Customs duty

Importers must file protests to preserve their ability to obtain refunds under exclusions from Section 301 tariffs, the Court of International Trade said in a June 11 decision. Dismissing a lawsuit from importers ARP Materials and Harrison Steel Castings, Judge Miller Baker found the court did not have jurisdiction to hear their challenge since the importers did not timely file protests of the CBP liquidations assessing the Section 301 duties.

The China package once known as the Endless Frontier Act passed the Senate with 68 votes. The U.S. Innovation and Competition Act includes a trade amendment that authorizes a new Miscellaneous Tariff Bill, restarts applications for Section 301 tariff exclusions, adds an inspector general to the Office of the U.S. Trade Representative, renews the Generalized System of Preferences benefits program for more than five years and directs the CBP to increase inspections of imports with the aim of finding counterfeits. The bill passed the evening of June 8.

According to the White House budget, importers are expected to pay $85 billion in tariffs in the current fiscal year, which ends Sept. 30. But the administration projects that duties collections will fall to $57 billion in fiscal year 2022, and to $45 billion in FY23. Alvaro Ferreira, a consultant to Sandler Travis law firm and an economist by training, said he doesn't know what assumptions the Office of Management and Budget used to make its projections, but he thinks "maybe the administration is thinking: Let’s not take the [Section] 301 tariffs for granted, [in case] there’s an adverse court ruling by the Court of International Trade."

The U.S. Court of Appeals for the Federal Circuit on June 2 upheld a Court of International Trade ruling that S.C. Johnson's Ziploc brand reclosable sandwich bags are classified under Harmonized Tariff Schedule heading 3923 as articles for the conveyance or packing of other goods, dutiable at 3%, as opposed to heading 3924 as plastic household goods, which would be eligible for duty-free Generalized System of Preferences benefits program treatment. Since the bags could fall under either heading 3923 or 3924, heading 3923 is the correct home for the bags since its terms are "more difficult to satisfy and describe the article with a greater degree of accuracy and certainty," the Federal Circuit said.

The Court of International Trade should dismiss the HMTX-Jasco sample case in the massive Section 301 litigation because the companies can’t establish that the Office of the U.S. Trade Representative exceeded its authority, the Department of Justice said in a June 1 motion. The agency didn't overstep the 1974 Trade Act when it ratcheted up the lists 3 and 4A tariffs on Chinese imports, nor did its actions violate the Administrative Procedure Act (APA), the government’s 77-page filing in docket 1:21-cv-52 said.

Every country in the current round of retaliatory tariffs over digital services taxes will have fewer products targeted if negotiations fail to reach a solution, according to detailed lists released for the United Kingdom, Italy, Spain, Turkey, India and Austria. In all cases, as with an earlier list for France, no duties will be collected as negotiations continue. The announcement, made June 2, allows for up to 180 days before a decision has to be made on whether to hike tariffs on these goods by 25%. "Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future," U.S. Trade Representative Katherine Tai said in a press release.

An amendment that will allow expanded information sharing from CBP on counterfeits, and which will renew the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill, will be part of the China package expected to pass the week of June 8. The amendment, sponsored by Finance Committee ranking member Sen. Mike Crapo, R-Idaho, was modified slightly from its first introduction, when it failed to pass the filibuster threshold of 60 votes. This version, which passed with 91 votes on May 27, no longer expands a forced labor initiative on seafood to all seafood products.

The Endless Frontiers legislation continues to attract amendments relevant to trade, such as Sen. Josh Hawley's amendment, published May 24, that would make countries ineligible for participation in the Generalized System of Preferences benefits program if any product from that country is identified by the Bureau of International Labor Affairs as one made with child labor or forced labor. Hawley, R-Mo., also proposes that, starting 90 days after the bill's passage, there will be an additional 100% duty on all goods produced in Xinjiang, or goods with components from Xinjiang, for at least one year. At that time, the tariff would only be lifted if the administration "determines beyond a reasonable doubt that no slave labor, forced labor, indentured labor, or child labor exists in the People’s Republic of China; and submits to Congress and makes available to the public a report on that determination." There have been hundreds of amendments proposed for the China package, and Majority Leader Chuck Schumer will decide which ones deserve floor debate and a vote. He has said he wants a vote to happen this week.

No date has been scheduled yet for a vote on the China package championed by Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Todd Young, R-Ind., but lengthy amendments from senators are continuing to flow in, many with trade implications.

The Court of International Trade ruled that a shipment of 443 bales of secondhand clothing imported by DIS Vintage should be classified as “commingled goods” and subject to the “highest rate of duty for any part thereof,” siding with the government in a May 17 opinion. Judge Timothy Reif, after a government analysis of 41 samples of the subject merchandise, determined that nine weren't classified under Harmonized Tariff Schedule subheading 6309 as “worn clothing and other worn articles” since they had no visible signs of appreciable wear.