U.S. Trade Round-Up: Latest Updates

Trade Update • Jan, 8, 2025

weekly roundup of U.S. news reports, government announcements, and other information about current and emerging developments in international trade and customs compliance.

USTR Initiates Section 301 Investigation Targeting China’s Semiconductor Industry Dominance.

The United States Trade Representative (USTR) has launched a Section 301 investigation into China’s policies and practices targeting dominance in the semiconductor industry. This investigation will focus on foundational semiconductor manufacturing and its impact on critical industries such as defense, automotive, and telecommunications, as well as the production of silicon carbide substrates used in semiconductor fabrication. USTR cited concerns over China’s use of anticompetitive and non-market strategies that undermine U.S. economic security, supply chain resilience, and the competitiveness of American industries.

Public comments on the investigation will be accepted starting January 6, 2025, with a hearing to follow, as part of the Biden-Harris Administration’s broader effort to safeguard American workers, businesses, and supply chains.

Submit your comments through the USTR comments portal here.

Full details can be accessed in USTR’s formal notice here.

Mexico Will Apply New Import Duties on the IMMEX Program

The Mexican government has introduced a decree imposing substantial import duties to strengthen IMMEX (Manufacturing, Maquiladora, and Export Services) program compliance and protect the domestic textile industry. Signed and enforced on December 19, 2024, the decree, led by Minister of Economy Marcelo Ebrad under President Claudia Sheinbaum’s directive, increases duties by 15% on 17 MXHTS codes from Chapters 52, 55, 58, and 60, and 35% on 138 MXHTS codes from Chapters 61, 62 (e.g. pants, dresses, coats, gloves, belts, etc.), 63 (e.g. blankets, pillow cases, towels, etc.), and 94.

The new regulations will impact U.S. e-commerce businesses that depend on the IMMEX program. These companies often leverage Mexican warehouses to benefit from lower labor costs and duty-free re-export of goods to the U.S. by utilizing the de minimis provision under Section 321. This exemption permits shipments valued at $800 or less per customer per day to enter the U.S. without incurring duties.

The changes target companies failing to comply with IMMEX requirements, citing violations like non-exportation of temporarily imported goods, which have led to significant economic losses, including 79,000 textile job cuts in 2024 and a 4.8% annual GDP reduction. Aimed at safeguarding 400,000 textile jobs, the decree expands import restrictions on IMMEX. participants and seeks to protect the economy, boost local industry, and combat unfair practices, including contraband and tax evasion. Note: The change won’t apply to countries with which Mexico has signed a Free Trade Agreement, such as the USMCA (United States-Mexico-Canada Agreement).

Changes Made to AD/CV Regulations

The International Trade Administration (ITA) has finalized a rule, effective January 15, 2025, introducing significant updates to antidumping (AD) and countervailing duty (CV) regulations. Key changes include revisions to cash deposit requirements, AD duty rates in non-market economy (NME) proceedings, and methodologies for calculating “all others” rates. The rule also refines criteria for selecting respondents, addresses subsidy attributions, and outlines processes for sharing business proprietary information with U.S. Customs and Border Protection in cases of negligence or fraud.

Notable adjustments impact NME practices, including separate rates for entities based on government ownership, the selection of economically comparable countries, and methodologies for calculating constructed value. These changes are expected to lead to higher AD/CV duties, particularly for imports from China and other NMEs.

Full details can be accessed in the Federal Register’s ruling notice here.

eFiling Final Rule for Certificates of Compliance

The U.S. Consumer Product Safety Commission (CPSC) has approved a Final Rule mandating electronic filing (eFiling) of Certificate information for regulated, imported consumer products and revising compliance certificate requirements. This rule, which takes effect 18 months after its Federal Register publication (24 months for products in Foreign Trade Zones), aims to modernize product inspections, improve targeting of high-risk imports, and reduce hold times for compliant importers.

By requiring importers to eFile key compliance data at entry, such as product identification and testing details, the program enhances efficiency and safety oversight. Informed by years of pilot testing, the rule also includes provisions for private labeler certifications and aligns certificate rules with existing standards. CPSC is supporting industry adoption through extensive educational resources and engagement initiatives.

Full details can be accessed in the CPSC news release here.

Wood Packaging Material Checklist for Foreign Shippers

Customs and Border Protection (CBP) in coordination with the Animal and Plant Health Inspection Service (APHIS), have prepared a Wood Packaging Material (WPM) checklist for stakeholders and their supply chain. The intended purpose of the checklist is to provide guidance to foreign exporters/shippers on how to check WPM compliance before it is shipped to the U.S.

Access this Wood Packaging Material Checklist here.

FDA Mandates Intended Use Codes for Additional Commodities

The U.S. FDA has released an update to the Supplemental Guide (SG) in the “Draft Chapters: Future Capabilities” section. Key updates include mandatory Intended Use Codes (IUC), affecting cosmetics, food contact substances, pharmaceutical necessities, and veterinary medical devices.

Important for importers and customs brokers, the agency is making Intended Use Codes (IUC) mandatory for the following commodities:

• Cosmetics (Program Code COS)
• Ceramicware and other food contact substances (Program/Processing Code FOO/CCW)
• Pharmaceutical Necessities, Containers, Inactive Pharmaceutical Ingredients and Excipients (Program/Processing Code DRU/ PHN)
• Veterinary medical devices (Program/Processing Code VME/ADE)

In addition, the following changes are included in the DRAFT SG:

• IUC 110.000 has been added for Human Drugs (Program Code DRU and Processing Code PRE (prescription) and OTC (over the counter)).
• Medical Devices IUC 170.000; Affirmation of Compliance IFE is no longer required.

These changes aim to enhance data quality, with validation updates aligning human and animal food IUCs to the SG. Expected deployment dates are December 16, 2024, for ACE CERTIFICATION and no earlier than February 1, 2025, for PRODUCTION.

Full list of IUC for ACE can be found here.

AD/CV Duties Determination on Aluminum Containers from China

The U.S. Department of Commerce has preliminarily determined that disposable aluminum containers, including pans, trays, and lids, imported from the People’s Republic of China are being sold in the United States at less than fair value.

Products affected are currently classified under HTSUS 7615.10.7125 and may also be entered under HTSUS 7612.90.1090, 7615.10.3015, 7615.10.3025, 7615.10.7130, 7615.10.7155, 7615.10.7180, and 7615.10.9100.

With an estimated average dumping margin of 193.90% for most producers and 287.80% for the China-wide entity, Commerce has recommended cash deposits and suspension of liquidation for the affected imports. Interested parties are invited to comment on this preliminary finding, with final determinations pending further analysis.

Full details can be accessed in the Federal Register’s ruling notice here.