Weekly Trade Briefing: July 12-16, 2021

Trade Update • JULY 16, 2021

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

CBP Changes Stance on Classification of Certain Steel Beverage Containers

CBP recently revoked several previous rulings which had classified double-walled insulated stainless steel beverage containers with a vacuum between the two walls in heading 7323, specifically in subheading 7323.93.00 (i.e., table kitchen and other household articles of iron or steel). It had previously been thought that the lack of an outer wall precluded classification in heading 9617, but a subsequent review by CBP determined this was in error. CBP’s position now is that such goods are properly classified under subheading 9617.00.10, HTSUS, which provides for “Vacuum flasks and other vacuum vessels, complete with cases; parts thereof other than glass inners: Vessels: Having a capacity not exceeding 1 liter.”

U.S. Adds 34 Technology Companies to Entity List

On Monday, the Bureau of Industry and Security added 14 companies based in China and 20 companies located elsewhere to the U.S. Entity List. According to Commerce, the Chinese companies are involved in China’s “campaign of repression, mass detention, and high-technology surveillance” against Uyghur and other minorities in Xinjiang. Five other entities were added for directly supporting the Chinese military. The remaining 15 entities were added to the list for facilitating shipments to Iran and Russia.

Coalition of Industry and Trade Groups Urges USTR to Avoid Section 301 Tariffs on Vietnam

More than 70 business groups and industry associations from nearly every sector are calling on the Biden administration not to impose tariffs stemming from Section 301 investigations on Vietnam’s timber and currency practices. In a letter to the USTR, the coalition of business groups, argue that the imposition of tariffs on goods from Vietnam would undermine American businesses’ competitiveness and result in retaliatory tariffs on U.S. exports. Vietnamese imports to the U.S. have jumped substantially in recent years due in part to Sec. 301 tariffs imposed on goods from China. The U.S. and Vietnam have been consulting on the currency and timber issues over the past few months and held a meeting last week.

European Commission Proposes New Carbon Border Adjustment Tax

The European Commission on Wednesday released its proposal for a carbon border adjustment tax that it insisted will be compatible with WTO rules. The new policy would place a fee on certain carbon-intensive imports based on costs the EU already imposes on domestic industry, to be phased in over a 10-year period. The mechanism would initially apply to cement, iron and steel, aluminum, fertilizers, and electricity generation. While the Biden administration has also been considering taxing imports for their carbon content, John Kerry, the U.S. climate envoy, said that Europe s proposed carbon border tax has serious implications for economies and trade and described it as a “last resort” tool. Critics have also warned that such a measure could result in additional trade barriers.

Crocs Files Infringement Suits Against 21 Companies

Footwear maker Crocs, Inc. announced that it has filed lawsuits against 21 companies alleging infringements of its registered trademarks. The lawsuits, filed in various U.S. District Courts around the country, seek monetary damages for violations of certain intellectual property relating to Crocs’ “three-dimensional trademark rights.” The latest filings follow a June 2021 complaint filed by Crocs with the U.S. International Trade Commission that seeks to block the importation and subsequent sale of products into the U.S. that infringe on the same rights (the ITC has since launched an investigation).  A similar complaint made in 2006 resulted in the ITC issuing a general exclusion order barring the importation of products infringing its patent rights.

Union Pacific Suspends Inbound International Container Shipments to Chicago for a Week

On Thursday, Union Pacific railroad announced that it will halt the movement of international cargo from the West Coast to its Global IV intermodal terminal in Chicago for a week, beginning Sunday, July 18th. The railroad hopes that the weeklong pause will allow it to clear the thousands of containers that have backlogged as a result of labor shortages, pandemic restrictions, and a lack of pooled chassis.  Importers should therefore expect West Coast dwell times to worsen and transit times to lengthen for cargo that has not yet loaded to the rail.

WTO Chief Hails Effort to Reach Global Fish Subsidies Deal

World Trade Organization Director-General Ngozi Okonjo-Iweala on Thursday said she was optimistic about clinching a long-awaited deal to stop overfishing, despite objections from some developing countries that parts of the draft agreement are “unjust.” Her comments came following a virtual meeting of trade ministers that was convened to advance decades of talks aimed at fixing rules to curb harmful subsidies that lead to overfishing amid falling stocks. In a statement, USTR Katherine Tai said there are still “important deficiencies” in a draft agreement and urged other members to ask themselves whether it “reflects the best that we can do.”