Customs duty

Swiss computer peripheral and software company Logitech won its tariff classification challenge in the Court of International Trade, getting duty-free treatment for its webcams and ConferenceCams, per an Aug. 24 decision. Senior Judge Leo Gordon ruled that the webcams fit under Harmonized Tariff Schedule heading 8517, as argued by Logitech, as opposed to heading 8525, dutiable at 2.1%, as suggested by the government. Finding that the products in dispute fall under both headings, Gordon said the duty-free heading describes the goods “with a greater degree of accuracy and certainty.”

OtterBox's victory in a Court of International Trade case setting a lower duty rate in a customs challenge on smartphone covers cannot be extended to a prior disclosure made by OtterBox, CIT said in an Aug. 18 opinion. Judge Claire Kelly ruled that the court did not have the jurisdiction to make the determination that entries not part of the Summons of the case should be reliquidated.

The Office of the U.S. Trade Representatively should allow for goods that were subject to Section 301 tariffs at the time of entry to a foreign-trade zone to be tariffed at whatever rate is in effect when the goods are removed from the FTZ, the National Associations of Foreign-Trade Zones said in a recent letter to the USTR. The trade group offered support for the suspension on Section 301 duties that were related to digital services taxes, and said that "the notices confirm the application of Sec. 301 duty rates in effect at the time of Customs entry for subject merchandise admitted into a U.S. foreign-trade zone (FTZ) in mandated privileged-foreign (PF) status."

Section 301 sample case plaintiffs HMTX Industries and Jasco Products “persuasively argue” that the Office of the U.S. Trade Representative “clearly exceeded its authority” under the 1974 Trade Act when it imposed the “massive” lists 3 and 4A tariffs on “virtually all imports” from China “without connecting them to the underlying investigation of China’s trade practices,” said the Consumer Technology Association, the National Retail Federation and five other trade groups Aug. 9 in an amicus brief in docket 1:21-cv-52 at the U.S. Court of International Trade.

The U.S. is seeking more than $18 million from importer Crown Cork & Seal in a July 28 complaint filed in the Court of International Trade alleging that the company fraudulently misclassified its metal lid imports to skirt a 2.6% duty rate. The goods -- metal lids for food, beverage, household and consumer products -- are properly classified under Harmonized Tariff Schedule subheading 8309.90.0000 and are dutiable at that 2.6% rate, the Department of Justice said. Instead, CCS attempted to classify its metal lid imports from Europe between 2004 and 2009 under HTS subheading 7326.90.1000, which has duty-free treatment (United States v. Crown Cork & Seal, USA, Inc. et al., CIT #21-361).

The shift from NAFTA to USMCA has been taxing for vehicle manufacturing sector companies, panelists on a KPMG seminar said about the trade deal, one year in. But for Georgia-Pacific, compliance is simpler after the rewrite. Myesha Cottom, director of international trade at Georgia-Pacific, said that getting rid of the template for NAFTA goods and going to minimum data elements means less administrative burden. "I’m optimistic that the administrative burden will continue to decrease," she said during the July 28 webinar.

A panel of CBP officials told members of the trade community that they're still considering how to shape a rulemaking based on what they've learned from the Entry Type 86 test and the Section 321 data pilot, but they expect to require 10-digit Harmonized Tariff Schedule codes on de minimis entries that PGAs have an interest in.

In a report accompanying the spending bill for the Department of Homeland Security, House appropriators said they still want a briefing on its efforts to improve automated cargo processing, including scanning at land ports of entry. The report directs the agency to provide the briefing within 60 days of the spending bill's signing. They also asked for a brief within 60 days on how CBP's two-year-old strategy to interdict opioids is going, and what they will do next. They noted that since 2018, Congress has provided more than $200 million in support of interdiction, including money for international mail and consignment facilities, and that it expects CBP and the U.S. Postal Service to have higher capture rates. They also asked for a report within 120 days on whether duties on imported aluminum are being properly assessed when the aluminum "exempt from certain tariffs" is entering the U.S. The report does not say whether they are concerned that aluminum from countries not covered by Section 232 is being wrongly taxed, or whether parties that have exclusions are not receiving the benefits of the exclusions. A press aide did not respond to questions on this part of the report by press time.

Revisions to the tariff schedule over the past six months echoed the back and forth between the U.S. and the European Union over retaliatory tariffs under both the Airbus and digital services tax disputes. Provisions for new tariffs were added then suspended, some immediately. Other changes include updates for USMCA tariff-rate quotas, a Section 301 exclusion extension and an extension to Section 201 safeguards on large residential washers.

The Commerce Department released a redacted version July 6 of its Section 232 report on the national security implications of U.S. imports of autos and auto parts. The Bureau of Industry and Security posted the report and its appendices, dated Feb. 17, 2019. Then-Commerce Secretary Wilbur Ross suggested two scenarios for tariffs that the Trump administration could impose if USMCA negotiations weren't productive. No tariffs were imposed as a result of the report, but the possibility of tariffs remained a threat for years after.