USTR Finalizes Action on China Tariffs Following Statutory Four-Year Review - U.S. Trade Representative
WASHINGTON – The Office of the United States Trade Representative (USTR) today (8/13/24) announced final modifications concerning the statutory review of the tariff actions in the Section 301 investigation of the People’s Republic of China’s (PRC) Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.
The proposed modifications announced in May 2024 were largely adopted, with several updates to strengthen the actions to protect American businesses and workers from China’s unfair trade practices following the review of more than 1,100 comments from the public.
“Today’s finalized tariff increases will target the harmful policies and practices of the People’s Republic of China that continue to impact American workers and businesses,” said Ambassador Katherine Tai. “These actions underscore the Biden-Harris Administration’s commitment to standing up for American workers and businesses in the face of unfair trade practices.”
The updates improve the effectiveness of the tariff actions in achieving the objectives of the investigation, while considering other actions that could be taken and the overall effects of the tariff actions on the U.S. economy.
These updates do not reflect further consideration or alteration of the review’s finding that, while the PRC had changed some specific unfair measures, the PRC’s harmful forced technology transfer practices – in particular its cyber theft and industrial espionage – have continued, and in some instances, worsened. The findings of the four-year review can be found on USTR’s website.
The updates in today’s announcement include new timing and rates for tariffs on face masks, medical gloves, needles, and syringes; an exclusion for enteral syringes; a proposal regarding coverage of additional tungsten, wafers, and polysilicon tariff lines; an exclusion for ship-to-shore cranes ordered prior to May 14, 2024; an expansion of the scope of the machinery exclusions process to include five additional tariff lines; and modification of the coverage of proposed exclusions for solar manufacturing equipment.
Information on the revisions to modifications are detailed in USTR’s Federal Register Notice, which is available here.
USTR expects to launch the machinery exclusions process soon, as well as the comment period for proposed modifications of tariff rates on certain tungsten, wafers, and polysilicon tariff lines.
Background
In May 2022, USTR commenced the statutory four-year review process by notifying representatives of domestic industries that benefit from the tariff actions of the possible termination of those actions and of the opportunity for the representatives to request continuation. In September 2022, USTR announced that because requests for continuation were received, the tariff actions had not terminated and USTR would conduct a review of the tariff actions. USTR opened a docket on November 15, 2022, for interested persons to submit comments with respect to a number of considerations concerning the review. USTR received nearly 1,500 comments.
As part of the statutory review process, throughout 2023 and early 2024, USTR and the Section 301 Committee, a subordinate, staff-level body of the USTR-led, interagency Trade Policy Staff Committee (TPSC), held numerous meetings with agency experts concerning the review and the comments received.
Specifically, the Report concludes:
The Section 301 actions have reduced some of the exposure of U.S. persons and businesses to these technology transfer-related acts, policies, and practices.
The PRC has not eliminated many of its technology transfer-related acts, policies, and practices, which continue to impose a burden or restriction on U.S. commerce. Instead of pursuing fundamental reform, the PRC has persisted, and in some cases become more aggressive, including through cyber intrusions and cybertheft, in its attempts to acquire and absorb foreign technology, which further burden or restrict U.S. commerce.
Economic analyses generally find that tariffs (primarily PRC retaliation) have had small negative effects on U.S. aggregate economic welfare, positive impacts on U.S. production in the 10 sectors most directly affected by the tariffs, and minimal impacts on economy-wide prices and employment.
Negative effects on the United States are particularly associated with retaliatory tariffs that the PRC has applied to U.S. exports.
Critically, these analyses examine the tariff actions as isolated policy measures without reference to the policy landscape that may be reinforcing or undermining the effects of the tariffs.
Economic analyses, including the principal U.S. Government analysis published by the U.S. International Trade Commission, generally find that the Section 301 tariffs have contributed to reducing U.S. imports of goods from the PRC and increasing imports from alternate sources, including U.S. allies and partners, thereby potentially supporting U.S. supply chain diversification and resilience.
USTR announced proposed modifications on May 28, 2024, and sought public comment. USTR received more than 1,100 comments.
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CSMS # 62269186 - Foreign Trade Zone Benefit for Customs Trade Partnership Against Terrorism Trade Compliance Partners - USBP
U.S. Customs and Border Protection (CBP) has implemented a new benefit for Customs Trade Partnership Against Terrorism (CTPAT) Trade Compliance partners.
Subject to the conditions further described below, U.S. Customs and Border Protection (CBP) has determined that importers who are CTPAT Trade Compliance partners, in good standing, may utilize a Foreign Trade Zone (FTZ) for the storage of goods subject to potential forced labor enforcement action.
In order for importers who are CTPAT Trade Compliance partners to utilize these benefits, they must identify to CBP which FTZ Operator they will use to store these goods and receive Port Director approval prior to the movement of the goods. The FTZ Operator must have an active Type 4 bond, FIRMS Code, and be in compliance with all CBP regulations. The selection of an FTZ Operator by a CTPAT Trade Compliance partner for this purpose is subject to Port Director approval.
Importers that are not CTPAT Trade Compliance partners are not authorized to utilize an FTZ for the storage of goods detained for forced labor. Such importers may only store detained forced labor goods in bonded warehouses using a Type 21 entry.
All importers that are CTPAT Trade Compliance partners and have shipments detained for forced labor which are currently stored in an FTZ may continue to store such shipments in the FTZ if the importer files a formal 06 entry to include all data elements for the suspected goods.
As entities are added to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, any goods that are impacted but are stored in an FTZ at the time of such addition may continue to remain in the FTZ only if the importer files an 06 estimated weekly entry containing all line-item data elements as required for the transaction. Such filings enable CBP to properly evaluate the merchandise being presented for entry.
Goods detained by CBP for forced labor and stored in an FTZ by CTPAT Trade Compliance partners are subject to the following conditions:
• Applicability Reviews for shipments stored in FTZs:
o Centers shall not conduct formal admissibility reviews prior to the filing of formal entries and issuance of detention notices on these formal entries.
• Notifications:
o CTPAT Trade Compliance partners must notify the Port Director, the
o CTPAT Trade Compliance Branch, and the Center of Excellence and Expertise Director when utilizing this option.
o The partner must receive Port Director approval prior to moving cargo.
• ACE Instructions
o The line(s) in question on the estimated weekly entry will be marked as detained by the port issuing the CBP Form(s) 6051D.
o All other lines on the estimated weekly entry will remain on the entry unedited.
o Please note that this estimated weekly entry will not receive a CBP release while any goods on the transaction are detained.
o The filer will need to submit an additional estimated weekly entry for all remaining lines, as this additional estimated weekly entry serves as authorization to withdraw the goods from the FTZ.
• Storage of the goods undergoing a determination in the FTZ
o The detained goods must be directly identified and not fungible.
o The detained goods may not be manipulated, sold, broken up, repacked, nor distributed.
o The detained goods must be physically segregated from other merchandise.
o The detained goods must be physically identified to indicate to the FTZ Operator’s employees and CBP that those goods cannot and will not be entered into the United States for consumption or removed from the FTZ.
o One of the following processes must be utilized to physically identify the goods:
CBP 239 Warning Labels must be adhered to the identified cargo at the zone site by CBP personnel; or,
Subject to the CBP Port Director’s approval, copies of the issued CBP Form 6051D must be adhered to the identified cargo by the FTZ Operator.
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Notice of Modification: China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property and Innovation - U.S. Trade Representative
AGENCY: Office of the United States Trade Representative (USTR).
ACTION: Notice of modification of actions
SUMMARY: In connection with the Four-Year Review of actions taken in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation, and in accordance with the specific direction of the President, the U.S. Trade Representative has determined to: modify the actions being taken in the investigation by imposing additional Section 301 duties or increasing the rate of existing Section 301 duties, on certain products of China in strategic sectors; propose increasing tariff rates for certain tungsten products, wafers, and polysilicon, with a public comment process to be set out via separate notice; provide a list of subheadings eligible for consideration of temporary exclusion under an exclusion process for certain machinery used in domestic manufacturing; and modify the actions to temporarily exclude from Section 301 duties certain solar manufacturing equipment.
DATES: Tariff increases in 2024 are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after September 27, 2024. Tariff increases in 2025 and 2026 are applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after January 1 of the corresponding year. Exclusions for solar equipment included in Annex B are retroactive and applicable with respect to products that are entered for consumption, or withdrawn from warehouse for consumption, on or after January 1, 2024, and through May
31, 2025.
SUPPLEMENTARY INFORMATION:
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Pasta From Italy: Final Results of Antidumping Duty Changed Circumstances Review
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Hydrodermabrasion Systems and Components Thereof II; Correction; Notice of Institution of Investigation; Correction
• Investigations; Determinations, Modifications, and Rulings, etc.: Components for Certain Environmentally-Protected LCD Digital Displays and Products Containing the Same; Notice of a Commission Determination To Grant a Joint Motion To Terminate the Investigation on the Basis of Settlement; Termination of the Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Preliminary Results of Antidumping Duty Administrative Review and Rescission of Administrative Review, in Part; 2022-2023
• Circular Welded Carbon-Quality Steel Pipe From the United Arab Emirates: Final Results of Antidumping Duty Changed Circumstances Review
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Barium Chloride From the People's Republic of China and India: Initiation and Preliminary Results of Changed Circumstances Review and Intent To Revoke the Antidumping Duty and Countervailing Duty Orders
• Wood Mouldings and Millwork Products From the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review; 2022-2023
• Ferrosilicon From the Russian Federation: Final Affirmative Countervailing Duty Determination and Final Affirmative Determination of Critical Circumstances
• Sales at Less Than Fair Value; Determinations, Investigations, etc.: Ferrosilicon From the Russian Federation: Final Affirmative Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances
• Investigations; Determinations, Modifications, and Rulings, etc.: Glycine From China, India, Japan, and Thailand; Scheduling of Expedited Five-Year Reviews
• Paper Plates From China, Thailand, and Vietnam; Scheduling of the Final Phase of Countervailing Duty and Antidumping Duty Investigations
• Sales at Less Than Fair Value; Determinations, Investigations, etc.: Ceramic Tile From India: Postponement of Preliminary Determination in the Less-Than-Fair-Value Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Hydrofluorocarbon Blends From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2022-2023
• Initiation of Antidumping and Countervailing Duty Administrative Reviews
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DHS Workforce on the Frontlines of Biden-Harris Administration’s New Executive Actions to Address Surge in De Minimis Shipments and Protect American Consumers, Workers, and Businesses - DHS
WASHINGTON – The Department of Homeland Security’s workforce, particularly U.S. Customs and Border Protection (CBP), is on the front lines of the Biden-Harris Administration’s new executive actions, announced today, to protect American consumers, workers, retailers, importers, and manufacturers by tackling the exponential growth of small packages claiming the de minimis exemption. CBP plays a vital role in implementing these Executive Actions by targeting and blocking shipments that violate U.S. laws as they arrive in airports, express consignment facilities, international mail facilities, and ports of entry across the country. CBP enforces trade laws to protect consumers, eradicate forced labor from supply chains and protect U.S. workers and businesses from unfair competition, ensure national economic security, and prevent dangerous and illicit products, including illicit opioids like fentanyl, from entering the United States.
The Executive Actions announced today (9/13/24) are designed to combat a significant increase of shipments in recent years that claim the de minimis exemption, particularly from Chinese e-commerce platforms, by strengthening information collection requirements to improve accountability and enforcement, prevent the misuse of the exemption for allowing high-volume shipments of de minimis packages, and prevent shippers from circumventing safety standards. De minimis shipments, also referred to as Section 321 low-value shipments, refer to goods that are exempt from duty and tax under 19 U.S.C. § 1321(a)(2)(C) and 19 C.F.R. § 10.151. The de minimis exemption allows CBP to pass free of duty and tax, merchandise imported by one person on one day that has an aggregate fair retail value in the country of shipments of $800 or less. Every day CBP processes nearly four million de minimis shipments entering the United States. Although these packages have a low value, they may pose the same potential health, consumer safety, and economic security risks as larger and more traditional containerized shipments. As of July 30, 2024, 89 percent of all seizures in the cargo environment this fiscal year originated as de minimis shipments, including 97 percent of narcotics seizures, and 72 percent of health and safety seizures of prohibited items.
“The actions announced today by the Biden-Harris Administration will help the Department keep pace with global electronic commerce and improve our ability to protect communities from fentanyl and its precursor chemicals,” said Secretary of Homeland Security Alejandro N. Mayorkas. “Our Administration remains ready and eager to work with Congress to pass badly-needed, long-overdue comprehensive de minimis reform legislation and ensure border officials have the resources and tools they need to track and target the millions of small-dollar shipments that enter our country every day.”
“Today’s actions will give us strong tools to ensure that imported goods comply with U.S. laws that serve to protect Americans,” said Robert Silvers, DHS Under Secretary for Policy and Chair of the federal Forced Labor Enforcement Task Force. “We will leave no stone unturned in keeping fentanyl out of this country. We will not tolerate forced labor in our supply chains. With regulatory and statutory updates to modernize its enforcement mechanisms, CBP will have the instruments it needs to keep illicit goods out of our markets, while facilitating the legitimate trade that is the lifeblood of our economy.”
“CBP employs a multilayered enforcement strategy, but the fact remains we are operating under the constraints of outdated laws passed more than 30 years ago, with significant resource and enforcement limitations in a heightened threat environment,” said CBP Senior Official Performing the Duties of the Commissioner, Troy Miller. “These executive actions are a critical first step in modernizing our enforcement mechanisms in the small package environment so we can better protect the health and safety of Americans. However, we still need to modernize and enhance our trade laws so that CBP can implement a more strenuous enforcement architecture to further crack down on the individuals and networks attempting to abuse the de minimis environment.”
The new Executive Actions targeting the abuse of the de minimis exception and protecting U.S. consumers, workers and businesses include:
• New Rulemaking to Improve Accountability and Enforcement in De Minimis Shipments: Specifically, this proposed rule would strengthen information collection requirements to promote greater visibility into de minimis shipments. That additional level of transparency would help CBP protect consumers from purchasing goods that do not meet health and safety standards, and protect U.S. workers and businesses—including retailers, importers and manufacturers—from unfair competition.
• New Rulemaking to Reduce De Minimis Volume and Strengthen Trade Enforcement: Specifically, this proposed rule would make ineligible for the de minimis exemption shipments containing products subject to U.S. trade enforcement actions, such as those driving the increase from China-founded e-commerce platforms like low-value textiles and apparel, closing a major loophole. Those products would no longer enter the U.S. market duty free.
• Final Rule to Prevent De Minimis Shipments from Circumventing Safety Standards: Specifically, this Consumer Product Safety Commission (CPSC) proposed final rule would require importers of consumer products to file Certificates of Compliance (CoC) electronically with CBP and CPSC. That would strengthen CBP’s and CPSC’s ability to target and block unsafe products, and prevent foreign companies from abusing the de minimis exemption to circumvent consumer protection testing and certification requirements.
These Executive Actions will be carried out through the federal regulatory process in the coming weeks and months. For the full White House fact sheet, visit: FACT SHEET: Biden-Harris Administration Announces New Actions to Protect American Consumers, Workers, and Businesses by Cracking Down on De Minimis Shipments with Unsafe, Unfairly Traded Products
The Administration is also ready to work with Congress to pass comprehensive de minimis reform legislation by the end of the year, which is urgently needed even as these regulatory processes move forward. Key reforms Congress should advance include:
• Exclusion from de minimis of import-sensitive products.
• Exclusion of shipments containing products from the de minimis exemption that are covered by Section 301, Section 201, or Section 232 trade enforcement actions.
• Passage of previously proposed de minimis reforms in the Detect and Defeat Counter-Fentanyl Proposal.
o These proposed legislative reforms would, among other actions, increase transparency and accountability under the de minimis program by requiring more data from shippers, including the product tariff number, and give border officials the tools they need to more effectively track and target the millions of shipments coming in claiming the de minimis exemption. The Detect and Defeat Counter-Fentanyl proposal incorporates many of the bipartisan ideas put forward by Members of Congress, and will increase CBP’s ability to detect and seize illicit drugs and their precursor chemicals, as well as the machinery used to make counterfeit pills, and hold drug traffickers accountable.
o CBP would be granted the authority to demand additional documentation and other information about de minimis packages. The change would enable customs officials to more effectively analyze risk, identify patterns of concern, and take action against those who try to abuse our system. The legislation would also add a user fee for de minimis packages to help pay for the staff and equipment needed to better identify, and seize, illicit fentanyl being shipped in small packages into our country.
o The Detect and Defeat Counter-Fentanyl Proposal would also result in stronger penalties that will more effectively deter synthetic drug and precursor trafficking in the de minimis environment and incentivize the private sector to self-police their supply chains for narcotics risk.
DHS is continuing to build on recent successes to strengthen enforcement of U.S. textile and apparel trade laws to support U.S. textile manufacturers and workers, and continues to prioritize eliminating forced labor from U.S. supply chains, including through the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA). In April, DHS outlined an enhanced strategy to combat illicit trade and level the playing field for the American textile industry, led by CBP and Homeland Security Investigations (HSI). In Fiscal Year 2024 through September 1, CBP has:
• Launched 18 Trade Special Operations (TSOs) that focus on physical inspection of small shipments and cargo containing textile and apparel products, as well as post-release reviews to determine eligibility for preferential treatment under free trade agreements, verify classification, valuation, and right to make entry.
• Initiated over 553 full USMCA and CAFTA-DR, classification, valuation and right to make entry summary verifications on more than $150.8 million in textile and wearing apparel trade.
• Initiated trade audits on more than $22.6 billion in textile imports.
• Doubled the number of Textile Production Verification Team (TPVT) visits in comparison to FY23, reaching 109 factories and 6 raw material providers.
• In July, the interagency Forced Labor Enforcement Task Force (FLETF), with DHS as Chair, added 26 entities in the high-priority textile sector to the UFLPA Entity List, which will restrict imports of goods from these entities into the United States. DHS and the FLETF will continue to prioritize examination of entities in the textile and apparel sector for possible addition to the UFLPA Entity List, which currently includes 73 entities across a wide range of industry sectors.
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United States Files Suit For Unpaid Duties and Penalties For Alleged Transshipment of Chinese Aluminum Wire - Department of Justice
The United States has filed a civil lawsuit against Repwire LLC, a Florida Corporation that imports wire and cables. The lawsuit alleges that Repwire made false statements to customs officials in importing aluminum wire into the United States. The lawsuit also names as defendants Repwire’s manager, Jose Pigna, and insurer, American Alternative Insurance Corporation.
The United States’ complaint contends that Repwire, through gross negligence or negligence, misrepresented to U.S. Customs and Border Protection (CBP) the imported wire’s classification code and country of origin. Repwire allegedly falsely classified the imported wire from China as aluminum wire with connectors instead of wire without connectors, and after import duties on the former were subsequently raised, Repwire allegedly then falsely identified the country of origin for various entries of its merchandise as Singapore or Korea. Both of these alleged misrepresentations resulted in Repwire failing to pay the appropriate amount of duties owed on its merchandise.
“The Justice Department is committed to pursuing individuals and companies who evade customs duties or otherwise engage in unfair trade practices that harm U.S. manufacturers,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to employ all of our tools to ensure that U.S. manufacturers are competing on a level playing field.”
“CBP takes its trade mission of protecting the U.S. economy very seriously as we strive to maintain fair trade and preserve American jobs from predatory practices,” said Executive Director Susan Thomas of Cargo and Conveyance Security, Office of Field Operations, CBP. “These civil penalties should serve as a warning to those who attempt to do harm to our economy and American businesses.”
The complaint alleges that Repwire, acting through Pigna, avoided various duties owed on the imported wire, including Section 301 duties, which are owed on certain Chinese merchandise, including aluminum wires without connectors, and anti-dumping and countervailing duties associated with Chinese aluminum wire. Antidumping and countervailing duties are trade remedies that help protect domestic industries from unfair trade practices by foreign businesses and countries, such as government subsidies or below market sales.
The complaint seeks the recovery of over $11 million in import duties and up to $62 million in civil penalties.
CBP’s Electronics Center of Excellence and Expertise and Homeland Security Investigations (HSI) Miami investigated the case. CBP and HSI are the agencies responsible for enforcing U.S. laws related to the importation of merchandise into the United States, including the collection of duties and assessment of penalties.
Trial Counsel Daniel Hoffman of the Civil Division’s Commercial Litigation Branch, National Courts Section, handled the case.
The case, which is filed in the Court of International Trade, is captioned United States v. Repwire LLC, and Jose Pigna, and American Alternative Insurance Corporation, No. 24-00173.
To combat trade fraud, including avoidance of import duties, the Justice Department created a Trade Fraud Task Force. The Task Force partners with CBP and other law enforcement agencies to ensure compliance with United States trade laws.
The claims in the complaint are allegations only, and there has been no determination of liability.
Complaint