Weekly Trade Briefing: August 16 – 27, 2021

Trade Update • AUGUST 30, 2021

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

CIT Extends Liquidation and Repository Deadlines in Sec. 301 Case

On August 16, 2021, the Court of International Trade announced plans to extend the preliminary injunction preventing the liquidation of unliquidated entries subject to Section 301 List 3 or 4A tariffs from September 2 until October 4, 2021. At the same time, the Court also extended the August 20th deadline for CBP to create a repository for the more than 6,000 plaintiffs to submit applicable customs entries until September 3rd. Once the repository is established, CBP will be allowed to resume liquidations for duties not at issue in the case.

Consultation on Proposed New Luxury Tax

Canadians wishing to comment on a new luxury tax proposed by the Trudeau government in its last budget still have until September 30 to provide their input. The tax would apply to the sale of new luxury cars and aircraft with a retail sale price over $100,000, and new boats over $250,000. The tax would be calculated at the lesser of 20% of the value above these thresholds ($100,000 for cars and aircraft, $250,000 for boats) or 10% of the full value of the luxury car, boat, or aircraft. The tax is proposed to come into force on January 1, 2022.

Apple, Intel, Pfizer Join Section 301 Litigation Before USITC

Apple, Intel, and Pfizer joined thousands of other U.S. businesses last week in their suit against the United States government regarding Trump-era tariffs on $300 billion worth of Chinese products. This lawsuit (see above) concerns the List 3 and List 4 tariffs imposed on Chinese goods under Section 301 of the Trade Act of 1974. First brought by HMTX Industries LLC in September 2020 and initially targeting just List 3 tariffs, the lawsuit has since grown in size, expanding to include List 4 tariffs and was joined by major companies such as Ford, Tesla, and Walgreens.

Steel Importers Want Full Federal Circuit to Limit Presidential Authority

A group of plaintiffs led by Transpacific Steel LLC filed a petition last week with the U.S. Court of Appeals for the Federal Circuit, requesting a rehearing by all the Federal Circuit judges (en banc) of the 2-1 decision earlier this year reversing the prior CIT ruling that former President Trump violated the provisions of Section 232 of the Trade Expansion Act of 1962 by hiking tariffs on steel imports from Turkey beyond those previously implemented under an earlier presidential proclamation. The steel importers contend that the panel overlooked or misapplied the law and its resulting decision “disregarded important statutory provisions in Section 232, reducing them to irrelevance.”

Trade Court Strikes Down Expedited Duty Reviews

Following a challenge by a group of U.S. lumber producers (Committee Overseeing Action for Lumber International Trade Investigations aka COALITION), the Court of International Trade on August 18 struck down a decades-old rule allowing foreign producers to quickly obtain lower countervailing duty rates, provided they weren’t part of the original investigation. The ruling reinstates higher duties for several Canadian lumber companies that had been excluded from a CVD order, although it will apply only prospectively. Should the remand results be sustained after all appeals, Commerce will cease conducting expedited reviews in CVD investigations — a WTO requirement — as it lacks the proper authority to do so, according to the CIT.

USTR Increases FY21 Sugar Tariff-Rate Quota

The USTR on August 26 announced that it was increasing the lower-tariff sugar import quota for fiscal year 2021 by 90,100 metric tons raw value (MTRV) as the U.S. government attempts to boost short-term supplies in the domestic market. The increase is in addition to the 1,117,195 MTRV is committed to under WTO agreements and follows a reallocation in July to account for supply shortfalls by some original license holders. The USTR has also extended the FY 2021 raw cane sugar TRQ through Oct. 31, a month later than usual.

CBP Extends Section 321 Data Pilot

CBP has announced a two-year extension of its Section 321 data pilot, through August 2023. “CBP will extend the test for another two years to continue further evaluation of the 321 Data Pilot program and the risks associated with section 321 shipments,” according to the Federal Register notice. CBP launched the pilot in 2019 as part of a larger strategy around e-commerce aimed at addressing potential risks posed to U.S. consumers by a growing volume of imported small parcels, including counterfeit goods and potentially harmful food products.

CBSA Preliminary Determination: Small Power Transformers from Austria, Taiwan & South Korea

On August 27, the Canada Border Services Agency made a preliminary determination of dumping respecting certain small power transformers from Austria, Taiwan, and South Korea. The subject goods are usually imported under tariff items 8504.22.00.20 or 8504.23.00.00. Provisional duties up to 78.4% will now be payable on the subject goods from the aforementioned countries that are released from the CBSA on or after August 27, 2021. The Canadian International Trade Tribunal had previously made a preliminary determination of injury concerning the goods in question on June 14, 2021.

Canada Joins Mexico in Seeking Consultation with U.S. Over USMCA Content Rules

Mexico’s economy minister Tatiana Clouthier said on Friday that Canada has joined its request for a formal consultation with the United States over the interpretation of content rules for automobiles set out in the USMCA. Since the deal went into effect, the U.S. has interpreted provisions on how regional content should be calculated differently from what Mexico and Canada contend was originally agreed upon by the three countries. On August 20, Mexico requested formal consultation with the USTR over the interpretation and application of tougher content rules, specifically with respect to treatment of the so-called “roll-up” provision when accounting for non-originating parts in the calculation of regional value content.