Misclassification and valuation are among areas of enforcement focus for CBP's administration of the Section 232 tariffs on steel and aluminum, CBP officials said during an April 10 interview. "Classification is a way to play with it, valuation as well, but these are things we will have to look at," said John Leonard, executive director of trade policy and programs at CBP. There are some different considerations involved for looking at possible transshipments because most antidumping or countervailing duty evasions involve countries around China, such as Malaysia or Thailand, but those countries are affected by the 232 tariffs too, he said. "It's hard to put it in that same context," he said.
Section 232 Tariffs
The United States currently maintains a 25% tariff on steel imports and 10% on tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962. In 2018, the Trump administration imposed Section 232 Tariffs on steel and aluminum imports into the United States, citing national security concerns. The U.S. agreed to lift tariffs on Canada and Mexico after the signing of the United States-Mexico-Canada Agreement (USMCA), and reached deals with the European Union, Japan and other countries to replace the tariffs with quotas for steel and aluminum imports into the U.S.
Importers should keep an eye out for the effects new duties on steel and aluminum have on importer bond limits, said Liz Gant, a corporate regulatory compliance analyst at Samuel Shapiro & Company, in the company's monthly newsletter. CBP "uses duties, taxes and fees based on the previous 12 months to evaluate the sufficiency of your bond," she said. That means that if the Section 232 tariff duties remain in effect for an extended period, it could impact bond sufficiency. "While the additional tariffs are in place, bond sufficiency should be monitored by the importer closely," she said. "An importer does not want to be surprised if Customs deems their bond insufficient and a shipment is delayed while the importer gathers the information required for the surety."
China says that the U.S. decision to levy 25 percent tariffs on imported steel from some parts of the world, and 10 percent tariffs on aluminum, was not fair and impartial, and also violated World Trade Organization agreements by not treating all nations in the WTO equally with regard to the tariffs. Under WTO rules, countries are not allowed to raise tariffs above bound rates on some countries but not others in most circumstances. The U.S. used the Section 232 national security exemption from that rule, but China dismisses that assertion, and says that these tariffs are safeguards in disguise. Earlier, China asked for consultations on compensation for the safeguard tariffs (see 1803260025), and this latest request for consultations, posted April 10, tackles the legality of the action. China says the U.S. ignored the rules on how to implement safeguard tariffs. Those rules say that a country has to prove a surge in imports is harming or will harm domestic producers. The U.S. has already responded to China's earlier request for consultations by saying that these are not safeguard tariffs.
China disputed the legality of the Section 232 tariffs on steel and aluminum at the World Trade Organization (see 1803260025), and now the U.S. is disputing both the characterization of those tariffs and how China has responded to them. The tariffs were for national security, and not to protect domestic industry from rising imports, asserted Deputy U.S. Trade Representative Dennis Shea, ambassador to the WTO. China's decision on April 2 to implement tariffs on pork, aluminum scrap and other U.S. exports were not justified, Shea wrote in a letter to China's WTO ambassador, since China can only use the safeguards to respond to safeguards, and the U.S. measures were not safeguards. "China has asserted no other justification for the measures, and the United States is aware of none," he wrote. "Therefore, it appears that China's actions have no basis under WTO rules."
The Section 232 tariffs on steel and aluminum were only due on immediate transportation entries that were accepted by the port after the duty rates took effect on March 23, CBP said in an April 5 CSMS message. "Accordingly, entries of steel and aluminum articles covered by an entry for immediate transportation accepted at the port of original importation before March 23, may have been incorrectly rejected by CBP and/or incorrectly filed with a Chapter 99 steel or aluminum HTS classification," the agency said. The National Customs Brokers & Forwarders Association of America gave similar advice in a note to members on April 4 (see 1804040018).
The recently implemented Section 232 tariffs on steel and aluminum didn't apply to goods under an Immediate Transportation entry if those goods arrived within U.S. port limits as of the March 23 effective date (see 1803230014), the National Customs Brokers & Forwarders Association of America said in an April 3 email. The NCBFAA said it confirmed that with CBP. "Thus, where an IT was filed for goods which arrived prior to March 23, 2018, 232 duties should not be assessed even though the entry summary was filed after March 23, 2018," it said. Filers that "have deposited 232 duties on IT shipments which arrived prior to March 23, 2018 should contact their [Automated Broker Interface] Client Representative to discuss the procedure for obtaining a refund of the 232 duties." CBP didn't comment.
Ukraine is asking for consultations at the World Trade Organization over the U.S. Commerce Department's January determination that Ukraine is dumping carbon and alloy steel wire rod (see 1803130013). The WTO on April 3 published the request, which asks why the two companies that cooperated have antidumping duties of 44.03 percent, while others have 34.98 percent. It also asks why the U.S. took action against wire rod exporting companies in two groups (see 1803210009) to evaluate material injury. The document asks: "Would the United States please clarify how such a methodology comply with WTO rules and principles?" In other action April 3 at the WTO, China officially submitted its safeguard tariffs reacting to U.S. Section 232 tariffs on steel and aluminum (see 1804020009).
International Trade Today is providing readers with some of the top stories for March 26-30 in case they were missed.
An additional two presidential proclamations related to Section 232 tariffs on aluminum and steel were published March 28 in the Federal Register. One new detail was released on how companies can make arguments that the steel or aluminum they import should be excluded from tariffs. The proclamation said the commerce secretary can take "into account the regional availability of particular articles, the ability to transport articles within the United States, and any other factors as the Secretary deems appropriate."
International Trade Today is providing readers with some of the top stories for March 19-23 in case they were missed.