President Donald Trump said the administration will begin the process of revoking Hong Kong's special status, including the fact that it's treated more leniently than China with regard to “export controls on dual-use technologies, with few exceptions.” He said Hong Kong would no longer be treated as a separate customs territory, but gave no details during a May 29 press conference about how long it would be until the changes take effect.
Customs Duty
A Customs Duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs Duty Rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight.
Secretary of State Mike Pompeo said, “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” in a statement May 27 to Congress that Hong Kong no longer warrants the same treatment under U.S. laws as it did before the handover to China in 1997.
A U.S. manufacturer seeks the imposition of new antidumping duties on walk-behind lawn mowers from China and Vietnam, as well as countervailing duties on walk-behind lawn mowers from China, it said in petitions filed with the Commerce Department and the International Trade Commission May 26. Commerce will now decide whether to begin AD/CVD investigations, which could result in the imposition of permanent AD/CV duty orders and the assessment of AD and CV duties on importers.
The Office of the U.S. Trade Representative said its negotiators will seek to make things easier for express shippers in Kenya, will seek to get Kenya to agree to basing its phytosanitary rules on science, and “secure comprehensive duty-free market access for U.S. industrial goods” as it works towards a free-trade agreement with that country.
The complexity of the auto rules of origin in both NAFTA and the U.S.-Mexico-Canada Agreement are the result of what one observer calls the "political preoccupation" with retaining domestic auto manufacturing. Eric Miller, president of Rideau Potomac Strategy Group, noted that in NAFTA, that resulted in the tracing list, and in USMCA, that resulted in the labor value content and higher North American value targets, including for specific parts.
A domestic labor union filed petitions on May 12 with the Commerce Department and the International Trade Commission requesting new antidumping duty investigations on passenger vehicle and light truck tires from South Korea, Taiwan, Thailand and Vietnam, and new countervailing duties on the same product from Vietnam. Commerce will now decide whether to begin AD/CVD investigations on passenger vehicle and light truck tires that could eventually result in the assessment of AD/CV duties.
CBP has assessed about $62 billion in duties under the major trade remedies started during the Trump administration as of May 13, according to CBP's trade statistics page. That includes $51.4 billion in duties from the Section 301 tariffs on goods from China, and $486.1 million in Section 301 tariffs on goods from the European Union. CBP also has assessed about $7 billion under the Section 232 tariffs on steel and $2.1 billion under tariffs on aluminum. The Section 201 trade remedies on washing machines, washing machine parts and solar cells account for $1.7 billion in assessed tariffs. CBP's statistics account for refunds provided to importers.
Rep. Kevin Brady, R-Texas, would like to join with some congressional Democrats in a conversation with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer about “flexibility or time extension on the tariff relief,” he said during a conference call with reporters May 13. Brady, the ranking member of the House Ways and Means Committee, said that although tariff savings from a deferral of regular customs duties may not “seem large for individual businesses, it can be very important for them retaining their workers and riding the crisis out.”
Decrease in User Fees Hitting CBP's Budget; About $72 Million in Duties Were Deferred, Official Says
The travel limitations imposed to slow the spread of COVID-19 has resulted in a big hit to CBP's budget due to the decrease in corresponding user fees, said Thomas Overacker, CBP executive director, Cargo and Conveyance Security, while speaking on the virtual National Association of Foreign-Trade Zones conference on May 12. CBP is actively looking for ways to cut spending as a result. Overacker said the northern and southern border restrictions are scheduled to expire on May 20 (see 2004210046) and that there's been no indication that the restrictions will be extended again.
Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Rep. Terri Sewell, D-Ala., agree that revisiting the tariff deferral for importers with lost revenue could be worthwhile for Congress. Both were responding to questions from International Trade Today on May 12, during conference calls with reporters. Grassley said, “It sounds like something we ought to be looking into.” Some other Republican senators have also offered support for the idea (see 2005050045)