This blog post covers trade developments occurring during the sixth week of the new Trump Administration. It covers events occurring through 12:00 pm Eastern time on Friday, February 28.
Import-Related Developments
Potential Retaliation for Global Digital Services Taxes
After we published our Week Five in Trade post last week concerning additional sector-specific import tariffs, President Trump on Friday, February 21 signed a memorandum paving the way for the U.S. to retaliate against nations that impose global digital services taxes (“DSTs”) on, or otherwise “discriminate” against, U.S. technology companies. The memo directs the U.S. Trade Representative (“USTR”) to determine whether to renew the Section 301 investigations against France, Austria, Italy, Spain, Turkey, and the United Kingdom, which President Trump initiated in 2019 and 2020 during his first term. The memo further directs the USTR to investigate any additional countries that use a digital tax “to discriminate against U.S. companies,” according to a White House fact sheet.
In addition, the memo directs the Secretary of the Treasury, in consultation with the Secretary of Commerce an USTR, to determine whether any foreign country subjects U.S. citizens or companies to any “discriminatory or extraterritorial taxes,” or has any tax measure in place that otherwise undermines the global competitiveness of United States companies, and directs USTR to “identify tools” the U.S. can use to secure a permanent moratorium on its trading partners levying customs duties on electronic transmissions. Finally, the memo directs the Secretary of the Treasury, the Secretary of Commerce, and USTR to investigate whether any act, policy, or practice of any country in the EU or U.K. “has the effect of requiring or incentivizing the use or development of United States companies’ products or services in ways that undermine freedom of speech and political engagement, or otherwise moderate content,” and to recommend appropriate actions to counter such practices.
President Trump previewed the current action with respect to the retaliatory tariffs last Thursday, saying that he would impose tariffs on goods from Canada and France over their digital service taxes. A White House fact sheet released at the time said each had collected over $500 million annually in DST revenues, with global levies at over $2 billion.
It is likely that any new tariffs would be imposed on top of existing tariffs such as the China-specific Section 301 and IEEPA tariffs as well as Section 232 duties on steel and aluminum, which were recently expanded by the Trump administration.
Trump Administration Announces New Section 232 Investigation on Copper and Copper Products
On Tuesday, February 25th, President Trump issued an Executive Order directing the Commerce Department to launch a Section 232 investigation on copper and copper products, which will look into the effects imports of copper “in all forms,” including copper concentrates, refined copper, copper alloys, scrap copper and copper derivative products, on national security — specifically, as such imports affect domestic copper mining, smelting and refining. The Section 232 investigative process allows for public comment.
The Executive Order directs the Commerce Department to study the current and projected demand for copper in U.S. defense, energy, and critical infrastructure sectors; the extent to which domestic recycling, refining, smelting and mining can meet demand; which countries are major exporters of these goods to the U.S. (as well as the risks of U.S. copper imports being concentrated in the hands of a small number of suppliers); the impact of foreign government subsidies, overcapacity, and predatory trade practices on United States industry competitiveness; the feasibility of increasing domestic copper production to reduce reliance on imports; the economic impact of dumping and state-sponsored overproduction; and the potential for “foreign nations to weaponize their control over refined copper supplies.”
The Order requires Commerce to submit a report within 270 days outlining its findings as to whether U.S. dependence on copper imports threatens national security, as well as recommendations for mitigating any such threats, such as potential tariffs, export controls, or incentives to increase domestic copper production.
USTR Proposes Remedies of $1,000,000 or more for Vessel Docking Fees at US Ports Pursuant to a Section 301 Investigation
On Tuesday, February 25, 2025, the United States Trade Representative (“USTR”) announced that it is considering charging fees ranging from $500,000 to $1.5 million every time a vessel docks at a U.S. port. The highest range of fees are expected to be charged when Chinese flag vessels enter U.S. ports. USTR clarified that the higher docking fees would not be limited to Chinese vessels alone but also Korean or Japanese-built ships as well if more than 50% of their fleet were accounted for by Chinese-built ships. USTR stated that the shipping companies could obtain refunds if they serviced U.S. ports with U.S. built ships. It is still not clear whether these docking fees will be cumulative or if only the highest possible rate would be charged individually.
The underlying Section 301 investigation was initiated during the Biden Administration after a request from the U.S. shipbuilding and metal unions. USTR concluded its investigation and found that China is currently dominating the shipping and logistics industry and has gone from 5% of global tonnage shipped in 1999 to more than 50% in 2023. Furthermore, according to the report, Chinese companies own 19% of the worldwide commercial fleet and USTR determined that dependence on Chinese owned ships is risky for U.S. commerce. China is well known to offer significant subsidies to its shipbuilding industry which has been an increasing concern to the United States and its allies over several years.
USTR will hold a public hearing on the proposed actions on March 24, 2025, and the deadline to request to appear at the hearing is March 10, 2025. Interested parties may submit comments on these proposed fees which are due on March 24, 2025, and may be submitted via the USTR comments portal at https://comments.ustr.gov/s/. As part of the comments, USTR has asked commenters to provide input as to “whether the proposed fees or restrictions on services are appropriate, including the type of services to be subject to fees or restrictions, the level of fees or restrictions, the structure of any fees, restrictions, or reimbursement of fees on services. In commenting on proposed actions, USTR requests that commenters specifically address whether a proposed action would be practicable or effective to obtain the elimination of China’s acts, policies, and practices.”
Customs Provides Updated Guidance on Additional Duties Imposed at the Time of Entry on Imports from China and Hong Kong
In conjunction with the new IEEPA tariffs announced by the White House on February 1, 2025, on imports of goods from China and Hong Kong, Customs issued updated guidance on the processes and procedures for the posting of the additional duties.
CSMS Message # 64235342, issued on Wednesday, February 26, 2025, updated CBP’s earlier guidance in CSMS #63988468 and CSMS #64018403. In its February 26, 2025, guidance, CBP has explicitly stated that it will reject entry summaries that do not comply with the February 1, 2025, Executive Order and that these rejections will not be limited only to entries without the required additional duties. CBP is clear that if the rejected entry is not resubmitted within two days that the importer of record may be subject to liquidated damages. The same message instructs imports to ensure that each line item on an entry be associated with the correct HTS number and the 10% IEEPA tariffs must be linked to that line item and not combined with the duty reported on a different HTS within the entry summary line.
We recommend that importers carefully review the CSMS messages linked above to ensure compliance and also to coordinate with their brokers and entry filers to ensure compliance.
Export-Related Developments
Trump Administration Announces Intent to Revoke Chevron OFAC License for Venezuela and Possibly Other Venezuela Oil and Gas Licenses
On Wednesday, February 26, 2025, President Trump posted the following on Truth Social:
We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro, of Venezuela, on the oil transaction agreement, dated November 26, 2022, and also having to do with Electoral conditions within Venezuela, which have not been met by the Maduro regime. Additionally, the regime has not been transporting the violent criminals that they sent into our Country (the Good Ole’ U.S.A.) back to Venezuela at the rapid pace that they had agreed to. I am therefore ordering that the ineffective and unmet Biden “Concession Agreement” be terminated as of the March 1st option to renew. Thank you for your attention to this matter!
Following this post, U.S. Secretary of State Marco Rubio posted his own statement on X stating, “Today, pursuant to @POTUS directive, I am providing foreign policy guidance to terminate all Biden-era oil and gas licenses that have shamefully bankrolled the illegitimate Maduro regime.”
President Trump’s post is presumably a reference to General License No. 41 which the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued under the former Biden Administration on November 26, 2022, in order to authorize Chevron Corporation to conduct certain petroleum transactions in Venezuela with Petróleos de Venezuela, S.A. (“PDVSA”) which would have otherwise been prohibited by OFAC sanctions.
General License No. 41 features an autorenewal clause which automatically renews the license on the first day of each month. As a result, at a minimum, it appears that OFAC will terminate or revoke General License No. 41 effective March 1, 2025. It is unclear whether OFAC might issue a limited wind-down license to authorize Chevron to conclude agreements entered into under General License No. 41. Additionally, Secretary Rubio’s post suggests that OFAC could potentially take further action to terminate other OFAC licenses related to Venezuela in addition to General License No. 41. OFAC has not yet provided any official comment on this matter.
Other Developments
New NSPM Calls for Changes to CFIUS Process and Outbound Investment Rules
On Friday, February 21, 2025, President Trump issued a National Security Presidential Memorandum (“NSPM”) which directed the Treasury Department and other cabinet agencies to implement various changes to the Committee on Foreign Investment in the United States (“CFIUS”) process for reviewing foreign investments in the United States with the potential to harm United States national security. Among other things, the NSPM called for the creation of a new “fast track” process which would expedite reviews for foreign investors who agree to avoid partnering with the People’s Republic of China and other designated foreign adversaries and also vowed to use the CFIUS process to protect United States farmland. The NSPM also forecasted that the Trump Administration will act to adopt further restrictions to prevent United States persons from investing in sectors of the PRC which could raise national security concerns. The NSPM did not establish any required timeline for the implementation of these rules; it is also unclear whether the Trump Administration is capable of enacting the full slate of proposed rules using Executive Branch action alone. Husch Blackwell’s International Trade Insights blog discussed the NSPM in greater detail in this blog post.
The Husch Blackwell International Trade team is monitoring developments closely and will report back with further details, including analysis of any substantive announcements made, as they emerge.