trade law update

In Husch Blackwell’s December 2019 Trade Law Newsletter, you’ll learn about the following updates in international trade and supply chain law.

  • USMCA Passes House, Setting Stage for Vote in the Senate in 2020
  • U.S.-China Reach “Phase One” trade agreement
  • USTR Announces New Round of Product Exclusions
  • USTR to Expand List of EU Imports Subject to Tariffs
  • An update on U.S. Department of Commerce decisions
  • U.S. International Trade Commission – Section 701/731 proceedings
  • An update from U.S. Customs & Border Protection
  • Summary of decisions from the Court of International Trade
  • Updates from the Court of Appeals for the Federal Circuit
  • December export controls and sanctions

If you have questions about our December Trade Law Update, please contact a member of Husch Blackwell’s International Trade & Supply Chain team.

On January 2, 2020, Commerce announced in the Federal Register the opportunity to request an annual administrative review for products that are currently subject to antidumping and countervailing duties.  As part of this annual review process, Commerce intends to select respondents based on U.S. Customs and Border Patrol (CBP) data for U.S. imports during the period of review. Any party wishing to participate in the antidumping and countervailing duty review process or who may be affected by duties on the products identified in the Federal Register notice should file a request for review no later than January 31, 2020.  In order to be eligible to participate in the review, a party must either be an exporter or importer of the specific products and during the specific time periods identified in the Federal Register notice.

If your company or your suppliers are affected by these cases, please contact Husch Blackwell’s International Trade and Supply Chain group for assistance on how the annual review process works.

The Office of the U.S. Trade Representative (“USTR”) announced that it is seeking comments from interested parties on whether or not to extend previously granted Section 301 exclusions for another year.  The List 1 exclusions, which were originally granted on March 25, 2019, are set to expire on March 25, 2020, but USTR is considering extending those exclusions for another year.  USTR will accept comments on the possible extension of exclusions beginning January 15, 2020 and until February 15, 2020.

We encourage clients and companies to review the listed exclusions and contact Husch Blackwell’s International Trade and Supply Chain Team with any questions or concerns.

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As we discussed in a recent client alert, the U.S. Department of Commerce recently issued a proposed rule (the “Proposed Rule”) which intends to give the U.S. Secretary of Commerce the authority to block, unwind or modify information and communications technology or services (“ICTS”) transactions involving “foreign adversaries” if the Commerce Secretary determines that such transactions threaten U.S. critical infrastructure, the U.S. digital economy or U.S. national security. There were many aspects of the Proposed Rule which were unclear, but the U.S. Department of Commerce indicated its willingness to consider comments from the public which were received on or before Friday, December 27, 2019.

Continue Reading Commerce Department Extends Comment Period for Foreign Adversary ICTS Rule

The U.S.-Mexico-Canada Agreement (“the USMCA”) passed the U.S. House of Representatives on December 19, 2019, by a vote of 385 to 41.  In order to be fully ratified by the United States, the USMCA must now be approved by the U.S. Senate, which has a total of up to 30 session days after the House vote to conduct a full vote on the bill.  While some Senators have expressed disapproval over the deal, as Senator Patrick Toomey of Pennsylvania opined in the Wall Street Journal, it is expected to pass the Senate as well.  Once approved by the Senate, the USMCA will be signed into public law by the President and implemented by presidential proclamation.   Given that Congress has recessed for the holidays, it is unlikely that a vote in the Senate on the USMCA will take place before the New Year, in which case the legislation will not take effect until sometime in 2020.

While similar to the North American Free Trade Agreement (“NAFTA”) in many ways, the USMCA makes several key changes to NAFTA.  Among the changes are provisions for digital trade, allowing data to flow more freely across borders.  The proposed USMCA also implements new local wage requirements and stricter local content requirements for the automotive sector, in addition to establishing a system to monitor workers’ conditions in Mexico.  Depending on the product in question, the USMCA rules of origin may or may not change from those under NAFTA.  For certain products it is possible that the USMCA rules of origin could even provide for more flexibility than those under NAFTA.  As such, importers should not assume that NAFTA-eligible products will remain eligible under the USMCA (or vice versa) and should check the new rules of origin carefully for their products.

We are monitoring the USMCA ratification process closely and will provide future updates as additional details become available.  Should you have any questions regarding the proposed USMCA, please contact Husch Blackwell’s International Trade and Supply Chain team.

On December 19, 2019, Petitioners FEB Fair Trade Coalition, Ellwood Group, and Finkl Steel filed a petition for the imposition of antidumping on imports of Fluid End Blocks from Germany, India, and Italy and countervailing duties on imports of such products from the People’s Republic of China, Germany, India and Italy.

SCOPE OF THE INVESTIGATION

The products covered by these petitions are forged steel fluid end blocks (“FEBs”), whether unfinished, semi-finished, or finished, and which are typically used in the manufacture or service of hydraulic pumps.

The term “forged” is an industry term used to describe the grain texture of steel resulting from the application of localized compressive force. Illustrative forging standards include, but are not limited to, American Society for Testing and Materials (“ASTM”) specifications A668 and A788.

For purposes of these petitions, the term “steel” denotes metal containing the following chemical elements, by weight: (i) iron greater than or equal to 60 percent; (ii) nickel less than or equal to 8.5 percent; (iii) copper less than or equal to 6 percent; (iv) chromium greater than or equal to 0.4 percent, but less than or equal to 20 percent; and (v) molybdenum greater than or equal to 0.15 percent, but less than or equal to 3 percent. Illustrative steel standards include, but are not limited to, American Iron and Steel Institute (“AISI”) or Society of Automotive Engineers (“SAE”) grades 4130, 4135, 4140, 4320, 4330, 4340, 8630, 15-5, 17-4, F6NM, F22, F60, and XM25, as well as modified varieties of these grades.

The products covered by these petitions are either (1) cut-to-length FEBs with a height (measured from its highest point) of 8 inches (203 .2 mm) to 40 inches (1,016.0 mm), a width (measured from its widest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), and a length (measured from its longest point) of 11 inches (279.4 mm) to 75 inches (1,905.0 mm), or (2) strings of FEBs with a height (measured from its highest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), a width (measured from its widest point) of 8 inches (203.2 mm) to 40 inches (1,016.0 mm), and a length (measured from its longest point) up to 360 inches (9,144.0 mm).

The products included in the scope of these petitions have a tensile strength of at least 70 KSI (measured in accordance with ASTM A370) and a hardness of at least 140 HBW (measured in accordance with ASTM E10).

FEBs may be unfinished or have undergone one or more of the following finishing operations: (1) milling one or more flat surfaces; (2) contour machining to custom shapes or dimensions; (3) drilling or boring holes; (4) heat treating; (5) painting, varnishing, or coating; (6) threading; and/ or (7) the attachment of flanges, valves, seals, or connectors.

The products included in the scope of these petitions may enter under Harmonized Tariff System of the United States (“HTSUS”) subheadings 7218.91.0030, 7218.99.0030, 7224.90.0015, 7224.90.0045, 7326.19.0010, 7326.90.8688, or 8413.91.9055. While these HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the petitions is dispositive

PETITIONER

FEB Fair Trade Coalition

c/o Forging Industry Association

111 Superior A venue

Suite 615

Cleveland, OH 44114

Phone: (216) 781-6260

Fax: (216) 781-0102

febcoalition@clktrade.com

 

Ellwood Group

600 Commercial A venue

Ellwood City, PA 16117

Phone: (866) 367-3811

Fax: (724) 752-9711

gtimmons@elwd.com

www.ellwoodcityforge.com

 

Finkl Steel

412 S. Wells Street

Chicago, IL 60607

Phone: (773) 975-2510

Fax: (773) 348-5347

mshirley@finkl.com

www.finkl.com

 

COUNSEL FOR PETITIONERS

Jack A. Levy Esq.

Cassidy Levy Kent (USA) LLP

900 19th Street NW

Washington, DC 20006

NAMED PRODUCERS/EXPORTERS

For a list of foreign products/exporters alleged by Petitioner, please see Attachment I

NAMED IMPORTERS

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

ESTIMATED SCHEDULE

Event Earliest Date
Petition Filed December 19, 2019
DOC Initiation January 8, 2020
ITC Preliminary Investigation:
Questionnaires Due January 2, 2020
Request to appear at hearing January 6, 2020
Hearing January 9, 2020
Briefs January 13, 2020
ITC Vote February 3, 2020
DOC Preliminary Antidumping Determination May 27, 2020
DOC Preliminary CVD Determination March 13, 2020
DOC Final Antidumping Determination August 12, 2020
DOC Final CVD Determination May 27, 2020
ITC Final Antidumping Determination September 28, 2020
ITC Final CVD Determination July 13, 2020

 

ALLEGED DUMPING MARGIN

Germany: 69.37%

India: 12.82%

Italy: 77.24%

ALLEGED SUBSIDIES

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

 

IMPORTS OF SUBJECT MERCHANDISE

The information was redacted from the petition.

 

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 December 18, 2019, Petitioner Coalition Against Korean Cigarettes filed a petition for the imposition of antidumping duties on imports of 4th Tier Cigarettes from the Republic of Korea.

 

SCOPE OF THE INVESTIGATION

The physical characteristics of the covered product, which define the scope, are as follows:

The merchandise covered by this investigation is certain tobacco cigarettes, commonly referred to as “4th tier cigarettes.” The subject cigarettes are composed of tobacco rolled in paper, have a nominal minimum total length of 7.0 cm but do not exceed 12.0 cm in total nominal length, and have a nominal diameter of less than 1.3 cm. These sizes of cigarettes are frequently referred to as “Kings” and “l 00’s,” but subject merchandise that meets the physical description of the scope is included regardless of the marketing description of the size of the cigarettes. Subject merchandise typically has a tobacco blend that consists of 10% to 40% tobacco stems.

Subject merchandise is typically sold in packs of 20 cigarettes per pack which generally includes the marking “20 Class A Cigarettes” but are included regardless of packaging. 4th Tier cigarette packages typically sold in boxes without a rounded internal comer and without embossed aluminum foil inside the pack.

Both menthol and non-menthol cigarettes and cigarettes with or without a filter attached are covered by the scope of this investigation.

Excluded from the scope of this investigation are cigarettes that legally bear the valid and enforceable brand and/or trademark of a company who is a participating member of the Master Settlement Agreement (“MSA”) of November 1998. Merchandise covered by this investigation is currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under subheading 2402.20.8000. This HTSUS subheading is provided for convenience and customs purposes; the written description of the scope of the investigation is dispositive.

PETITIONER

Xcaliber International

One Tobacco Road

Pryor, OK 74361

(918) 824-0300

Eric Estes, VP and General Counsel

e.estes@xcaliberintemational.com

 

Cheyenne International

701 S Battleground Ave

Grover, NC 28073

(866) 254-697 5

David A. Scott, Chief Executive Officer

davidscott@cheyenneintl.com

 

COUNSEL FOR PETITIONERS

Daniel B. Pickard Esq.

Wiley Rein LLP

1776 K Street, NW

Washington, DC 20006

NAMED PRODUCERS/EXPORTERS

For a list of foreign products/exporters alleged by Petitioner, please see  Attachment I.

NAMED IMPORTERS

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

ESTIMATED SCHEDULE

Event Earliest Date
Petition Filed December 18, 2019
DOC Initiation January 7, 2020
ITC Preliminary Investigation:
Questionnaires Due January 1, 2020
Request to appear at hearing January 6, 2020
Hearing January 8, 2020
Briefs January 13, 2020
ITC Vote July 22, 2020
DOC Preliminary Antidumping Determination May 26, 2020
DOC Final Antidumping Determination August 10, 2020
ITC Final Determination September 23, 2020

 

ALLEGED DUMPING MARGIN

Korea: 91.72% – 113.06%

IMPORTS OF SUBJECT MERCHANDISE 

2016 2017 2018 2018 Jan-Sept 2019 Jan-Sept
Korea
Volume (1,000 Cartons) 12,748 11,254 12,573 9,212 14,058
Value ($1,000) 99,812 85,029 78,827 64,777 70,155
AUV ($/unit) 7.83 7.56 6.27 7.03 4.99
All Others
Volume (1,000 Cartons) 28,561 28,041 29,141 21,982 22,477
Value ($1,000) 117,912 130,440 139,913 104,176 108,165
AUV ($/unit) 4.13 4.65 4.80 4.74 4.81

 

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 December 12, 2019, the Office of the United States Trade Representative (“USTR”) announced in a Federal Register notice that they are reviewing the action taken as a result of the Large Civil Aircraft dispute with the European Union.  USTR is requesting comments on whether any products currently subject to additional duties should have those duties removed or whether the duties on any of those products should be increased up to a level of 100 percent.  USTR is also seeking comments on whether any other products listed in the April and July 2019 Federal Register notices should become subject to additional duties.  USTR has invited interested parties to submit comments by January 13, 2020.

We encourage clients and companies interested in submitting comments on this list of goods potentially subject to tariffs to contact Husch Blackwell’s International Trade and Supply Chain Team.

On December 12, 2019, the United States Trade Representative (“USTR”) issued another round of product exclusions pertaining to the 25% Section 301 List 3 Tariffs. The new list of exclusions includes 35 specifically crafted product descriptions that cover 75 separate exclusion requests. To view the full list of excluded products, click here. According to the USTR, the product exclusions apply retroactively to entries going back to September 24, 2018 and remain in effect until August 7, 2020. The products affected include fruits, calculators, towers of aluminum, and chairs, among other products.

USTR also issued a new exclusion pertaining to List 1 of the Section 301 tariffs for HTSUS subheading 9030.90.4600, which will apply retroactively to entries going back to July 6, 2018 and remain in effect until October 1, 2020. That subheading covers parts and accessories for instruments measuring ionizing radiation. The notice regarding List 1 also announces USTR’s determination to make amendments to certain HTSUS notes. Additionally, USTR released a notice to correct technical errors and to amend the notes to the HTSUS related to List 2.

We encourage clients and companies to review the listed exclusions and contact Husch Blackwell’s International Trade and Supply Chain Team with any questions or concerns.

After a long period of negotiation, Vice Minister Wang Shouwen of China’s Commerce Ministry announced on December 13, 2019 that the U.S. and China have agreed to “phase one” of an agreement to bring an end to the trade war that has disrupted global supply chains since 2018. China’s confirmation came after President Trump approved a limited deal and had suggested that an official agreement was close.

The Phase One agreement covers agriculture, intellectual property protection, tech transfers, financial markets, and currency matters, though to what degree is still to be determined at the time of this post’s publication.  Chinese officials declined to offer further details on tariff reduction or farm purchases, only stating that the U.S. would reduce tariffs in phases. An advisor to President Trump stated that China will purchase $50 billion of U.S. agricultural goods and that the agreement includes a “snapback” provision that would restore the original duty rates if China fails to make the purchases.

In return, the U.S. has agreed to indefinitely suspend implementation of the List 4B tariffs that were scheduled to go into effect on December 15.  The U.S. has also agreed to reduce some of its tariffs on Chinese imports. The Office of the U.S. Trade Representative (USTR) confirmed that the 25% tariffs on approximately $250 billion of Chinese goods would remain for now, but that the 15% tariffs on approximately $120 billion would be reduced to 7.5% as part of the deal.

The limited agreement between the U.S. and China does not bring an end to the trade disruptions. Most of the duties placed on Chinese imports by the U.S. are still in effect, such as the Section 301 List 1 through 3 tariffs, and the List 4A tariffs have only been reduced, not eliminated.  Moreover, the threat remains that the tariffs will be increased or reimposed if China does not live up to its end of the deal.  It is also unclear when a Phase Two agreement might be reached or what it would include.

We are closely monitoring this situation and will provide future updates as more facts become available. If you have any questions regarding the U.S.-China trade agreement or how it may affect your business, please contact Husch Blackwell’s International Trade and Supply Chain Team.