Hong Kong Tariff Treatment Still Unsettled Until CBP Guidance, Trade Experts Say

As importers await CBP guidance on imports from Hong Kong, some think there still may be more to come from a recent executive order suspending Hong Kong’s special status under certain trade laws. While the order only mentioned country of origin marking on the import side, “I also suspect that the details will continue to emerge and that other restrictions may be applied,” Lawrence Friedman of Barnes Richardson said by email.

CBP officials on a July 23 software developer call said that, while there have been “internal discussions” around whether filers should transmit China or Hong Kong for country of origin in ACE, guidance on the issue is still “forthcoming” (see 2007230069). As of press time, CBP had yet to clarify its policy. The agency did not immediately comment on July 29.

A senior administration official has said the executive order would not result in Section 301 tariffs on China being applied to goods of Hong Kong. But with CBP’s guidance still yet to be issued, some wonder what the end result of the executive order will be, and whether it means more tariffs for goods from Hong Kong.

“The impact of the Hong Kong Executive Order implementing the [Hong Kong Autonomy Act] and revoking Hong Kong’s preferential trade status, could result in massive changes for importers,” Andrew Siciliano of KPMG said. “Although the EO only refers to the marking statutes, it is possible that additional changes could result in trade remedy tariffs applied to goods previously marked as Hong Kong, but that would now be marked as goods of China. However, right now all we know is that U.S. Customs and Border Protection is considering how to implement the EO,” he said.

“Since the EO was silent about whether trade remedy tariffs would be applied we need additional clarity from CBP,” said Elizabeth Shingler, also with KPMG. “Typically, marking and country of origin align, so we would expect that products from Hong Kong could be subject to Section 301 since we would presume the declared country of origin would be China,” Shingler said. “However, we need CBP to provide guidance about whether an exception is being created.”