion determination in the Federal Register.

We encourage importers to act quickly to submit their exclusion requests for List 3. List 3 has over 5700 items, far more than Lists 1 and 2. List 1 has about 800 items. 214 exclusions have been granted to date with 2116 exclusion requests still undergoing review. List 2 has about 280 items. No exclusions have been granted yet. 1259 exclusion requests have been denied and 1661 requests are undergoing review. We anticipate there will be many thousands of requests for List 3 which will take the USTR quite some time to review given the status of exclusion requests for Lists 1 and 2.

Please contact Vandegrift for any questions regarding the Chinese 301 tariffs and obtaining refunds for goods on these exclusion lists.

Fifth Set of Exclusions to 301 Tariffs Published

The U.S. Trade Representative has published a fifth set of exclusions to List 1 of the Chinese 301 tariffs. These products will no longer be subject to 25% additional duties. 

The exclusions are retroactive to July 6, 2018, and will remain in place until June 4, 2020. The exclusions are to be claimed using HTS 9903.88.10. There is one tariff number and numerous product-specific items on this most recent list.

Please contact Vandegrift for any questions regarding the Chinese 301 tariffs and obtaining refunds for goods on the exclusion lists.

Mexican Tariffs Averted

The tariffs on goods from Mexico that were threatened by the White House have now been “indefinitely suspended.” Tariffs of 5% were to have gone into effect today, with incremental increases up to 25%, in order to stem the tide of illegal immigration from Mexico. 

The State Department issued a joint declaration outlining plans to address efforts to curb the “challenges of irregular migration.”

President Trump Threatens Tariffs on Goods from Mexico

President Trump tweeted yesterday that he plans to impose a 5% tariff on all goods from Mexico starting June 10th as a measure to stem the tide of illegal immigration. A White House announcement went on to state that if the immigration crisis persists, the tariffs will be raised to 10% on July 1st, 15% on August 1st, 20% on September 1st, and 25% on October 1st. The tariffs would remain permanently at 25% “unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory.” 

This move could jeopardize the USMCA trade agreement. Mexico is the third largest trading partner with the United States with $611.5 billion in total goods trade during 2018, with imports accounting for $346.5 billion.

We will continue to update you as more details become available. 

CTPAT Minimum Security Criteria Updated

The Minimum Security Criteria (MSC) for the Customs Trade Partnership Against Terrorism (CTPAT) have been updated and posted to the Public Library on the CTPAT portal. The long overdue update is meant to be reflective of the current supply chain environment and the threats facing today’s global supply chain. Issues related to cybersecurity, the protection of the supply chain from agricultural contaminants and pests, the prevention of money laundering and terrorism financing, and the proper use and management of security technology, such as intrusion alarms and security camera systems, have been incorporated into the program’s new criteria. CTPAT members are expected to implement the new criteria throughout 2019. Validations taking place in 2020 will be based upon the new MSC.

The MSC booklet includes an approach for implementing the MSC according to the following phases:

  • Phase 1 – Cybersecurity, Conveyance and IIT Security, and Seal Security

  • Phase 2 – Education, Training, and Awareness; Business Partner Security; Risk Assessment

  • Phase 3 – Security Vision and Responsibility, Physical Security, Physical Access Controls

  • Phase 4 – Agricultural Security, Personnel Security, Procedural Security

CTPAT members are encouraged to work closely with their Supply Chain Security Specialists to ensure their security profiles are up to date in the portal and in alignment with the new security criteria.

Please contact Vandegrift if you would like a copy of the new MSC.

Turkey GSP Status Removed

President Trump has issued a Proclamation removing Turkey from the Generalized System of Preferences (GSP) program. GSP provides for the duty free importation of a wide range of products from designated beneficiary developing countries. 

The Proclamation states that “based on its level of economic development, it is appropriate to terminate Turkey’s designation as a beneficiary developing country effective May 17, 2019.” Additionally, the exemption for Turkey from application of safeguard measures on solar cells and large residential washers is removed.

In a separate announcement, the White House has reduced the Section 232 steel tariffs from 50% to 25% for steel imports from Turkey due to the decline in shipments of steel articles from that country. This takes effect May 21, 2019.

Section 301 List 4 is Proposed

The U.S. Trade Representative has published a notice in today’s Federal Register proposing further action by imposing additional tariffs up to 25% on nearly all remaining HTS numbers not currently found on Lists 1 through 3. The exceptions are pharmaceutical products, certain medical goods, rare earth materials, critical minerals, and goods that have been previously granted exclusions. The full list of proposed HTS numbers is in the Annex to the notice. The list impacts wearing apparel, footwear, toys, electronics, and other consumer goods.

The USTR is accepting comments according to the following schedule:

June 10, 2019 – Due date for filing requests to appear and a summary of expected testimony at the public hearing.

June 17, 2019 – Due date for submission of written comments.

June 17, 2019 – Public hearing at the U.S. International Trade Commission.

Seven days after the last day of the public hearing: Due date for submission of post-hearing rebuttal comments.

When submitting comments, the public should address the tariff numbers to be subject to the increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added; the level of the increase, if any, in the rate of duty; and the appropriate aggregate level of trade to be covered by additional duties. 

In commenting on the inclusion or removal of particular subheadings, commenters should address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers. Further details on how to submit comments are found in the Federal Register notice. We encourage all interested parties impacted by List 4 to participate in this process.

Importers should also take a close look at their Customs bonds to ensure sufficient coverage should these additional duties go into effect.

Based on the date schedule above, the List 4 duties would not go into effect prior to June 24, 2019. The G20 summit is scheduled to be held in Japan on June 28-29, 2019. President Trump is expected to meet with Chinese President Xi at the summit which could impact whether or not List 4 goes into effect or at what duty rate. 

Vandegrift will continue to keep you updated as new information becomes available.

Fourth Set of Exclusions to 301 Tariffs Published

The U.S. Trade Representative has published a fourth set of exclusions to List 1 of the Chinese 301 tariffs. These products will no longer be subject to 25% additional duties. The exclusions are retroactive to July 6, 2018, and will remain in place until May 14, 2020. There are five tariff numbers and numerous product-specific items on this list.

The third set of exclusions will remain in place until April 17, 2020. The second set of exclusions to List 1 is in effect until March 24, 2020. The first set of exclusions to List 1 will remain in place until December 27, 2019. These lists are also retroactive to July 6, 2018.

Importers need to closely watch liquidation dates to ensure post summary corrections or protests are timely filed to take advantage of these exclusions during the allowed timeframes.

Please contact Vandegrift for any questions regarding the Chinese 301 tariffs and obtaining refunds for goods on these exclusion lists.

301 Tariff Increase Recap

The 301 tariff rate for List 3 increased from 10% to 25% effective for goods with an export date of 5/10/19 and later, and with an entry date of 5/10/19 and later. The HTS numbers 9903.88.03 and 9903.88.04 remain in effect and are subject to the 25% duty rate.

For goods that are exported prior to 5/10/19, but are released from 5/10/19 and before 6/1/19, the 301 tariff rate for List 3 will remain at 10%. The HTS number to be used for this period is 9903.88.09.

There is no news yet on whether List 4 for the remaining tariff numbers will go into effect. Vandegrift will continue to monitor the situation and keep you advised.

May 10th Update to Chinese 301 Duties

The U.S. Trade Representative has issued an update to the implementation of the increase for the third tranche of 301 duties from 10% to 25%. HTS number 9903.88.09 will apply to Chinese products exported prior to May 10, 2019, and entered into the United States on or after May 10, 2019, and before June 1, 2019. The duty rate for 9903.88.09 will remain at 10% in this interim period.

Goods exported on or after May 10, 2019 will be subject to the 25% duty rate under HTS 9903.88.03 and 9903.88.04.

Please contact Vandegrift with any questions regarding the effective date of the new tariffs.

Update to 301 Duties Increase Effective May 10th

Today’s Federal Register contains the official notice of the increase in the 301 tariffs for Chinese goods on List 3 from 10% to 25% effective May 10, 2019. While the notice states the increase is effective for goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, it goes on to say the increase is effective for goods exported to the United States on or after May 10, 2019. This grants a reprieve for shipments already on the water.

Additionally, the notice states that the U.S. Trade Representative will establish an exclusion process similar to what was put into place for Lists 1 and 2. Interested parties will be able to submit exclusion requests to the USTR for relief from the additional List 3 duties. A separate notice will be published by the USTR detailing this process.

Please contact Vandegrift with any questions regarding the effective date of the new tariffs.

301 Duties for List 3 to Increase to 25% Effective May 10th

The U.S. Trade Representative has published a notice in the Federal Register announcing that the 301 tariffs for Chinese items on List 3 will increase from 10% to 25% effective for goods entered on or after May 10, 2019. The notice states, “In light of the lack of progress in discussions with China, the President has directed the Trade Representative to increase the rate of additional duty to 25 percent.”

A 25% duty on the remaining goods from China (List 4) has been threatened by the President via tweet. The outcome of this week’s trade talks with China may determine if these duties become reality. We will keep you updated as new information becomes available.

Please contact Vandegrift with any questions regarding the implementation of these additional duties.

Trump Threatens to Raise Tariffs on Chinese Goods

In a series of tweets by the president last week, he has threatened to increase tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent and levy a new 25 percent fee on all remaining Chinese imports “shortly.’’

A number of sources indicate that Trump has accused China of trying to “renegotiate” the terms of an agreement that representatives have been trying to finish for five months.

Several trade groups have urged the president to drop his threatened escalation citing additional tariffs hurt "...U.S. families, U.S. workers, U.S. companies and the U.S. economy.”

The recent tweets are a change of tone based on recent administration statements that they had been optimistic about a deal.

This is an evolving situation and we will keep you updated a new information becomes available.

Third Set of Exclusions to 301 Tariffs Published

The U.S. Trade Representative has published a third set of exclusions to List 1 of the Chinese 301 tariffs. These products will no longer be subject to the 25% duties imposed on List 1. The exclusions are retroactive to July 6, 2018, and will remain in place until April 17, 2020. Please note this third list of exclusions is product specific rather than based solely on the HTS numbers. Importers are advised to review these items carefully to see if their products may be covered.

The second set of exclusions to List 1 is in effect until March 24, 2020. The first set of exclusions to List 1 will remain in place until December 27, 2019. These lists are also retroactive to July 6, 2018. Please contact Vandegrift for any questions regarding the Chinese 301 tariffs and obtaining refunds for goods on these exclusion lists.

New ADD/CVD Petitions Filed Against Ceramic Tile from China

On April 10, 2019, The Coalition for Fair Trade in Ceramic Tile filed antidumping and countervailing duty petitions on imports of ceramic tile products from China.

According to the petition, the subject merchandise includes ceramic flooring tile, wall tile, paving tile, hearth tile, porcelain tile, mosaic tile, finishing tile, and the like. All ceramic tile is subject to the scope regardless of whether the tile is glazed or unglazed, regardless of size, regardless of the water absorption coefficient by weight, regardless of the extent of vitrification, and regardless of whether or not the tile is on a backing. Ceramic tile is covered by the scope regardless of end use, size, thickness, and weight. For the avoidance of doubt, subject merchandise includes tiles pressed as very large single pieces, up to and exceeding 5’ X 15’.

The petition continues that subject merchandise includes ceramic tile produced in the People’s Republic of China (PRC) that undergoes minor processing in a third country prior to importation into the United States. Similarly, subject merchandise includes ceramic tile produced in the PRC that undergoes minor processing after importation into the United States. Such minor processing includes, but is not limited to, one or more of the following: beveling, cutting, trimming, staining, painting, polishing, finishing, or any other processing that would otherwise not remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope product.

Subject merchandise is currently classified in the Harmonized Tariff Schedule under the following *subheadings of heading 6907: 6907.21.10.05, 6907.21.10.11, 6907.21.10.51, 6907.21.20.00, 6907.21.30.00, 6907.21.40.00, 6907.21.90.11, 6907.21.90.51, 6907.22.10.05, 6907.22.10.11, 6907.22.10.51, 6907.22.20.00, 6907.22.30.00, 6907.22.40.00, 6907.22.90.11, 6907.22.90.51, 6907.23.10.05, 6907.23.10.11, 6907.23.10.51, 6907.23.20.00, 6907.23.30.00, 6907.23.40.00, 6907.23.90.11, 6907.23.90.51, 6907.30.10.05, 6907.30.10.11, 6907.30.10.51, 6907.30.20.00, 6907.30.30.00, 6907.30.40.00, 6907.30.90.11, 6907.30.90.51, 6907.40.10.05, 6907.40.10.11, 6907.40.10.51, 6907.40.20.00, 6907.40.30.00, 6907.40.40.00, 6907.40.90.11, and 6907.40.90.51. Subject merchandise may also enter under subheadings of headings 6914 and 6905: 6914.10.80.00, 6914.90.80.00, 6905.10.00.00, and 6905.90.00.50. *The HTS subheadings are provided for convenience and customs purposes only. 

The scope excludes ceramic bricks properly classified under HTS 6904.10.00.10 through 6904.90.00.00.

Please contact Vandegrift with any questions regarding the ADD/CVD petitions on ceramic tiles.

Second Set of Exclusions to 301 Tariffs Published

The U.S. Trade Representative has published a second set of exclusions to List 1 of the Chinese 301 tariffs. These products will no longer be subject to the 25% duties imposed on list 1. The exclusions are retroactive to July 6, 2018, and will remain in place until March 24, 2020. These join the first set of exclusions to List 1 published in December 2018 which are also retroactive to July 6, 2018, and will remain in place until December 27, 2019. Please note many of the exclusions are product specific, so importers need to review them to see if they can take advantage.

Requests for exclusions from List 2 are still undergoing review by the USTR. In February, Congress directed the USTR to develop an exclusion process for List 3 by March 17, 2019, however the USTR did not do so. The USTR has avowed no exclusion process will be forthcoming for List 3 unless those tariffs are increased from 10% to 25%.

Please contact Vandegrift with any questions regarding Chinese 301 tariffs.

TSCA Title VI Formaldehyde Emission Standards for Composite Wood Products

Importer and Supplier Requirements, Beginning March 22, 2019

Importer Requirement: TSCA IMPORTER CERTIFICATION

  • Beginning March 22, 2019, for each imported shipment of composite wood products, or component parts or finished goods that contain composite wood products, the importer must sign, and provide to the broker the following certification under TSCA section 13: “I certify that all chemical substances in this shipment comply with all applicable rules or orders under TSCA and that I am not offering a chemical substance for entry in violation of TSCA or any applicable rule or order under TSCA.”

  • The TSCA Import Certification should be on the importer's letterhead and include the certifying individual's complete name, telephone number, and email address. 

Supplier Requirement: TSCA TITLE VI COMPLIANCE STATEMENT

  • The supplier must continue to include a written statement on either the Commercial Invoice or Bill of Lading that the composite wood product panels, component parts, or finished goods are TSCA Title VI compliant or were imported before June 1, 2018.

Summary:

Beginning March 22, 2019, TSCA Title VI Formaldehyde Emission Standards for Composite Wood Products requires TSCA Section 13 Import Certification upon import into the customs territory of the U.S, and applies to composite wood products (panels of hardwood plywood, particleboard, medium density fiberboard, thin-medium density fiberboard, etc.,) component parts containing such composite wood products, and finished goods containing such composite wood products that are imported into the U.S. 
In addition to the importer providing an import certification, under the TSCA Title VI regulation, you must also obtain and keep the following records to document that you have taken reasonable precautions:

Records:

  • Records identifying the producer of the composite wood product panels that you are importing, or the producer of the composite wood product panels that are incorporated into the component parts or finished goods that you are importing.

  • The date that the composite wood product panels were produced.

  • Records identifying your supplier, if different from the panel producer, and the date you purchased the composite wood product panels, component parts, or finished goods.

  • Bills of lading, invoices, or comparable documents that include a written statement from your supplier that the composite wood product panels, component parts, or finished goods are TSCA Title VI compliant or were imported before June 1, 2018.

  • These records must be kept for a period of three years from the import date or the date of the purchases or shipments described in the records. The records must be made available to EPA within 30 calendar days of request.

Labels:

Importers must ensure that the labels applied by panel producers on panels or by fabricators on finished goods remain intact and readable. If you purchase panels or finished goods that have been labeled by bundle (or by box, in the case of finished goods), and you sell individual panels or finished goods, you must retain a copy of the label, be able to identify the products associated with that label, and make the label information available to potential customers upon request. Importers must have a method to identify the supplier of the panel or finished good which links the information on the label to the products.

Until March 22, 2019, regulated products certified as compliant with the CARB ATCM Phase II emission standards must be labeled as compliant with either the TSCA Title VI or the CARB ATCM Phase II emission standards. Regulated products manufactured in or imported into the United States after March 22, 2019 may not rely on the CARB reciprocity of 40 CFR 770.15(e) and must be certified and labeled as TSCA Title VI compliant by an EPA TSCA Title VI TPC with all of the required accreditations.

The EPA also has several resources and guidance materials on the Agency’s formaldehyde homepage: 

  • https://www.epa.gov/formaldehyde/resources-and-guidance-materials-translations-formaldehyde-emission-standards-composite

  • The TSCA Hotline (tsca-hotline@epa.gov or 202-554-5603) can also answer questions related to formaldehyde and the import certification process.

Any questions relating to the TSCA Title VI requirements can be sent directly to Christine Sliwinski, LCB, PGA Compliance Manager @ Email: csliwinski@vandegriftinc.com 

New ADD/CVD Petition Filed Against Wood Cabinets and Vanities

This week the American Kitchen Cabinet Alliance, a group consisting of 27 US domestic cabinet manufacturers filed a new anti-dumping and countervailing duty petition against wood cabinets and vanities from China.  The scope of this petition covers wooden cabinets and vanities that are designed for permanent installation (including floor mounted, wall mounted, ceiling hung or by attachment of plumbing), and wooden components thereof that are made substantially of wood or engineered wood.

Imports of subject goods are classified under HTSUS 9403.40.9060 and 9403.60.8081, and the subject component parts may be entered under HTSUS 9403.90.7080.

Based on an analysis done by the domestic industry they estimate dumping margins in the area of 175.5% to 259.99%, with an average margin of 216.04%.

Vandegrift will follow this developing issue and continue to advise as new information becomes available.

India and Turkey to Lose GSP Status

The U.S. Trade Representative has announced that India and Turkey will lose their GSP status after a 60 day period as they no longer comply with the program’s criteria. The Generalized System of Preferences provides duty free treatment for certain products for beneficiary developing counties.

The USTR’s announcement states that India has failed to provide the U.S. with assurances that it will provide equitable and reasonable access to its markets in numerous sectors. Because India has implemented multiple trade barriers that negatively affect U.S. Commerce, it has failed to meet GSP criteria and will be removed from the program.

Turkey’s GSP status is being terminated as the country is sufficiently economically developed and no longer needs to benefit from preferential tariff treatment in the U.S. market.

These changes will not take effect until 60 days after notifications to Congress and the governments of India and Turkey. We will send a further update once the termination date has been established.