Monday Morning eBriefing

Two recent Headquarters' rulings have addressed the impact of China Section 301 duties on tool kits classifiable under subheading 8206.00.00, HTSUS. In the rulings, HQ H304235 (July 30, 2019) and HQ H301769 (April 10, 2019), Customs determined that such tool kits are subject to a double hit of China Section 301 duties.

Long-time lobbyist for the NCBFAA, Jon Kent has announced that he will retire before the end of the year. Jon has served the NCBFAA and our members for the better part of 40 years, and his presence, guidance and expertise will be greatly missed.

On Friday of last week, the Office of the United States Trade Representative (USTR), in response to China's announcement of additional tariffs on $75 billion worth of American Goods, said that the United States would increase existing tariffs on Chinese goods by 5%. According to the release, For the 25% tariffs on approximately $250 billion worth of Chinese imports, USTR will begin the process of increasing the tariff rate to 30%, effective October 1 following a notice and comment period. For the 10% tariffs on approximately $300 billion worth of Chinese imports that the President announced earlier this month, the tariffs will now be 15%, effective on the already scheduled dates for tariff increases on these imports.

In the August 14 edition of the Federal Register, U.S. Customs and Border Protection (CBP) has issued a proposed rule amending Section 116 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) that would establish identity collection criteria and create a required verification process of the importer and nonresident importer client. CBP is requiring all brokers obtain, at a minimum, the following information from their clients:

Announced via CSMS on August 7, U.S. Customs and Border Protection (CBP) has released instructions for how to submit entries that contain products granted exclusions from Section 302 duties. Instructions for submission are as follows:

NCBFAA submitted comments last week in response to a July 10 Federal Register notice asking for comments on ways to combat counterfeit and pirated goods trafficking, particularly in e-commerce. The notice is part of an interagency review pursuant to the President's April 3, 2019, Memorandum on Combating Trafficking in Counterfeit and Pirated Goods.

On July 22, the NCBFAA filed comments on the Department of the Treasury's Office of Foreign Assets Control (OFAC) interim final rule that makes changes to the agency's Reporting, Procedures and Penalties Regulations.

In lieu of flowers, donations can be made in Wayne Wagner's memory to Saint John's Health Center Foundation, 2121 Santa Monica Boulevard, Santa Monica, CA 90404. Please write on your check that this gift supports JWCI - Research Oncology Urology Fund - in honor of Wayne Wagner, Jr., and make checks payable to Saint John's Health Center Foundation. You can also make a gift over the phone by calling Meghan Chereck at (310) 829-8394, or online at https://www.saintjohnscancer.org/make-a-donation/contact-us-donation-form/.

It is with great regret that we inform you that Wayne Wagner unexpectedly passed away on Monday, July 8th. Wayne started his career at Tower Group 35 years ago, which became FedEx Trade Networks in 2001. Wayne most recently served as the Senior Manager of Brokerage Services but had many roles in the company including General Manager of the Southwest Region. Wayne was a licensed Customs Broker, a Certified Customs Specialist and held a Bachelor of Arts degree from Whittier College in California.

The rumors that you may have heard concerning a change in the process for registering an NVOCC's bill of lading in the PRC appear to be accurate. The NCBFAA has been advised that the Ministry of Transportation for the PRC issued regulations that formally cancel all existing registrations for NVOCC bills of lading and has instituted in its place a very simple process by which each NVOCC's agent in the PRC can quickly submit the necessary registration data through an online registration process.

Last week, Acting Commissioner of U.S. Customs and Border Protection (CBP) John Sanders resigned his post effective July 5. Sanders was designated Acting Commissioner after former Commissioner Kevin McAleenan left to become Acting Secretary of Homeland Security (DHS) on April 15.

It's hard to think of a time that has been more unsteady or uneasy when it comes to all matters of trade. From Section 301 tariffs going into effect through the fall of 2018; to additional tariff threats on China (potential Tranche 4), Canada, Mexico and the EU; immigration impacts at the border with Mexico; and ongoing discussions on the USMCA, these certainly are uncertain times in our history.

In Thursday's U.S. Customs and Border Protection (CBP) conference call, the agency provided the Trade with an update on southern border operations and the current state of the USMCA agreement.

It's that time of year again! In just a few short months, NCBFAA members from across the country will gather in Washington, D.C. for NCBFAA's 2019 Government Affairs Conference to help shape and grow the future of our industry by learning about the numerous legislative and regulatory issues that are confronting our industry! Make your voice heard by engaging with your Representatives and persuading them to become more actively involved in addressing these issues.

25% tariffs are now in place on $200 billion of Chinese goods. China has in turn retaliated with tariffs on $60 billion of U.S. products. And we have chosen to up the pressure. Still, no talks are currently scheduled between U.S. and Chinese negotiators. Panelists at a Washington International Trade Association event on Wednesday were not optimistic about the prospects for a quick end to the dispute. US-China Business Council Senior Vice President Erin Ennis said that the "prudent" course was to plan on higher tariffs going into effect on most remaining products from China. A slim possibility exists that President Trump and President Xi Jinping could yet strike a deal when they meet at the June in Osaka, Japan for the G-20 summit. However, there is no indication that the groundwork for such a breakthrough is being laid. In fact, in recent weeks, China has dug in its heels, while at the same time the Trump Administration has shown no sign of softening its stance.

U.S. Customs and Border Protection (CBP) held their weekly conference call with the Trade last Thursday afternoon to discuss the ongoing migrant crisis at the southern border and the impact it's having on the movement trade.

Announced late on Friday, the United States stated it would lift its steel and aluminum tariffs on Canada and Mexico within two days. These tariffs, which have been in place since March 2018, may signal a sooner, rather than later, passing of the United States-Mexico-Canada Agreement (USMCA).

Published in the FEDERAL REGISTER on May 9, 2019, the Office of the United States Trade Representative (USTR) has announced an increase in trade-remedy tariffs. The previously twice-delayed increase in trade-remedy tariffs assessed on products of Chinese origin pursuant to Section 301 Tranche 3 or List III will now be implemented. The notice provides for a two-part effective date and brokers need to consider the export and entry dates. The notice reads in part, "Effective with respect to goods (i) entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 10, 2019, and (ii) exported to the United States on or after May 10, 2019...". For goods meeting both qualifications, the trade-remedy tariff will increase from 10% to 25%. Thus, goods exported to the United States from China prior to May 10, 2019, will not be subject to the higher rate of duty.

Two years ago, the NCBFAA worked with the US Coast Guard (USCG) to challenge the attempts of the ocean carriers that would have required NVOCCs and shippers to provide a Verified Gross Mass (VGM) Certificate to the carriers in advance of tendering cargo. As you may recall, the VGM issue arose due to efforts by the International Maritime Organization (IMO), after several vessels capsized for unknown reasons, to adopt a method that would provide greater certainty about the weight of containers being loaded on vessels.

In their April 24 conference call, U.S. Customs and Border Protection (CBP) provided the trade with an update to the current state of southern border port operations. As a reminder, the NCBFAA is asking that if you have any questions for CBP that you would like to see answered in an upcoming call, please let us know and we will do our best to have them answered.