USTR working to end the Boeing-Airbus dispute and tariffs.
US Trade Representative Katherine Tai says she is committed to ending the longstanding dispute over illegal subsidies to the dominant manufacturers of large aircraft. The dispute triggered an exchange of tariffs actions between the US and the EU. In October of 2019, the US levied additional tariffs on $7.5 billion of exports from the EU and a year later the EU hit back with tariffs on $4 billion of US goods.
In her confirmation hearings, Ms. Tai had stated that settling this dispute would be a priority for her office. She said this week that she is hopeful the EU will join her in ending the dispute so, “we can prove to ourselves and to the rest of the world that we can move on, because we have to.” The two sides had already agreed to a four month tariff reprieve to give themselves a chance to resolve tensions and come to a settlement.
The US tariffs affected agricultural products including wine and spirits, and some luxury items from the EU which, at the time, included the UK. The tariffs levied by the EU hit tractors, whiskey, and agricultural products from the US. Bourbon producers in particular have claimed that the tariffs put them at a distinct price disadvantage.
Both tariff actions included some aircraft and aircraft parts.
China Tariff Exclusions are becoming a thing of the past.
The last of the planned exclusion sets for China origin goods expired on April 18th. This exclusion set, granted under provisional number 9903.88.07, had been extended once but like the previous exclusion sets it was not considered for a second extension. This leaves only a limited number of COVID relief related products with a way around the tariffs and those exclusions are set to expire on Sept 30, 2021.
Last year the USTR stopped offering comment periods that allowed companies to apply for exclusion extensions. While some business groups and members of Congress have been asking the Biden administration to reinstate the exclusion process, there is no indication that it is being considered. Should it be considered there is hope the USTR would not go back with the limited exclusions that shut so many importers out of the tariff relief while benefitting the applicant. There were over two thousand Section 301 exclusions granted since the tariffs were implemented and a very small minority of those were granted at the tariff number level.
Section 301 related litigation filed with the US Court of International Trade continues to move through the legal process. The case challenges the legality of the tariffs on China origin goods which were implemented on Rounds 3 and 4A. The combined rounds affect products valued at more $300 billion and, as noted above, the exclusions to these tariffs have expired. Importers can still preserve their rights to possible refunds by joining the litigation.
CBP Increases Enforcement Efforts
If you think Customs is getting tougher on importers, the statistics from FY2020 can confirm your suspicions. Statistics recently made public by Customs show that they conducted more audits, issued more penalties, and seized more imports in FY2020 than in FY2019. Increased activity included 19% more audits, nearly 10% more penalties, and almost 18% more trade seizures. There were 116% more withhold release orders (WRO) resulting in 2600% more WRO-related detentions. Forced labor concerns drove the increase in WRO activity and the these detentions could continue to grow in the new year. Seizures resulting from IPR concerns were actually lower in 2020, but import safety seizures and the value associated with them also rose.
Director of Compliance & Customs Services
Need a refresher on tariff rounds and exclusions?
CVI has a free, complete guide to EVERYTHING you need to know for tariff rounds and exclusions, including:
- HTS Code
- Publish Dates
- Exclusion provision number per set list and round
- Effective & Extended Expiration Dates
The CVI Exclusion Guide 2020 provides you with a link to original USTR exclusion announcements with a breakdown of each excluded product.
Please let us know if you have any questions. We will be regularly updating this document via our website. Check it out here!
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Meet one of CVI’s Customs Brokerage & Compliance experts, Sam McClure:
Sam serves as Director, Compliance and Customs Services for CVI. He serves as CVI’s corporate compliance officer and is responsible for overseeing all aspects of our Customs related services, including growth.
Sam started his career in 1977 with Waters Shipping Company in Charlotte, NC. He began as a document runner, soon becoming a leader in operations and customer service for the branch. Sam, along with Linda Masten, founded Central Carolina Shipping Inc. in 1983 as an independent Customs Brokerage firm where he served as Vice President for 26 years. Sam and Linda grew Central Carolina into a successful and highly respected member of the Carolinas trade community. When Charlotte opened their local chapter of the IFFCBA Sam was part of the organizing group and he headed the Customs committee for several years. Sam obtained his Customs Brokers License in 1984 and remained with Central Carolina until the company was acquired by CVI in 2009.
At CVI, Sam has held several positions in both the operations and sales departments. As an expert in U.S. Customs regulations, Sam is often called upon on to provide guidance to importers on Customs compliance issues. He makes regular presentations on matters related to importation and broader regulatory compliance.
– Sam McClure, LCB, Director of Compliance & Customs Services, CVI
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