The U.S. is set to levy 25% tariffs on imports of specified European foods in response to the World Trade Organization’s (“WTO”) decision on October 2, 2019, that the European Union (E.U.) provided subsidies to Airbus at the expense of Boeing and the United States. These new tariffs will affect approximately $7.5 billion beginning today, October 18, 2019.

The goods subject to additional tariffs not only include goods that would affect Airbus directly, such as a 10% levy on large civil aircraft, but also products like Irish whiskey, various European cheeses, and other agricultural goods. According to the Office of the U.S. Trade Representative (“USTR”), the bulk of the tariffs are on products primarily from France, Germany, Spain, and the United Kingdom, since they were most responsible for the Airbus subsidies. Click here to view the list of products that are subject to the retaliatory 25% tariffs.

The WTO will rule on the E.U.’s case against Boeing next year, at which point, if it is found that the U.S. provided unfair subsidies to Boeing, the E.U. will be authorized to retaliate. Though WTO rules prevent the E.U. from imposing retaliatory tariffs in the meantime, the risk for escalation of this trade war between the U.S. and Europe is high. According to the Wall Street Journal, European diplomats are considering retaliation prior to their WTO hearing, especially if U.S. president Trump decides to tax cars and auto parts from Europe by November 13, 2019, which is likely as the result of a pending Section 232 action that is currently under review by the White House.

We will continue to monitor this situation and will provide future updates as developments occur. Please contact Husch Blackwell’s International Trade and Supply Chain team for more information.

White House

On October 14, 2019, President Trump announced via Twitter his intention to authorize sanctions against Turkey and “any persons contributing to Turkey’s destabilizing actions in northeast Syria.” The announcement followed Turkey’s recent military operation against predominately Kurdish forces in northern Syria, which began following the withdrawal of U.S. troops from the region. Later in the day, President Trump issued an Executive Order (the “Syria-Turkey EO”) to formally implement those sanctions. Under the Syria-Turkey EO:

  • The U.S. Secretary of the Treasury is now authorized to impose blocking sanctions on any person that it determines to be: (i) responsible for or complicit in actions that threaten Syrian stability or abuse human rights, (ii) an official or agency of the Government of Turkey, or (iii) operating in sectors of the Turkish economy that the Secretary of Treasury might later decide to target with sanctions. The Syria-Turkey EO also authorizes the Treasury Secretary to impose blocking sanctions on any person (including non-U.S. persons) who provides material assistance, goods or services to or in support of any person sanctioned under the Syria-Turkey EO.
  • The U.S. Secretary of the Treasury is authorized to restrict or prohibit foreign financial institutions from opening or maintaining correspondent or payable through accounts in the U.S. if the Treasury Department determines that those foreign financial institutions have knowingly conducted or facilitated any significant financial transaction for or on behalf of any person who becomes subject to the above-described blocking sanctions.
  • The U.S. Secretary of State is now authorized to impose menu-based sanctions on any person the Secretary determines to have interfered with peacekeeping and restorative efforts in northern Syria. These authorized menu-based sanctions include (but are not limited to): blocking sanctions, denial of U.S. entry visas and financing-based sanctions.

Continue Reading President Trump Imposes Sanctions Against Turkey for its Syria Offensive

The U.S. International Trade Commission (ITC) announced on October 11, 2019 the opening of its system for accepting petitions for tariff relief under the American Competitiveness Act of 2016 (commonly referred to as the Miscellaneous Tariff Bill or MTB).  The MTB allows U.S. importers to petition for duty-free or reduced-duty treatment of imported products that are unavailable domestically.  It is important to note that the duty relief afforded under the MTB applies to customs duties and not tariffs imposed on imports pursuant to Section 232 or 301 tariffs.

Interested parties may file petitions for relief through the ITC’s MTB portal for the next 60 days.  All petitions must be submitted no later than 5:15 p.m. EST on December 10, 2019.  Nevertheless, we strongly encourage interested parties to submit MTB petitions earlier. After reviewing the petitions and comments filed, the ITC will compile and submit a report with its recommendations to the House Ways and Means Committee and Senate Finance Committee, which must pass the MTB in order for the three-year duty suspensions to take effect.  If signed into law, the MTB exemptions may become effective January 1, 2021, with an expiration date of December 31, 2024.  The timeline for the process can be found here.

In making its recommendations and compiling its report, the ITC will consider the following factors: (1) whether there is any domestic production of the article; (2) whether the duty suspension is administrable by U.S. Customs and Border Protection (CBP); (3) whether the estimated loss of revenue which will result from the duty suspension or reduction exceeds $500,000 and (4) whether the duty suspension or reduction will be available to any person importing the article.

Located on the ITC website is an information page that provides documents that outline the process and offer a sample petition submission as a reference. To see the page, click here.

To see the published Federal Register Notice, click here.

For additional information concerning the MTB petition process or to assess whether your business might be able to take advantage of this duty savings opportunity, please contact Robert Stang, Cortney Morgan, or Nithya Nagarajan of Husch Blackwell’s International Trade and Supply Chain team.

On October 7, 2019, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced that it would add twenty eight (28) Chinese entities consisting of companies, government offices, and security bureaus to the Entity List for engaging in or enabling activities contrary to U.S. foreign policy interests.  Similar to the actions taken against China’s Huawei in May 2019, the End-User Review Committee (ERC) has determined it necessary to impose sanctions on the 28 Chinese based entities, which includes twenty (20) government agencies and eight (8) artificial intelligence companies, due to China’s treatment of the people of the Xinjiang Uighur Autonomous Region (XUAR).  The full list of entities is available here.

The Entity List designation will restrict the listed organizations from buying any U.S. products and importing U.S. technology.  Additionally, U.S. Commerce Secretary Wilbur Ross stated that any U.S. suppliers that seek to continue business with the listed companies would need to obtain a specific license from BIS.  Furthermore, BIS has set forth licensing policies that vary from entity to entity and differ according to the relevant Export Control Classification Number (ECCN) of the exported item.

In its press release, the Commerce Department stated that, “these entities have been implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass arbitrary detention, and high technology surveillance against Uighurs, Kazakhs, and other members of Muslim minority groups in the XUAR.”  This announcement comes just days before the U.S. and China delegations are scheduled to meet in Washington to continue talks related to the ongoing tariffs.

Husch Blackwell’s Export Controls & Economic Sanctions Team is monitoring this situation closely.  Please contact Cortney Morgan or Grant Leach should you have any questions concerning the recent additions to the BIS Entity List or associated implications for U.S. and non-U.S. businesses.

In Husch Blackwell’s September 2019 Trade Newsletter you’ll find international trade and supply chain updates including presidential actions, U.S. Department of Commerce Decisions, U.S. International Trade Commission Proceedings, U.S. Customs & Border Protection Decisions, Court of International Trade Decisions, Federal Court of Appeals Decisions, and Export Controls and Sanctions.

If you have questions about September’s trade law update, please contact a member of Husch Blackwell’s International Trade and Supply Chain team.

On October 2, 2019, the World Trade Organization (WTO) Arbitrator ruled in favor of the United States and Boeing in its dispute against the European Union and Airbus on the subsidies provided by the E.U. to Airbus. The ruling permits the U.S. to levy retaliatory tariffs on approximately $7.5 billion worth of European exports to the United States. In its decision, the Arbitrator determined that the adverse effects of the E.U.’s Airbus subsidies amounted to approximately $7.5 billion per year.  The Arbitrator also found that the E.U. had not demonstrated that the U.S. failed to follow WTO principles in its challenge leading to the decision against Airbus.

The U.S. Trade Representative (USTR) has prepared a list of European goods valued at over $20 billion that could be subjected to tariffs. The full list of products can be viewed from the USTR’s website. The E.U. has also prepared tariff countermeasures of its own. Under WTO rules, the U.S. and E.U. may levy tariffs not only on aircraft parts, but on a variety of products, including food, alcohol, and motorcycles. The USTR intends to impose a ten percent duty on imports of large civil aircraft and a twenty-five percent duty on agricultural and other products.

According to the Wall Street Journal, a senior USTR official has stated that the tariffs will go into effect on October 18, 2019. The WTO’s Dispute Settlement Body is scheduled to convene on October 28, 2019 and the DSB has to approve the decision, though the U.S. has requested an earlier meeting for October 14 to authorize the retaliatory action. The WTO is not scheduled to make a decision on the E.U.’s complaint against Boeing until 2020. European diplomats have suggested that any American import duties imposed would make E.U. retaliation much more likely, causing potentially severe disruptions within supply chains.

We will continue to monitor this situation and will provide future updates as developments occur. Please contact Husch Blackwell’s International Trade and Supply Chain team for more information.

 

On September 30, 2019, the Office of the U.S. Trade Representative (USTR) issued a Federal Register Notice announcing two new sets of product exclusions for Section 301 tariffs on goods from China.  The newly granted exclusions cover 92 product exclusions from the first tranche of Section 301 tariffs, which went into effect on July 6, 2018.  The second set of granted exclusions cover 111 product exclusions from the second tranche, which went into effect on August 23, 2018. The exclusions from the first tranche mostly cover certain machinery, while the second tranche exclusions cover electrical components, such as certain electric motors, conductors, and copper wire.  Importers and those affected by these tariffs are encouraged to review these lists and contact counsel should they require any additional clarification. The new exclusions will apply for one year from the date of publication on the Federal Register of the granted exclusion requests.

We will continue to monitor this situation and will provide future updates as developments occur. Please contact Husch Blackwell’s International Trade and Supply Chain team for more information.

On September 25, 2019, the U.S. Trade Representative (USTR) announced a new bilateral trade deal between the U.S. and Japan. According to the Office of the USTR, Japan will reduce or eliminate tariffs for certain American agricultural goods, while the U.S. will reduce or eliminate tariffs for certain agricultural imports from Japan. American agricultural goods affected by the deal include beef and pork, wheat and barley, certain nuts and berries, wine, and ethanol, among other miscellaneous agricultural goods. Among Japanese agricultural goods affected are certain plants and flowers, green tea, chewing gum, and soy sauce. The U.S. will also reduce or eliminate tariffs on certain Japanese industrial goods, including certain machine tools, bicycles and bicycle parts, steam turbines, fasteners, and musical instruments.

Additionally, the two countries have agreed to a set of provisions addressing digital trade, ensuring non-discrimination of digital goods and services and prohibiting data localization requirements, allowing barrier-free cross-border data transfers. Conspicuously absent from the U.S.-Japan Trade Agreement is any discussion of the removal of auto tariffs on Japanese cars imported by the US.

We will continue to monitor this situation and will provide future updates as developments occur. Please contact Husch Blackwell’s International Trade and Supply Chain team for more information.

On September 25, 2019, Petitioner American Glass Packaging Coalition filed a petition for the imposition of antidumping and countervailing duties on imports of Certain Glass Containers from the People’s Republic of China.

SCOPE OF THE INVESTIGATION

The merchandise covered by this investigation are certain glass containers with a nominal capacity of 0.059 liters (2.0 fluid ounces) to 4.0 liters (135.256 fluid ounces) and an opening or mouth with a nominal outer diameter of 14 millimeters to 120 millimeters. The scope includes glass jars, bottles, flasks and similar containers; with or without their closures; whether clear or colored; and with or without, design or functional enhancements (including, but not limited to, handles, embossing, labeling, or etching).

Excluded from the scope of the investigation are: (1) Glass containers made of borosilicate glass, meeting United States Pharmacopeia requirements for Type 1 pharmaceutical containers; (2) Glass containers produced by free blown’ method or otherwise without the use of a mold (i.e., without ‘mold seems’, ‘joint marks’, or ‘parting lines ‘); and (3) Glass containers without a ‘finish’ (i.e., the section of a container at the opening including the lip and ring or collar, threaded or otherwise compatible with a type of closure , including but not limited to a lid, cap, or cork).

Glass containers subject to this investigation are specified within the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings 7010.90.5009, 7010.90.5019, 7010.90.5029, 7010.90.5039, 7010.90.5049, 7010.90.5055, 7010.90.5005, 7010.90.5015, 7010.90.5025, 7010.90.5035, and 7010.90.5045. The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of the investigations is dispositive.

PETITIONER

Anchor Glass Container Corporation

401 East Jackson Street, Suite 1100

Tampa, FL 33602

(812) 884-0000

Sam Hijab, VP and General Counsel

 

Ardagh Glass Inc.

8770 W Bryn Mawr Avenue

Chicago, IL 60631-3542

(773) 399-3000

Joshua R. Markus, General Counsel

COUNSEL FOR PETITIONERS

Daniel B. Pickard

Wiley Rein LLP

1776 K Street, NW

Washington, DC 20006

NAMED PRODUCERS/EXPORTERS

For a list of foreign producers/exporters alleged by Petitioner, please see Attachment 1.

NAMED IMPORTERS

For a list of importers alleged by Petitioner, please see Attachment 2.

ESTIMATED SCHEDULE

Event Earliest Date
Petition Filed September 25, 2019
DOC Initiation October 15, 2019
ITC Preliminary Investigation:
Questionnaires Due October 9, 2019
Request to appear at hearing October 14, 2019
Hearing October 16, 2019
Briefs October 21, 2019
ITC Vote November 9, 2019
DOC Preliminary Antidumping Determination March 3, 2020
DOC Preliminary CVD Determination December 19, 2019
DOC Final Antidumping Determination March 19, 2020
DOC Final CVD Determination March 3, 2020
ITC Final Determination July 3, 2020

 

ALLEGED DUMPING MARGIN

People’s Republic of China:

Alleged Dumping Margin: 264.13% – 818.57%

ALLEGED SUBSIDIES

For a list of alleged countervailing duty programs, please see Attachment 3.

IMPORTS OF SUBJECT MERCHANDISE

 

2016 2017 2018 2018 Jan-Jun 2019 Jan-Jun
China
Quantity (1,000 gross) 11,014 12,566 14,232 7,215 6,154
Value ($1,000) 350,237 400,831 452,867 225,566 215,502
AUV ($/unit) 31.8 31.9 31.8 31.3 35

 

CONTACT US

For more information concerning this petition and how it may affect your business, please contact Jeffrey Neeley, Nithya Nagarajan, or Stephen Brophy.

On Wednesday, September 11, 2019, President Donald Trump posed an unexpected tweet that the United States would be delaying the implementation of the tariff increase from October 1, 2019 to October 15, 2019 as a “gesture of good will” towards China. Originally, President Trump had planned to increase the current 25% tariff rate on $250 billion worth of Chinese goods to 30%. To see previous post on the initial announcement, click here.

The announcement of the two week delay came just hours after China had stated that they would exempt 16 types of U.S. products from the imposition of tariffs upon importation into China. Currently, China’s retaliatory tariffs are supposed to go into effect on September 17, 2019. To see the list of products that China has temporarily exempted, click here. The two sides are scheduled to resume trade talks next month in Washington, DC.

We will continue to monitor this situation and will provide future updates as developments occur. Please contact Husch Blackwell’s International Trade and Supply Chain team for more information.