NAFTZ Asked FTZ Board Leader for Help on Sections 201, 301 Tariff Issues

The National Association of Foreign-Trade Zones recently wrote to Foreign-Trade Zones Board Executive Secretary Andrew McGilvray as part of the group's effort to address the "unintended and injurious impact" of section 201 and 301 tariffs on manufacturers in U.S. FTZs. NAFTZ is trying to get the Office of the U.S. Trade Representative to resolve issues involving the USTR's trade remedy language that results in unfair treatment of goods manufactured within FTZs (see 1808220034). "We respectfully request that the Foreign-Trade Zones Board communicate immediately with USTR to help resolve this increasingly-damaging situation for American FTZ manufacturers," he said.

The Commerce Department's instructions for Section 232 tariffs exempt duties on steel and aluminum products made in FTZs, whereas the USTR's language doesn't. "This oversight has created uncertainty on how to treat FTZ-manufactured products in these trade cases and has resulted in the inconsistent treatment described," NAFTZ President Erik Autor said in the Aug. 14 letter. "We seek a statement of clear and consistent policy from the Administration and USTR that duties imposed under trade-remedy actions are limited solely to foreign-origin imported products, and do not apply to goods that are U.S.-origin by virtue of having undergone a substantial transformation in a U.S. FTZ."

Such an exclusion would not reduce duty liability of inputs subject to the tariffs that are admitted into an FTZ in privileged foreign zone status, Autor said. "Absent specific language addressing this issue in Presidential and/or USTR guidance as was done in the Sec. 232 actions on steel and aluminum, a policy providing an explicit and consistent exclusion from any trade-remedies duties for products manufactured and substantially transformed in a U.S. FTZ is the best solution to correct and avoid these problems," he said.

Autor also mentioned a presentation NAFTZ is showing on Capitol Hill to help lawmakers understand the issue. Autor also testified on the subject recently during a hearing on Section 301 tariffs (see 1808210005). The FTZ Board didn't comment.