 January 2019 - Info Expeditor | ||
|
| |
 Dear Members, We would like to invite all to attend the very important Annual PCC Mission to DC this spring – details are attached. In addition, we are extremely pleased to announce we will again be offering a stipend to 4 of our members, on a first come first served basis, to help cover the cost of their trip. The qualifications & requirements are listed below:
Regards, Chris Ramos – President CBFANC 27th Annual PCC Mission to DC! Sunday March 31, 2019 through Tuesday April 2, 2019 For any freight forwarder or customs broker member of one of the 5 local associations of the PCC - Pacific Coast Council of Customs Brokers and Freight Forwarders. If there was ever a time for brokers and forwarders to come to DC, it's this spring!
Information? PCC Counsel, Peter Friedmann, OurManInDC@federalrelations.com. For hotel and registration matters: Stephen Hudson stephen@federalrelations.com 202-783-3333 Peter Friedmann Pacific Coast Council of Customs Brokers and Freight Forwarders Assoc. – The PCC 1120 G Street, NW, Suite 1020 Washington, D.C. 20005 office: 202-783-3333 cell: 202 329 7040 ourmanindc@federalrelations.com |
A Brief Introduction to U. S. Trade Remedy Provisions
U. S. trade remedies have recently become an even more major concern for importers of goods to the U. S., and, due to foreign retaliation against U. S. origin goods, for exporters as well. Many remedies are identified by shorthand names such as “safeguard,” “escape clause” or national security actions. Many are also identified by the section number of the law establishing them, even though there may have been multiple amendments between then and now.
Trade remedies are embodied in U. S. (and numerous other country) laws, but their use is covered by various agreements reached internationally under the World Trade Organization (WTO). These agreements allow WTO members to suspend certain obligations, most often bound tariff rates, without any retaliation by the targeted countries, provided specific conditions have been demonstrated and the required procedures have been followed. The WTO may require a country that fails to meet the conditions or follow the procedures to end its remedy actions; if that country does not to do so the WTO may authorize the targeted country or countries to impose retaliatory sanctions up to the value of any lost benefits.
Some of the most significant remedy provisions are:
Section 201 of the Trade Act of 1974 (19 U. S. C. §2251) permits the President to grant temporary import relief, by raising import duties or imposing nontariff barriers on goods entering the United States in such increased quantities that they injure or threaten to injure domestic industries producing like goods. These “safeguard” or “escape cause” actions involve an investigation and recommendations by the U. S. International Trade Commission (ITC).
Section 232 of the Trade Expansion Act of 1962 (19 U. S. C. §1862) authorizes the President, through tariffs or other means, to adjust the imports of goods or materials from other countries if it deems the quantity or circumstances surrounding those imports threaten national security. An investigation is conducted and recommendations made by the Department of Commerce (DOC). There is considerable controversy both within the U. S. and the WTO regarding what is meant by national security, and whether certain actions should be considered safeguard rather than national security actions, perhaps permitting retaliation.
Section 301 of the Trade Act of 1974 (19 U.S.C. §2411) authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce. This has primarily been applied to intellectual property complaints, although other practices may be involved. Investigation is conducted by the United States Trade Representative (USTR).
Section 337 of the Tariff Act of 1930 (19 U.S.C. §1337) makes unfair methods of competition and unfair acts involving the importation and sale of certain articles in the U.S. unlawful. These actions involving patent, copyright, trademark and trade secret issues are investigated and remedies including Exclusion Orders are imposed by the ITC.
Although not generally identified by a Section number, Antidumping duties are assessed under Section 701 of the Tariff Act of 1930 (19 U.S.C. §1671) when it is determined that foreign suppliers or manufacturers are selling goods in the United States at a less-than-fair market value. Dumping occurs when goods are sold at a price less than that of the exporter’s home market, or at a price lower than the goods’ cost of production. To receive an AD duty, the dumping must be proven harmful to a company or industry in the United States. The amount of the AD duty is usually calculated to offset the margin of dumping. The injury determination is made by the ITC, and the dumping margin calculated and the Order imposed by the International Trade Administration (ITA) of the DOC.
Similarly, Countervailing Duties are applicable under Section 731 of the Tariff Act of 1930 (19 U.S.C. §1673) when a foreign government provides subsidies or assistance to a local industry. This can be in the form of low-rate loans, tax exemptions, or indirect payments. The assistance provided enables these suppliers and manufacturers to potentially export and sell the goods for less than domestic companies. Countervailing duties also in most instances require a finding of injury or threat of injury to a domestic industry, made after an investigation by the ITC. The amount of the subsidy is calculated by the ITA, and a CV duty is assessed based on the value of the subsidy.
Actions taken (or not taken) under the several remedy provisions are subject to varying levels of judicial review. Remedies imposed by the President generally receive less oversight, while those imposed by the ITA and ITC have more detailed review provisions. All are also subject to review by the WTO for conformity with the international agreements, although as noted the characterization of national security (Section 232) remedies and the appropriate level of review are the subject of current challenges.
Steven W. Baker
Law Offices of Steven W. Baker
swbaker@swbakerlaw.com
Trade remedies are embodied in U. S. (and numerous other country) laws, but their use is covered by various agreements reached internationally under the World Trade Organization (WTO). These agreements allow WTO members to suspend certain obligations, most often bound tariff rates, without any retaliation by the targeted countries, provided specific conditions have been demonstrated and the required procedures have been followed. The WTO may require a country that fails to meet the conditions or follow the procedures to end its remedy actions; if that country does not to do so the WTO may authorize the targeted country or countries to impose retaliatory sanctions up to the value of any lost benefits.
Some of the most significant remedy provisions are:
Section 201 of the Trade Act of 1974 (19 U. S. C. §2251) permits the President to grant temporary import relief, by raising import duties or imposing nontariff barriers on goods entering the United States in such increased quantities that they injure or threaten to injure domestic industries producing like goods. These “safeguard” or “escape cause” actions involve an investigation and recommendations by the U. S. International Trade Commission (ITC).
Section 232 of the Trade Expansion Act of 1962 (19 U. S. C. §1862) authorizes the President, through tariffs or other means, to adjust the imports of goods or materials from other countries if it deems the quantity or circumstances surrounding those imports threaten national security. An investigation is conducted and recommendations made by the Department of Commerce (DOC). There is considerable controversy both within the U. S. and the WTO regarding what is meant by national security, and whether certain actions should be considered safeguard rather than national security actions, perhaps permitting retaliation.
Section 301 of the Trade Act of 1974 (19 U.S.C. §2411) authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts U.S. commerce. This has primarily been applied to intellectual property complaints, although other practices may be involved. Investigation is conducted by the United States Trade Representative (USTR).
Section 337 of the Tariff Act of 1930 (19 U.S.C. §1337) makes unfair methods of competition and unfair acts involving the importation and sale of certain articles in the U.S. unlawful. These actions involving patent, copyright, trademark and trade secret issues are investigated and remedies including Exclusion Orders are imposed by the ITC.
Although not generally identified by a Section number, Antidumping duties are assessed under Section 701 of the Tariff Act of 1930 (19 U.S.C. §1671) when it is determined that foreign suppliers or manufacturers are selling goods in the United States at a less-than-fair market value. Dumping occurs when goods are sold at a price less than that of the exporter’s home market, or at a price lower than the goods’ cost of production. To receive an AD duty, the dumping must be proven harmful to a company or industry in the United States. The amount of the AD duty is usually calculated to offset the margin of dumping. The injury determination is made by the ITC, and the dumping margin calculated and the Order imposed by the International Trade Administration (ITA) of the DOC.
Similarly, Countervailing Duties are applicable under Section 731 of the Tariff Act of 1930 (19 U.S.C. §1673) when a foreign government provides subsidies or assistance to a local industry. This can be in the form of low-rate loans, tax exemptions, or indirect payments. The assistance provided enables these suppliers and manufacturers to potentially export and sell the goods for less than domestic companies. Countervailing duties also in most instances require a finding of injury or threat of injury to a domestic industry, made after an investigation by the ITC. The amount of the subsidy is calculated by the ITA, and a CV duty is assessed based on the value of the subsidy.
Actions taken (or not taken) under the several remedy provisions are subject to varying levels of judicial review. Remedies imposed by the President generally receive less oversight, while those imposed by the ITA and ITC have more detailed review provisions. All are also subject to review by the WTO for conformity with the international agreements, although as noted the characterization of national security (Section 232) remedies and the appropriate level of review are the subject of current challenges.
Steven W. Baker
Law Offices of Steven W. Baker
swbaker@swbakerlaw.com
Amid Rumors of New Auto Duties, Grassley Vows Review of Presidential Tariff Authority
The Senate Finance Committee will review the statutory authority President Trump has used to hike tariffs on imports of steel and aluminum products under the chairmanship of Sen. Charles Grassley, R-Iowa. Grassley laid out his plans amid reports that Trump could soon use that authority to increase import duties on automobiles and auto parts.
In May 2018 the Department of Commerce self-initiated an investigation under section 232 of the Trade Expansion Act of 1962 to determine whether imports of automobiles (including SUVs, vans, and light trucks) and auto parts are harming U.S. national security. A DOC press release explained that auto manufacturing has long been a significant source of U.S. technological innovation and that this 232 investigation would therefore consider whether the decline of domestic automobile and auto parts production threatens to weaken the internal economy of the U.S., including by potentially reducing research, development, and jobs for skilled workers in connected vehicle systems, autonomous vehicles, fuel cells, electric motors and storage, advanced manufacturing processes, and other cutting-edge technologies.
The DOC has until Feb. 17 to conclude its investigation and submit a report to the president, though it could do so earlier. If the report finds that excessive automobile and auto parts imports are a threat to U.S. national security, and the president concurs, the president has the authority to adjust imports, including through the use of tariffs and quotas. Any such actions would be imposed within 15 days of the president’s determination to act.
Inside US Trade reports that the latest draft of the DOC’s report includes three remedy options: a blanket tariff of 20-25 percent on all autos and auto parts; “narrowly tailored tariffs on automated, connected, electric and shared (ACES) vehicle technologies;” and a third possibility somewhere between those two. However, the article also quotes Commerce Secretary Wilbur Ross as saying “we’ve been through lots and lots of drafts” of the report and gives little indication of when the report might be issued or what its conclusions might be.
In the meantime, Grassley said he plans to review Trump’s use of the Section 232 authority, which served as the basis for the 25 percent additional tariff imposed on steel and the 10 percent additional tariff imposed on aluminum in early 2018. “While I strongly agree with President Trump that we must have fair trade deals that benefit Americans,” Grassley said in a document outlining the committee’s agenda for 2019, “I do not believe that we should alienate our allies with tariffs disguised as national security protections. And certainly not when it comes to trade in automobiles and auto parts.”
Grassley added that he is also “not fond” of the Section 301 additional tariffs Trump has imposed on hundreds of billions of dollars’ worth of imports from China but does “agree with the reasons they’ve been applied.” He indicated no intent to challenge the White House’s use of this authority and instead pledged to “continue to engage with the Administration … in hopes that negotiations will result in a change in China’s discriminatory policies and practices and an easing of tariffs and tensions.”
(Photo: Andrew Harnik/AP)