CBP is awaiting Federal Register publication of the Office of the U.S. Trade Representative notice delaying increased Section 301 tariffs on $200 billion in Chinese goods (see 1809180016). While the USTR posted the coming notice (see 1812140034), CBP confirmed it would wait to make changes in ACE until the notice is formally published in the Federal Register. The National Customs Brokers & Forwarders Association of America noted in an email to members that there's been some confusion "when customs brokers who transmit entries early for shipments arriving after January 1 notice that CBP's system applies a 25% tariff rate for these products." Brokers should be aware that "10% will be the correct duty rate on January 1, but CBP's system will nevertheless show a duty rate of 25% until official notification is published," NCBFAA said.
The Office of the U.S. Trade Representative will officially suspend the planned increase in Section 301 tariffs on $200 billion worth goods from China that had been set for Jan. 1, the agency said in a notice. That notice said the third tranche of the tariffs will remain at 10 percent for the time being and won't increase to 25 percent until March 2. The delay follows a recent deal reached by the U.S. and China to begin negotiations toward a resolution of the ongoing trade dispute.
GoPro will move most of its U.S.-bound action-camera production out of China by summer as a hedge against its products’ exposure on “any new” Section 301 tariffs list, the company said on Dec. 11. GoPro escaped tariffs through the three rounds of duties imposed between July and September. “Today's geopolitical business environment requires agility, and we're proactively addressing tariff concerns” with the move, Chief Financial Officer Brian McGee said. “This diversified approach to production can benefit our business regardless of tariff implications.” McGee spoke on a quarterly earnings call in early November of GoPro preparations to move production out of China if “necessary.” President Donald Trump threatened Sept. 17 to "immediately pursue" a fourth tranche of tariffs on $267 billion worth of additional imports if China retaliated for the duties that took effect Sept. 24. China did retaliate, but Trump never acted. GoPro didn’t comment on where it’s moving production to.
There's been some significant growth in imports of products eligible for Generalized System of Preferences benefits in recent months, the Coalition for GSP said in a blog post. The coalition, which advocates for keeping the GSP program in place and is run by a consultancy called Trade Partnership Worldwide, said October set another record for GSP imports. The GSP benefits in October saved U.S. companies $105 million, an increase of $12 million, or 13 percent, over the previous record set in August, the group said.
Cable modems that are made up of Chinese parts but assembled in Mexico are subject to the 10 percent Section 301 tariffs on goods from China, CBP said in a Nov. 27 ruling. The ruling request was submitted by Barnes Richardson lawyer Lawrence Friedman on behalf of Zoom Telephonics. CBP's analysis is on two types of modems, one type that includes a Wi-Fi gateway and one that does not. The modems are Data Over Cable Service Interface Specification (DOCSIS) 3.1 and compatible with several major cable systems, including Comcast and Cox, it said.
Importers paid more than $6 billion total in tariffs in October, the first full month that there were additional tariffs on $200 billion in Chinese goods, according to an analysis from Tariffs Hurt the Heartland. The group said that amount -- which is $3.1 billion more than was paid in October 2017 -- has not slowed imports on the tariffed goods, but has drastically cut exports that are subject to retaliatory tariffs. The group is funded in part by farm interests, who have been particularly hard-hit by retaliation. Their Dec. 7 release said that imports subject to new tariffs declined 0.6 percent in October, while exports targeted for retaliation fell 37 percent. About two-thirds of the increase is for Section 301 tariffs, while steel and aluminum tariffs cost an additional $446 million. The goods on the Section 301 list would have cost $394 million in tariffs before the action; in October, tariffs on those imports were $2.6 billion. CBP recently said it has assessed more than $10 billion under the recent Trump administration Section 201, 232 and 301 trade remedies (see 1811260010).
October imports at major U.S. retail ports exceeded 2 million containers in a single month for the first time as retailers continued to rush merchandise into the country ahead of the now-postponed Jan.1 increase in Section 301 tariffs on goods from China, the National Retail Federation said. President Donald Trump “declared a temporary truce in the trade war” when he put a 90-day hold on hiking the 10 percent tariffs to 25 percent, but “these imports came in before that announcement was made,” NRF said. “We hope that the temporary stand-down becomes permanent, but in the meantime there has been a rush to bring merchandise in before existing tariffs go up or new ones can be imposed.” U.S. ports handled 2.04 million 20-foot containers or their equivalents in October, the latest month for which after-the-fact numbers are available, NRF said. That was up 9 percent from September and up 13.6 percent year-over-year, it said. The previous single-month record, 1.9 million containers, was set in July, it said. NRF estimates ports handled 2.01 million containers in November, a 14 percent year-over-year increase. It forecasts 21.8 million containers will be handled in 2018, a 6.5 percent increase from the record 20.5 million handled in 2017. It sees a “significant slowdown” in 2019 import growth “as the market adjusts to higher prices due to the Trump tariffs and the impact on consumer and industry confidence going forward.”
Increased material costs was the top cost pressure for 20 percent of CEOs surveyed by the Business Roundtable, and that group's leader said tariffs are the reason why. Only labor costs was mentioned by more CEOs. Business Roundtable CEO Josh Bolten said that while the survey, released Dec. 7, didn't ask which set of tariffs is the problem, he's hearing from companies that metals tariffs are a bigger burden than the Section 301 tariffs. That's because a relatively small amount of production uses inputs from lists one and two of Chinese imports, and steel is used in many sectors. "The ones that have gotten the biggest public attention are the auto manufacturers," he said, "but really it's across the membership."
A withdrawal of the U.S. from NAFTA by President Donald Trump could help push the new NAFTA through Congress, according to Sen. Chuck Grassley, the Iowa Republican who will take over the Senate Finance Committee next year. Grassley, who was speaking on an agriculture radio program on Dec. 3, also praised the president's approach to trade more broadly.
International Trade Today is providing readers with some of the top stories for Nov. 26-30 in case they were missed.