Husch Blackwell announces its March Trade Law Newsletter on key issues and announcements related to International Trade and Supply Chain.
U.S. Department of Commerce Decisions
On March 29, 2019, the Office of the U.S. Trade Representative (USTR) released the 2019 National Trade Estimate (NTE). The NTE is an annual report on the status of foreign trade and investment barriers to American exports around the world. To view the full version of the report, click here.
| March 2019 | |
| Presidential Actions |
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USTR Announces List 3 Tariffs Will Not Increase to 25% On February 28, 2019, the Office of the U.S. Trade Representative released a federal register notice delaying the increase in Section 301 (List 3) tariffs to 25% on $200 billion of Chinese goods until further notice. The tariff rate on goods covered under List 3 will remain at 10% indefinitely. These tariffs were set to increase from 10% to 25% on March 1, 2019 (see our previous post here). The U.S. and China have been engaged in trade negotiations for several months and the parties are hoping to finalize a trade deal in coming weeks. |
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Trump Administration Charts Trade Policy Course More Favorable to American Workers On March 1, 2019, U.S. Trade Representative Robert Lighthizer delivered President Trump’s Trade Policy Agenda and Annual Report to Congress. In the 373-page report, USTR outlined the President’s first two years of trade policy and laid out future plans to work with Japan, the EU, and UK. To see the USTR published fact sheet, click here. |
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President Trump Announces Intent to Withdraw GSP Status for India and Turkey At the direction of President Trump, the Office of the U.S. Trade Representative (“USTR”) has announced the United States’ intent to withdraw beneficiary status from India and Turkey under the U.S. Generalized System of Preferences (“GSP”) program. The GSP program is a program designed to promote economic growth in developing countries and provides preferential duty-free treatment for over 3,500 products from a wide range of designated beneficiary countries when imported into the United States. In its recent announcement, USTR cited India’s “failure to…provide equitable equitable and reasonable access to its markets in numerous sectors” and indicated Turkey is “sufficiently economically developed” as the reasoning behind the intended removal of beneficiary status. As per the statute, the President notified Congress of this decision on March 4, 2019; however, the termination of GSP treatment will not take effect for at least 60 days and will be enacted by a Presidential Proclamation. |
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Commerce Initiates Section 232 Investigation on Titanium Sponge On March 4, 2019, the U.S. Department of Commerce announced that it would be conducting a Section 232 Investigation on imports of titanium sponge. Commerce Secretary Wilbur Ross stated that the investigation will be looking into whether or not the “quantity or circumstances” of the imports are a threat to national security. In a press release issued by the Department of Commerce, Secretary Ross stated, “Titanium sponge has uses in a wide range of defense applications, from helicopter blades and tank armor to fighter jet airframes and engines.” Commerce must submit its report, along with any recommendations, to the President within 270 days after initiation, which will fall on November 29, 2019. After that date, the President will have 90 days to make his determination. This will be the fifth investigation under the Trump administration pursuant to Section 232 of the Trade Expansion Act of 1962. The administration has launched previous Section 232 investigations concerning steel, aluminum, uranium, and auto parts. To see our previous post on Commerce’s most recent 232 Auto Tariff Report, click here. |
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USTR Requests First-Ever Consultations Under the U.S.-Korea Free Trade Agreement On March 15, 2019, the Office of the U.S. Trade Representative (USTR) requested the first ever consultations with South Korea under the chapter on Competition-Related Matters (Chapter 16) of the United States-Republic of Korea Free Trade Agreement (KORUS). Through these consultations, the United States will attempt to resolve concerns regarding procedures in competition hearings held by the Korea Fair Trade Commission (KFTC). Some of these KFTC hearings have denied U.S. parties certain rights, including the opportunity to review and rebut the evidence against them. |
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CIT Rules Section 232 Tariffs on Steel are Constitutional On March 25, 2019, the Court of International Trade issued its decision in the American Institute for International Steel’s appeal on the institution of Section 232 tariffs on iron and steel products. The CIT found that the Section 232 tariffs were constitutional and thus this decision results in the continuation of these tariffs for the foreseeable future. To see the full blog post, click here. |
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USTR Releases 2019 National Trade Estimate Report On March 29, 2019, the Office of the U.S. Trade Representative (USTR) released the 2019 National Trade Estimate (NTE). The NTE is an annual report on the status of foreign trade and investment barriers to American exports around the world. To view the full version of the report, click here. |
| U.S. Department of Commerce Decisions |
Investigations
Administrative Reviews
Changed Circumstances Reviews
Sunset Reviews
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| U.S. International Trade Commission |
Investigations
Sunset Review Decisions
Section 337 Proceedings
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| U.S. Customs & Border Protection |
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| Court of International Trade: Summary of Decisions |
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On March 4, 2019, the CIT remanded Commerce’s Second Remand Results concerning the agency’s selection of the appropriate surrogate country and sustained Commerce’s value-added tax adjustment. The Plaintiff, collectively known as Jacobi, originally challenged the results from Commerce’s final results in the seventh administrative review of the antidumping duty order on certain activated carbon from China. The Court concluded that Commerce should reconsider the selection of a primary surrogate country and its surrogate value selections. On March 5, 2019, the Court remanded Commerce’s final scope determination for reconsideration for the antidumping and countervailing duty orders on light-walled rectangular pipe and tube from the People’s Republic of China. The CIT concluded that Commerce had incorrectly assumed that plaintiff Carlson’s products met the description of subject merchandise and then proceeded to consider whether the scope contained exclusionary language based on further processing. The CIT then remanded Commerce’s final scope determination. On March 8, 2019, the CIT denied plaintiff SeAH’s motion for reconsideration on the grounds that Commerce exercised its regulatory authority in conducting the differential price analysis in the investigation on welded line pipe from Korea. On March 11, 2019, the CIT denied plaintiff Apple’s motion for summary judgement in the classification case of two different types of iPad cases, leather and plastic, on the grounds that Commerce had classified the plastic case under the correct subheading and that the plaintiff did not have standing to challenge Customs’ classification of the leather case. On March 12, 2019, the CIT remanded Commerce’s remand redetermination following an antidumping duty investigation on certain corrosion-resistant steel products from India. The CIT found that Commerce’s modified calculation of Uttam Galva’s weighted dumping margin was not supported by substantial evidence. On March 21, 2019, the Court sustained Commerce’s determination on remand that Plaintiff Huameng’s sale subject to the new shipper review of fresh garlic from the People’s Republic of China was not bona fide. On March 27, 2019, in the administrative review of the antidumping duty order on hot-rolled steel from the Russian Federation, the CIT sustained Commerce’s final results on the grounds that Plaintiff Severstal was still able to submit all information in a timely manner even though they had initially argued that Commerce had mishandled its April 14 extension request. On March 29, 2019, in the tariff classification case of Plaintiff Quaker Pet’s pet carrier products, the Court granted the plaintiff’s motion for summary judgment on the grounds that the products should have been classified under the HTSUS heading 6307 and not headings 4201 or 4202. Following the ruling, Judge Katzmann ordered that Plaintiff Quaker Pet was to be refunded for any excess duties collected or payments tendered, including interest, to the extend provided by law. |
| Court of Appeals for the Federal Circuit |
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On March 5, 2019, in its final results of an administrative review and a new shipper review of the antidumping duty order on freshwater crawfish tail meat from the People’s Republic of China, the court found the plaintiffs’ arguments to be unpersuasive and ruled in favor of the defendant. The plaintiffs, collectively named “Chinese Respondents”, argued that Commerce’s calculations of the weighted average dumping margins for each respondent were incorrect and “improperly rejected the two Thai financial statements… in favor of [the Oceana Report] in the calculation of surrogate financial ratios.” The Court affirmed the CIT’s finding that Commerce had acted appropriately and used the correct methodology to determine each of the respondent’s weight average dumping margins. On March 12, 2019, in its remand determination, Commerce imposed countervailing and antidumping duties on the importation of a class or kind of merchandise – specifically, solar cells and modules, laminates, and/or panels, containing solar cells imported or sold for importation to the United States from the People’s Republic of China. When defining the scope of the orders, Commerce used a new test, rather than the typically-used “substantial transformation” test to determine the country of origin. Plaintiff Canadian Solar argued that Commerce had failed to provide an explanation for using a different method, however the CAFC concluded that Commerce did provide a reasonable explanation on the grounds that the test they used would include within the scope of the orders the very imports found to injure the domestic industry – solar panels assembled in China using non-Chinese solar cells. Using this new test, Commerce was able to determine that the harm to domestic industry was caused, by Chinese pricing and subsidization of solar panels assembled in China using non-Chinese cells. On March 18, 2019, the CAFC found that the Plaintiffs-Appellants, Jangho and Permasteelisa, have constitutional standing in Commerce’s scope ruling case covering aluminum extrusions from the People’s Republic of China. The government recognized that Jangho and Permasteelisa having participated by invitation as interested parties in Commerce’s proceedings, are authorized by statute to pursue their challenged to Commerce’s scope ruling. In their complaints challenging the March 2014 Commerce Ruling, Jangho and Permasteelisa would be concretely harmed by being subjected to AD & CVD Orders’ duties as a result of the challenged ruling. |
| Export Controls and Sanctions |
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No export control and sanctions updates were published for the month of March. |