U.S. Secretary of Commerce expected to present results of national security investigation into auto imports in August.

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U.S. Commerce Secretary, Wilbur Ross Official Portrait

U.S. Secretary of Commerce Wilbur Ross (pictured above), will present his Department’s findings on the national security investigation of auto imports into the US later next month.

The report to President Trump could impact foreign automakers as the results may lead to the importation of new tariffs – up to 25% on imported cars and parts.

Earlier in May, the U.S. Department of Commerce started a “Section 232” investigation to determine whether imports of cars and parts pose a risk to U.S. national security. As you are aware, invoking Section 232 is the same rule Trump used to impose tariffs on steel and aluminum at 25% back in March of this year.

Last week, foreign governments from Japan, Canada and the EU along with US industry groups met with Commerce to express opposition to the investigation. These groups argued higher tariffs would harm American consumers and workers along with the economy. Part of the harm would stem from an estimated increase in price of imported cars by $6,000 and price of domestic built cars by $2,000.

Check back for further news regarding the auto import tariffs as they become available.

CBP seizes counterfeit mermaid and fashion dolls.

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Photo by Pixabay on Pexels.com

As reported by the U.S. Customs and Border Protection (CBP) media relations office – CBP agents at the International Falls Port of Entry in Minnesota inspected a rail container and found merchandise that violated intellectual property rights (IPR) regulations.

As you are aware, CBP enforces the intellectual property rights and trademark rights of companies that register their mark with CBP. When goods are suspected of violating IPR – CBP will send photos or a sample to the property rights holder for verification. More often than not, the rights holder will notify CBP that the goods are counterfeit.

Specifically, CBP seized 60,180 mermaid and fashion dolls that contained copyright protected markings. If protected markings are found, even on a small doll accessory or only one doll, CBP will seize items as they had in this case. CBP calculates the seizure value based on the total MSRP if the items were authentic. Here, CBP in Minnesota claims the seized goods total approximately $601,198.

While the CBP media release doesn’t specifically mention the brand name, based on 60,180 dolls having a combined value of $601,198 and based on my experience as a parent to a daughter who loves Barbie – the seized dolls are counterfeit of the standard grocery store Barbie doll for about $10.

So what happens after a seizure? CBP will seize the goods and give the importer of record several options. CBP may also access civil penalties to the IOR.

If you or anyone you know has had items seized by CBP for IPR violations, or if you have any trade and customs law questions – contact experienced customs attorney, David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

 

 

White House imposes tariffs on $50 billion of Chinese goods.

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As expected, the administration announced Section 301 tariffs on about $50 billion worth of Chinese goods with two purposes: (1) balance the trade relationship between the US and China and (2) prevent the transfer of American technology and intellectual property to China when US businesses operate in China.

After the announcement this morning, China responded by issuing their own tariffs on 659 types of goods from the US starting on July 6th. When announcing the initial $50 billion in tariffs, Trump also indicated any Chinese retalation will also be met with additional US tariffs.

Cliff Notes version of today’s developments:

  1. 2/3rds of the US duties on 1,102 types of goods begins July 6th.
  2. The goods announced on Friday will apply later after a review period ends.
  3. The US imposed these tariffs to limit the transfer of technology to China.
  4. Some lawmakers say these tariffs will only impact the average American due to higher prices.
  5. The first list of goods subject to tariffs can be found here.
  6. The second list of goods subject to tariffs can be found here:

Whether or not these announcements are posturing on both sides, check back for more details.

If you have any questions on how these new tariffs will impact your import or export business, contact experienced trade attorney, David Hsu at 832-896-6288 or by email at: dhsu@givensjohnston.com.

 

Trump administration considering new tariffs on imported vehicles.

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Reuters reports the Trump administration may consider imposing new tariffs on imported vehicles based under Section 232 of the Trade Expansion Act of 1962.

A little bit of background – a section 232 investigation is conducted under the authority of the Trade Expansion Act of 1962, as amended and the purpose of a 232 investigation is to determine the effect of imports on the national security. Investigations may be initiated based on an application from an interested party, a request from the head of any department or agency, or may be self-initiated by the Secretary of Commerce.

Reuters reports the administration is currently considering tariffs of up to 25 percent for imported vehicles. As this was just announced, the plan is still not yet implemented and will receive much feedback from interest groups, foreign trading partners, domestic dealers of importer cars and anyone else involved in the import car business.

Check back for the latest news. If you have any questions about the current steel and aluminum tariffs initiated under section 232, contact experienced trade attorney – David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

ZTE and Huawei banned for sale to US military personnel.

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Photo by Alex Fu on Pexels.com

In addition to my blog post from April 19, 2018, ZTE has once again made news according to a Washington Post May 2nd article. In the Washington Post article, the Pentagon instructed the military from selling ZTE and Huawei branded phones from U.S. military bases.

The Defense Department cited security risks posed by the devices made by Huawei and ZTE writing:

“Huawei and ZTE devices may pose an unacceptable risk to Department’s personnel, information and mission” and that “it was not prudent for the Department’s exchanges to continue selling them to DoD personnel.”

Besides phones, modems and other wireless products manufactured by ZTE and Huawei are also included in the ban.

Under the direction of the President, the move by the Pentagon was an attempt to limit the use of wireless equipment manufactured in China that may contain technology used to spy or hack US citizens and military personnel.

Trump delays decision on steel and aluminium tariffs.

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A little background – back in March 2018, President Trump imposed worldwide tariffs of 25% on imports of steel and 10% on aluminum. Countries such as Canada, Mexico and the European Union were temporarily exempted from these tariffs.

Later in April, the US gave South Korea a permanent exemption from these tariffs in exchange for a 30% reduction of SK exports of steel to the United States.

One country not exempted was China, and as posted previously on this blog, China retaliated with their own duties on many US imports to the middle kingdom.

Fast forward to May 1st and the current administration has extended negotiations on steel and aluminium tariffs for an additional 30 days with Canada, Mexico and the European Union. Tentative agreements have been reached with Argentina, Brazil and Australia.

Check back here for more details as they become available.

Court of International Trade sides with Canadian textile importer and dismisses Customs $4.5 million penalty claim.

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In a just released decision by the the U.S. Court of International Trade (CIT), the CIT dismissed U.S. Customs and Border Protection’s (CBP) efforts to collect $4.5 million in penalties against Tricots Liesse 1983, Inc. (Tricots), a Candian textile company importing goods into the US. The full text of the CIT Slip Op. 18-29 can be found here.

In the instant case, Tricots tried to correct NAFTA rules of origin claims by filing a prior disclosure with CBP. CBP issued an administrative penalty and duty demand while not providing Tricots an opporutnity for oral hearings during the administrative proceedings. CBP then filed suit against Tricots in the CIT to collect $4.5 MM in penalties and duties. In response, Tricots filed a motion to dismiss the claims because CBP did not allow Tricots the opportunity to attempt administrative remedies.

In short, the CIT opinion faults CBP for not allowing Tricots a “reasonable opportunity” to make oral representations after issuing the penalty notice. This decision helps future importers by ensuring any importer has the opportunity to receive an administrative hearing before CBP imposes a penalty.

If you have received a penalty notice from Customs and need assistance, contact experienced trade and customs attorney David Hsu at 832-896-6288, or by email at dhsu@givensjohnston.com.

US proposes tariffs impacting $50 billion worth of Chinese imports.

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The current administration announced tariffs on an additional 1,300 technological and transport products from China. Imports of these 1,300 goods are worth an an estimated $50 billion and could be subject to an additional 25-percent tariff.

The list posted on US Trade Representative’s (USTR) office covers nonconsumer products, ranging from chemicals to electronic components and excludes some common consumer products such as cellphones and laptops assembled in China. However, the list also includes consumer products such as flat-panel televisions, LED’s, motorcycles and electric cars.

Part of the justification for tariffs is an effort by the administration to cut the trade surplus – in which China has a $375 biillion trade surplus on goods from the US in 2017. Throughout his campaign, President Trump promised reducing the trade surplus by $100 billion during his presidency.

After the proposals were announced, the USTR has a public comment period from now until May 11th. A hearing will follow on May 15th. During this comment period, companies and consumers will be able to ask the government to remove or add certain products to the list.

If you have any question about these potential tariffs or want to know more about how to get your good off the list, contact trade and customs attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Cargo Systems Messaging Service – Additional Duties on Imports of Steel and Aluminum under Section 232 – March 22, 2018.

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U.S. Customs and Border Protection (CBP) released Cargo Systems Messaging Service Number 18-000240 with additional information regarding the imports of steel and aluminum under Section 232.

If you have any questions regarding this, please contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

CSMS #18-000240

Title:
Additional Duty on Imports of Steel and Aluminum Articles under Section 232 Date: 3/22/2018 11:39:25 PM To: Automated Broker Interface, ACE Portal Accounts, ACE Reports, Air Manifest, New ACE Programming, Ocean Manifest, Partner Government Agencies, Rail Manifest, Trade Policy Updates, Truck Manifest  Additional Duty on Imports of Steel and Aluminum Articles under Section 232 of the Trade Expansion Act of 1962

BACKGROUND:
On March 8, 2018, the President issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018.  See the Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018.  On March 22, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States.

These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.

COMMODITY:
Steel mill and aluminum articles, as specified in the Presidential Proclamations.

COUNTRIES COVERED:
March 23, 2018 through April 30, 2018:  All countries of origin except Canada, Mexico, Australia, Argentina, South Korea, Brazil and  member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

As of May 1, 2018:  All countries of origin.

Please note this is based on the country of origin, not the country of export.

ENTRY SUMMARY FILING INSTRUCTIONS:
Steel Products In addition to reporting the regular Chapters 72 & 73 of the Harmonized Tariff Schedule (HTS) classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:9903.80.01 (25 percent ad valorem additional duty for steel mill products) Aluminum Products In addition to reporting the regular Chapter 76 of the HTS classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty: 9903.85.01 (10 percent ad valorem additional duty for aluminum products)

Importers and filers failing to submit the required Chapter 99 HTS classifications with the entry summary information for imports under the specified Chapter 72, 73, and 76

HTS classifications for the covered countries of origin will receive the following reject messages:

E1 IQ10    LINE SUBJECT TO QUOTA

E1 FQ09   QUOTA NOT ALLOWED FOR ENTRY TYPE

E1 FQ05   BANNED IMPORT

E1 RF998 TRANSACTION DATA REJECTED

Note:  Quota is not in effect, but this ACE functionality is being used to validate entry summary transmissions and reject when validations determine the data is missing the required chapter 99 number.

Importers or filers receiving one of the reject messages above, who have researched their classification and dates to confirm the entry summaries were incorrectly rejected, should contact their assigned Client Representative with the results of their review.

Additional Information
Any steel or aluminum article subject to the Section 232 duties that is admitted into U.S. foreign trade zones on or after 12:01 a.m. eastern daylight time on March 23, 2018, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.

Any steel or aluminum article that was admitted into U.S. foreign trade zones under “privileged foreign status” as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by the Proclamations.

The merchandise covered by the additional duties may also be subject to antidumping and countervailing duties.

CBP will issue additional guidance on entry requirements for any products excluded from these measures, as soon as information is available.  CBP will also issue updated guidance if there are any changes to these measures, including any changes to exempted countries and any new requirements, such as quota requirements.

FOR FURTHER INFORMATION:For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; and the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States.

Questions related to Section 232 entry filing requirements should be emailed to adcvdissues-hq@cbp.dhs.gov.

Questions from the importing community concerning ACE rejections should be referred to their Client Representative.

Customs and Border Protection’s 2018 E-Commerce Strategy.

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According to a U.S. Customs and Border Protection (CBP) media release on March 8th, 2018 – CBP released their new strategy to deal with the increase in volume of e-commerce packages into the United States.

The media release is wordy and you are already to go back to Facebook – so here’s a quick cliff notes version of the media release:

1. More people are using the internet to buy direct from China, leading to more small packages entering the US.

2. The large increase in volume of small packages (commonly indicated as “e-packet delivery”) means there is a greater likelihood of things entering the country that should not enter.

3. CBP is worried about a greater entry of items that violate intellectual property rights (fake watches, counterfeit purfume, fake iphones, etc) will make it into the US.

Some highlights of the CBP e-commerce strategy:

1. Educate people to be aware of customs regulations. Not sure how easy it will be to make people aware of customs regulations when people can’t even follow traffic regulations!

2. Partnership with foreign governments

3. Improve data collection from CBP targeting systems and field personnel.

4. The media release includes a lot of buzzwords: “more agile, dynamic workforce that utilizes state-of-art techniques and technology to better target high-risk shipments, improving data collection from CBP targeting systems, and leveraging enforcement partnerships.”

My thoughts:

Personally, I do not believe methods 1-4 will be able to adequately address the increased flow of these small packages from China. I believe CBP has other methods that they are not publicizing, and rightly so. Notifying the public how CBP searches for items that violate IPR, are counterfeit or not allowed for entry into the US would be counter-intuitive and could only lead to foreign manufacturers creating work arounds.

If you are a manufacturer overseas and ship many small package items to the US and want to know how this can effect your business, call experienced trade and customs attorney, David Hsu, 832.896.6288 or email at dhsu@givensjohnston.com