On Friday, July 6, 2018, the Office of the U.S. Trade Representative (USTR) announced a process for obtaining product exclusions from the 25% tariffs imposed on certain products imported from China. The tariffs went into effect on July 6, 2018.
USTR has set the following deadlines:
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WHEN? On June 6, 2018, the Federal Maritime Commission took steps to simplify freight pricing requirements for Non-vessel Operating Common Carriers (“NVOCCs”) by “approving” changes to Negotiated Rate Arrangements (NRAs) and NVOCC Service Arrangements (NSAs). While many NVOCCs are still utilizing the fast disappearing tariff publication methods of meeting the regulatory shipping requirements, it is our opinion that the contemplated changes to NRAs and NSAs will win over the NVOCC community to their almost exclusive usage. While the “Final Rules” were approved, it was clear from the FMC meeting, that the written provisions were still at a drafting stage. In discussions with senior FMC staff, it is our understanding that the so-called “Final Rules” will be going to the Federal Register later this week. By law they are required to be posted on the Federal Register for 30 days before becoming effective. Therefore, a good bet would be that these rules will be effective sometime in the first week of August, 2018.
On June 27, 2018, the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) officially revoked General Licenses H and I. General License H previously allowed foreign owned or controlled subsidiaries of U.S. companies to engage in limited transactions with Iran that would have otherwise been prohibited under the Iranian Transactions and Sanctions Regulations (the “ITSR”). General License I previously allowed U.S. persons to negotiate and enter into contingent contracts for exports and reexports to Iran of commercial passenger aircraft and related parts and services that were eligible to potentially receive specific licenses under the Iran Nuclear Deal, otherwise known as the Joint Comprehensive Plan of Action (the “JCPOA”). OFAC previously advised that these revocations would be forthcoming in May, when President Trump formally announced his decision to withdraw from the JCPOA.
On June 19, 2018, the Coalition for Fair Rack Imports filed a petition for the imposition of antidumping and countervailing duties on imports of Steel Racks from the People’s Republic of China.
SCOPE OF THE INVESTIGATION
The merchandise covered by this investigation is steel racks and parts thereof, assembled or unassembled. Steel racks are racks made of steel of dimensions and configurations that can be adjusted as required, with or without locking tabs or slots, and with or without bolted, clamped, or welded connections, including any of the following: uprights, posts, columns, braces, frames, beams, arms, locking devices, and rails.
On Monday evening June 18, the U.S. Senate adopted draft legislation in its version of the National Defense Authorization Act for Fiscal Year 2019 (the “2019 Defense Bill”) which would: (i) prevent the U.S. Department of Commerce – Bureau of Industry and Security (“BIS”) from fulfilling its agreement to suspend current export controls applicable to Zhongxing Telecommunications Equipment Corporation of Shenzen, China and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (collectively “ZTE”), and (ii) expand existing language in the 2019 Defense Bill to prohibit all U.S. government agencies from contracting with ZTE. The Senate approved this bill by a vote of 85-10. After last night’s vote, it has been reported that ZTE shares have dropped more than 25%. The U.S. House and Senate will still need to reconcile the differences in their versions of the 2019 Defense Bill before they send it to the President, but if they can do so while retaining enough votes to override a Presidential veto then BIS will be unable to remove ZTE from the Denied Persons list and ZTE will continue to be subject to export and re-export prohibitions in transactions involving U.S. origin goods, software and technology.
On Friday, June 15, the Office of the U.S. Trade Representative released a proposed list of 284 products from China that may be subject to a 25% tariff. They have released a timeline for public comment on these products, which will be published in the Federal Register on June 20, at this link.
On Monday, June 18, the President released a statement indicating that he had directed the U.S. Trade Representative to identify another $200 billion worth of Chinese goods for additional tariffs at a rate of 10%.
On Friday, June 15, 2018, President Trump announced that the US would be imposing a 25% tariff on Chinese technology imports. The tariffs were originally proposed on March 22, 2018 as a result of a Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. See our original post here.
Tariffs will be imposed on certain products starting on July 6, 2018. Those products are listed here and consist of a subset of the products proposed on March 22.
As a result of the Steel and Aluminum tariffs announced by President Trump in March 2018, and amended with proclamations issued on May 1, 2018, and June 1, 2018, several trading partners have decided that reciprocal and retaliatory tariffs on U.S. products are appropriate. To date, the following countries have decided to retaliate – Canada, China, the European Union, India, and Mexico. See the comprehensive list of retaliatory tariffs here.
Nowadays, the only thing that remains certain in the industry of domestic and global trade is the unpredictability of influential decisions made by the U.S. government and how those decisions will impact trading laws and regulations.
There has been much to say regarding Section 232 and related tariff concerns. On Husch Blackwell’s TMT Industry Insider…
