Increased Tariffs on Certain Steel and Aluminum Products Likely -
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
President Trump has indicated that he intends to proceed with imposing increased tariffs on certain imported steel and aluminum products, which could take effect as early as 15 days after the President makes a formal decision. The new tariffs will be based upon the recommendations contained in the Department of Commerce’s (“DOC”) reports on the impact of steel and aluminum imports on national security pursuant to the DOC’s self-initiated investigation under Section 232 of the Trade Expansion Act of 1962. The Reports were issued on January 11 for steel and January 17 for aluminum products. In the reports, the DOC recommended various actions to reduce the level of imports of these products including import quotas and/or increased tariffs (see below).
The law gives the President 90 days from receipt of the Reports to make a determination on the DOC recommendations. A DOC press release states these dates are April 11 for steel and April 19 for aluminum, although the President can act sooner than 90 days. In recent comments, President Trump indicated that he will make a formal determination next week imposing tariffs of 25 percent ad valorem on covered steel products and 10 percent ad valorem on covered aluminum products. The President will then have 15 days after his determination to “implement” these measures. Implementation can consist of imposing the additional tariffs and/or quotas to begin on that fifteenth day; or negotiating agreements with trading partners to restrict exports to the United States. President Trump has indicated the tariffs would apply to all countries, which follows one of the DOC recommendations. The President did not indicate whether there would be any delayed effective dates for imposition of duties or other exemption for in-transit shipments or the like. Based upon prior Section 232 cases, it would appear the President has authority to delay the effective date (e.g., for goods in transit).
The scope of products affected by these measures presumably will be consistent with the Product Scope of the Investigations set forth in the two reports. The reports identify product scope by 6-digit Harmonized Tariff Schedule subheadings. The covered products are primarily bars, coil, plates, pipes and tubes, and semi-finished products, along with relatively few finished products. Accordingly, importers of steel and aluminum products should review the Scope sections of the reports and confirm the classification of their goods as soon as possible.
The DOC Reports recommended the following optional import measures:
- Worldwide Quota - Quota of 86.7 percent of 2017 exports on certain aluminum products.
- Worldwide Tariff - Tariff of 7.7 percent on certain aluminum products.
- Country-Specific Tariff - Tariff of 23.6 percent on all imports of certain aluminum products from: China, Hong Kong, Russia, Venezuela and Vietnam in addition to any existing AD/CVD orders. All other countries would be limited to 100 percent of their 2017 import volumes.
- Worldwide Quota - Quota of 63 percent of 2017 exports of certain steel products.
- Worldwide Tariff - Tariff of 24 percent on all imports of certain steel products.
- Country-Specific Tariff - Tariff of 53 percent on certain steel products from: Brazil, South Korea, Russia, Turkey, India, Vietnam, China, Thailand, South Africa, Egypt, Malaysia and Costa Rica. All other countries would be limited to 100 percent of their 2017 import volumes.
The DOC Reports recommend that the President adopt an appeals process for “affected U.S. parties” (which might include U.S. importers and manufacturers using imported steel and aluminum) to request exclusions from any tariff or quota imposed. Exclusion decisions will be based on (1) the availability of a comparable product in the United States and (2) any applicable national security concerns. Imported products that are similar to products already produced domestically are less likely to be granted an exclusion whereas imported products that are not readily available are more likely to be granted an exclusion. The DOC report indicates the product exclusion process will take up to 90 days. The specific procedures for requesting product exclusions have not yet been issued.
The duties and/or quotas to be imposed under Section 232 are in addition to any applicable regular import duties and any antidumping or countervailing duties already in effect or subject to pending investigations.
The DOC Reports, which include the Product Scope descriptions, are available at the following links:
Please contact our offices if you have questions regarding:
- Product scope coverage and the tariff classification of potentially affected imports;
- Potential effective dates of the measures and determining the “date of entry” for consumption;
- Submission of product exclusion requests;
- Any other questions related to this Investigation
Petitions for the Imposition of Antidumping Duties and Countervailing Duties on Imports of Laminated Woven Sacks from the Socialist Republic of Vietnam - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
I. Type of Action: Antidumping Duty (“AD”): Socialist Republic of Vietnam; Countervailing Duty (“CVD”): Socialist Republic of Vietnam;
II. Product: Laminated woven sacks are bags consisting of one or more plies of fabric consisting of woven polypropylene strip and/or woven polyethylene strip, regardless of the width of the strip; with or without an extrusion coating of polypropylene and/or polyethylene on one or both sides of the fabric; laminated by any method either to an exterior ply of plastic film such as biaxially-oriented polypropylene ("BOPP") or to an exterior ply of paper that is suitable for high-quality print graphics (i.e., it has an ISO brightness of 82 or higher and a Sheffield Smoothness of 250 or less); printed; displaying, containing, or comprising three or more colors, regardless of the type of printing process used; with or without lining; whether finished or unfinished; whether or not closed on one end; whether or not in roll form (including, but not limited to, sheets, lay-flat tubing, and sleeves); with or without handles; with or without special closing features; not exceeding one kilogram in weight. Laminated woven sacks subject to the scope are typically used for retail packaging of consumer goods such as pet foods and bird seed. Laminated woven sacks produced in Vietnam are subject to the scope regardless of the country of origin of the fabric used to make the sack.
III. HTS classifications: Effective July 1, 2014, subject laminated woven sacks are classifiable under Harmonized Tariff Schedule of the United States ("HTSUS") subheadings 6305.33.0040. If entered with plastic coating on both sides of the fabric consisting of woven polypropylene strip and/or woven polyethylene strip, laminated woven sacks may be classifiable under HTSUS subheadings 3923.21.0080, 3923.21.0095, and 3923.29.0000. If entered not closed on one end or in roll form (including sheets, lay-flat tubing, and sleeves), laminated woven sacks may be classifiable under other HTSUS subheadings, including 3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500. If the polypropylene strips and/or polyethylene strips making up the fabric measure more than 5 millimeters in width, laminated woven sacks may be classifiable under other HTSUS subheadings including 4601.99.0500, 4601.99.9000, and 4602.90.0000. Although HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope is dispositive.
IV. Date of Filing: March 7, 2018
V. Petitioners: Laminated Woven Sacks Fair Trade Coalition (the “Coalition”) and its individual members.
VI. Foreign Producers/Exporters. Please contact our office for a list filed with the petition.
VII. US Importers named. Please contact our office for a list filed with the petition.
VIII. Alleged Dumping Margin (No CVD Rates listed): Socialist Republic of Vietnam: 109.95% - 294.57%;
A. Projected date of ITC Preliminary Conference: March 28, 2018. Please contact our office for a complete projected schedule for the AD investigation.
B. The earliest theoretical date for retroactive suspension of liquidation for the antidumping duty is May 16, 2018; for countervailing duty is March 27, 2018. Please contact our office for a complete projected schedule for the CVD Investigation.
C. Volume and Value of Imports: Please contact our office for a summary of the data filed with the petition.
D. List of Alleged Subsidy Programs: Please contact our office for a list of alleged subsidy programs.
If you have questions regarding how this investigation may impact future imports of scope merchandise, or whether a particular product is within the scope of the investigation, please contact one of our attorneys.
CBP Releases E-Commerce Strategy - U.S. Customs & Border Protection
Once fully implemented, the United States will have a stronger trade posture in the e-commerce environment.
WASHINGTON — U.S. Customs and Border Protection released today its e-commerce strategy that addresses the growing volume of imported small packages and the challenges and opportunities it presents for the U.S. economy and security. The e-commerce strategy strengthens CBP’s ability to protect health and safety while maintaining a strong trade facilitation posture in e-commerce.
CBP defines e-commerce as high-volume, low-value shipments purchased via electronic means. This growth in volume has increased the opportunity for illicit and dangerous products to cross our borders, placing Americans’ health and safety at risk and creating new risks that can compromise U.S. intellectual property rights.
“E-commerce is growing exponentially as consumers are increasingly enabled to complete purchases online. CBP must adapt and increase its ability to address the facilitation and enforcement challenges it creates,” said Acting Commissioner Kevin McAleenan. “CBP’s first e-commerce strategy positions CBP to address the various complexities, opportunities, and threats resulting from this global shift in trade to an e-commerce platform.”
This strategy highlights private industry and foreign governments as key stakeholders and resources in CBP’s continuous assessment of the e-commerce environment and includes efforts to educate the public and trade community to ensure they understand their responsibilities as importers to comply with customs regulations. The strategy also emphasizes enforcement initiatives, such as streamlining enforcement processes affected by increasing e-commerce volumes, leveraging enforcement partnerships with partner government agencies and foreign governments, and improving data collection from CBP targeting systems and field personnel.
“CBP remains committed to protecting businesses and consumers every day through aggressive enforcement of non-compliant trade,” said Executive Assistant Commissioner, Office of Trade, Brenda B. Smith. “The e-commerce strategy will strengthen CBP’s ability to protect U.S. consumers, manage threats in the e-commerce environment, strengthen international mail enforcement, and create stronger, longer-term partnerships here and abroad.”
As part of this strategy, CBP will work to enhance legal and regulatory authorities to better posture the agency to address emerging threats. In addition, it outlines the creation of a 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.
The document affirms CBP’s commitment to the Presidential Executive Order 13785, Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws, and the fulfillment of its mandates.
To further the agency’s e-commerce efforts, CBP officially established the E-Commerce and Small Business Branch within the Office of Trade on September 12, 2016. Additional information, including the strategy, is available at www.CBP.gov/e-commerce.
If you have any suspicion of or information regarding suspected fraud or illegal trade activity, contact CBP using the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.
CBP Intercepts World’s Most-Destructive Pest in Passenger Baggage at Dulles, BWI Airports - U.S. Customs & Border Protection
BALTIMORE – Trogoderma granarium, commonly known as Khapra beetle, is one of the world’s most destructive insect pests of stored grains, cereals and seeds, and it presents potentially crippling economic consequences to grain and cereal exporters such as the United States. Due to those consequences, Khapra beetle remains the only insect in which U.S. Customs and Border Protection (CBP) takes regulatory action, even when the insect is in a dead state.
CBP agriculture specialists at both Washington Dulles International Airport (Dulles) and Baltimore Washington International Thurgood Marshall Airport (BWI) recently encountered this dangerous insect pest.
CBP agriculture specialists at BWI discovered two live adult Khapra beetles, one dead immature larva, and several cast skins in two pounds of insect-infested, prohibited cow peas that a New York City resident brought from Nigeria February 23. U.S. Department of Agriculture (USDA) entomologist confirmed the specimens March 6 as Trogoderma granarium.
On January 24, CBP agriculture specialists at Dulles Airport discovered four live Khapra beetle adults, 12 live larvae, and several dead larvae and cast skins throughout a five-kilogram bag of prohibited basmati rice that a Washington, D.C. resident brought from Saudi Arabia. USDA entomologist confirmed Trogoderma granarium on February 7.
CBP incinerated all food products.
“Khapra beetle is one of the most invasive and destructive insects that Customs and Border Protection may encounter, and it poses a significant threat to our nation’s agriculture industries and to our export economy,” said Dianna Bowman, CBP Area Port Director for Baltimore. “Protecting America’s agricultural resources is of paramount concern to CBP, and it’s a mission that our agriculture specialists take very serious.”
According to the USDA Animal and Plant Health Inspection Service (APHIS), previous U.S. infestations of Khapra beetle have resulted in massive, long-term control and eradication efforts at great cost to the American taxpayer.
In 1953, California implemented extensive eradication measures following a Khapra beetle infestation discovered there. The effort was deemed successful, but at a cost of approximately $11 million. Calculated in today’s dollars, that would be about $90 million.
The Khapra beetle is labeled a ‘dirty feeder’ because it damages more grain than it consumes, and because it contaminates grain with body parts and hairs. These contaminants may cause gastrointestinal irritation in adults and especially sicken infants.
Khapra beetles can also tolerate insecticides and fumigants, and can survive for long periods without food.
“This interception is another example that demonstrates the unwavering commitment of Customs and Border Protection agriculture specialists in safeguarding America’s agriculture by tirelessly inspecting travelers and goods arriving to the United States every day,” said Casey Owen Durst, CBP’s Field Operations Director in Baltimore.
CBP agriculture specialists have extensive training and experience in the biological sciences and agricultural inspection. Learn more about how CBP protects our nation’s agriculture.
On a typical day nationally, CBP agriculture specialists interdicts 4,638 prohibited meat, plant materials or animal products, and intercepts 352 agriculture pests and diseases. Learn more about what CBP achieves in “Typical Day.”
CBP’s Office of Field Operations
Almost a million times each day, CBP welcomes international travelers into the U.S. In screening both foreign visitors and returning U.S. citizens, CBP uses a variety of techniques to intercept narcotics, unreported currency, weapons, prohibited agriculture, and other illicit products, and to assure that global tourism remains safe and strong.
CBP's border security mission is led at 328 international ports of entry by CBP officers and agriculture specialists from the Office of Field Operations. Please visit CBP Ports of Entry to learn more about how CBP’s Office of Field Operations secures our nation’s borders.
Travelers are encouraged to visit CBP’s Travel website to learn more about the CBP admissions process and rules governing travel to and from the U.S.
Trade Group, CBP Note Accomplishments - U.S. Customs & Border Protection
Advances in trade, security and technology dominated Wednesday’s quarterly meeting of the Advisory Committee on Commercial Operations or COAC. Hosted by CBP, the event in Miami featured a keynote address by CBP Acting Commissioner Kevin McAleenan.
Established by Congress in 1987, the 20-member committee advises the secretaries of the Departments of the Treasury and Homeland Security on their commercial operations as well as CBP’s own commercial operations.
Acting Commissioner McAleenan used the occasion to highlight CBP’s improved enforcement authority under the COAC-supported 2015 Trade Facilitation and Enforcement Act. This year also marked the law’s two-year anniversary.
“As you know, this legislation created over 100 new mandates and requirements and in many ways reshaped the interaction between CBP and the trade community,” he said. The act protects the economy through tougher trade enforcement and more engagement with the private sector. It also streamlines and automates import and export procedures.
“CBP has made significant progress in enhancing our enforcement efforts,” said the Acting Commissioner, pointing out that the agency has “aligned operations with today’s complex trade environment.”
The COAC subcommittees provided recommendations to improve automation, along with better ways for CBP to collect revenue, so CBP officers can spend less time collecting payments and more time running their operation. Proposals to improve internet commerce, or e-commerce, were also offered.
A working group gave updates on “block chain,” a technology used by the financial industry to securely share information. The technology enables certificates and licenses to be electronically submitted. Foreign governments generate seals and signatures that must be shown before their goods can enter the country. Without proper protections, those documents risk being manipulated or fraudulently produced.
Measures to protect intellectual property were also outlined. Among them was the Report IP Theft campaign that encourages reporting violations through a newly established toll-free hotline. CBP was urged to work with e-commerce stakeholders to develop an automated online survey for customers who believe their shipments contain phony products. The agency was asked to find better ways to handle “blanks,” cargo that arrives without a logo or trademark.
COAC members represent a wide range of manufacturers, shippers and trade industry associations. Border and supply-chain security, air cargo security, import safety, customs broker regulations, trade enforcement, and revenue modernization, are among the committee’s interests
Commission Orders Formal Investigation in Detention & Demurrage Case - Federal Martime Commission
The Federal Maritime Commission voted to launch an investigation, headed by Commissioner Rebecca Dye, focused on the practices of vessel operating common carriers and marine terminal operators related to detention, demurrage, and per diem charges.
As the designated Investigative Officer, Commissioner Dye will have broad authority to conduct Fact Finding 28, including the power to issue subpoenas, to hold public and non-public sessions, and to require reports. Under this Order, she is charged with making recommendations for Commission action including investigations of prohibited acts; enforcement priorities; policies; rulemaking proceedings; or other actions warranted by the record developed in the proceeding.
Fact Finding 28 stems from a petition (Petition P4-16) filed at the Commission by the Coalition for Fair Port Practices. In January, the Commission held a two day hearing that explored issues raised in the petition by soliciting testimony from shippers, ocean transportation intermediaries, ocean carriers, truckers, and marine terminal operators.
Acting Chairman Michael A. Khouri said "The Coalition raised substantive issues in both their petition and their testimony at our January hearing investigating carrier and terminal detention and demurrage practices. Various alleged practices were described that—without countervailing or explanatory testimony and evidence—would be troubling from my perspective. However; without any filed complaints by cargo stakeholders, where the crucible of adversary proceedings can bring light and transparency to such practices, I supported this investigatory fact finding so as to more fully develop a tested factual record. Commissioner Dye is uniquely qualified to lead Fact Finding 28, particularly given the work she has done to date examining supply chain reliability and resilience. I have every confidence in the work she will do."
A final report of Commissioner Dye’s findings and recommendations is due to the Commission no later than December 2, 2018.
Commissioner Dye commented, "I appreciate the confidence of the Commission and look forward to working with our stakeholders to strengthen the Nation’s freight delivery system and increase American competitiveness."
Commissioner Daniel Maffei stated, "While many questions remain after the hearing, I do believe it effectively established that the practices surrounding detention and demurrage charges can be out-of-date, confusing, inconsistent, and, in my view, often unfair. Today the Commission unanimously takes the first step towards corrective action through a comprehensive Order of Investigation that will bring all the relevant facts to light."
As the Investigative Officer, Commissioner Dye will examine detention, demurrage, and per diem practices generally, but at a minimum, she will evaluate five key issues:
- Whether the alignment of commercial, contractual, and cargo interests enhances or aggravates the ability of cargo to move efficiently through U.S. ports
- When has the carrier or MTO tendered cargo to the shipper and consignee
- What are the billing practices for invoicing demurrage or detention
- What are the practices with respect to delays caused by various outside or intervening events
- What are the practices for resolution of demurrage and detention disputes between carriers and shippers