Customs duty

The U.S. Court of International Trade dismissed a challenge to the Section 232 steel and aluminum tariffs' exclusion process, finding that the importer-specific exclusion process is constitutional. In the case, steel importer Thyssenkrupp Materials and its subsidiaries said that by excluding individual importers from the tariffs, the process violated the Constitution's uniformity clause by discriminating against steel and aluminum importers based on geography (see 2004230053). Thyssenkrupp also held that the exclusion process was inconsistent with presidential proclamations dictating how the exclusions should be conducted. Judges Claire Kelly, Gary Katzmann and Jane Restani in their March 10 opinion were unconvinced of both arguments and granted the government defense's motion to dismiss the case.

CBP will allow importers to continue to use Part 102 NAFTA marking rules for goods imported from Canada and Mexico, even though they are no longer a requirement for USMCA preferences, said James Kim, a lawyer with CBP’s Office of Regulations and Rulings currently working at the agency’s USMCA center, during a Zoom call following a panel discussion March 9.

International Trade Today is providing readers with the top stories from March 1-5 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.

Walmart threw its massive weight behind the Section 301 litigation inundating the U.S. Court of International Trade when it joined thousands of other importers March 8 in seeking to get the lists 3 and 4A Chinese tariffs vacated and the duties refunded. The Office of the U.S. Trade Representative overstepped its 1974 Trade Act authority when it waged the retaliatory tariffs against the Chinese and violated the 1946 Administrative Procedure Act by running tariff rulemakings that lacked transparency, the retail giant’s complaint said, mirroring virtually all the 3,500 others filed since the beginning in mid-September. Walmart also joined the roughly two dozen small importers that argue that the list 3 and 4A duties also are “unlawful and unconstitutional” because only Congress has the power of taxation. The tariffs also “were enacted contrary to the Fifth Amendment guarantee of due process of law,” Walmart said. From statements made by President Donald Trump and other officials in his administration, “an additional, if not the sole, reason and purpose for the List 3 additional duties was to collect revenue for the federal general treasury,” the complaint said. “To the extent the List 3 additional duties were revenue collection measures, they were beyond the scope of actions USTR was authorized to take by the Trade Act of 1974 and, therefore, were unlawful.” Hogan Lovells is representing Walmart in the case. USTR didn’t comment.

The coming weeks will mark some important deadlines in the Section 301 litigation inundating the U.S. Court of International Trade after months of inertia. New complaints keep trickling in at the rate of about one a day to join the roughly 3,500 on file beginning since mid-September, virtually all seeking to get the lists 3 and 4A Chinese tariffs vacated and the duties refunded. Many thousands more importers are represented in the filings.

Todd Owen, former executive assistant CBP commissioner who worked in the Office of Field Operations before retiring, said during a March 3 webinar that the trade community should expect to see a lot more traditional customs work over the next few years, such as missed descriptions, undervaluation, duty evasion and import safety. Owen, who is a senior trade adviser at Diaz Trade Law, also said during the webinar that he thinks stopping goods made with forced labor is going to continue to be a priority for the Biden administration. “I don’t see this going away,” he said.

The Justice Department has moved to dismiss a case at the Court of International Trade that challenges the legality of President Donald Trump's move to withdraw a tariff exclusion for bifacial solar panels. The move indicates that the new Biden administration will, at least for the time being, not back down from its defense of the tariff exemption withdrawal, instead declaring that the president's actions were lawful.

Across dozens of pages of written answers to Senate Finance Committee members, U.S. trade representative nominee Katherine Tai often avoided directly answering questions, instead pledging to work with senators on their priorities. One of the most common questions posed to Tai was whether she would renew Section 301 exclusions that expired last year; as well, whether she would allow companies that were denied exclusions another chance at a request; and whether she would reopen the exclusion process.

Mesh Wi-Fi network extenders perform a different function than routers or switches and should be classified in a separate subheading, CBP said in a recently released ruling dated Dec. 18, 2020. The ruling is the result of an application for further review of protest submitted by Calix over an entry of mesh network extenders, which was liquidated in subheading 8517.62.0020. The classification issue is “whether or not the protested merchandise is 'switching and routing apparatus' of subheading 8517.62.0020, [Harmonized Tariff Schedule of the United States (HTSUSA)], or 'other' of subheading 8517.62.0090,” CBP said.

The U.S. Chamber of Commerce has warmly endorsed Katherine Tai to be U.S. trade representative. In a letter sent Feb. 23, Executive Vice President Myron Brilliant said her experience at the Office of the U.S. Trade Representative and as chief trade counsel for the House Ways and Means Committee, is invaluable. “She combines policy acumen, negotiating experience, and political savvy,” he wrote. “While one important aspect of USTR’s mission is to address unfair trading practices, the previous Administration’s dramatic expansion in the application of tariffs contributed directly to a manufacturing and agriculture recession well in advance of the [COVID-19] pandemic, and this experience illustrates the perils of an excessive reliance on tariffs. The next USTR must avoid the use of tariffs as a blunt instrument, and must avoid inaction on trade agreements as well,” he said, adding that Tai understands that.