USTR Extends Section 301 Tariffs Exclusions to Combat COVID-19 to September 30

The Office of the U.S. Trade Representative (USTR) has put out a notice saying it will extend Section 301 tariff exclusions on certain imports from China through Sept. 30 to support the country's ongoing efforts to combat COVID-19.

USTR announced an earlier extension of tariff exclusions for 99 medical-care and COVID-19 response product imports from China on Dec. 29, 2020.

USTR said the latest tariff exclusion extension covers these goods when entered for consumption, or withdrawn from a warehouse for consumption, at 12:01 a.m. EST on April 1 and ending at midnight EST on Sept. 30. 

 Each of the article descriptions for HTS headings 9903.88.62, 9903.88.63, 9003.88.64 and 9903.88.65 are modified by deleting "March 31, 2021," and inserting "September 30, 2021" in its place.

CBP Announces New Regional WRO on Xinjiang Cotton and Tomatoes

CBP has issued a new regional Withhold Release Order (WRO) on all cotton and tomato products grown and produced by entities operating in China’s Xinjiang province.

In it's press release, CBP indicated that it issued a Withhold Release Order (WRO) against cotton products and tomato products produced in Xinjiang based on information that reasonably indicates the use of detainee or prison labor and situations of forced labor. The agency identified the following forced labor indicators through the course of its investigation: debt bondage, restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive living and working conditions.

This WRO, which took effect January 13th, will direct CBP personnel at all U.S. ports of entry to detain cotton products and tomato products grown or produced by entities operating in Xinjiang. These products include apparel, textiles, tomato seeds, canned tomatoes, tomato sauce, and other goods made with cotton and tomatoes.

Vandegrift to Change Name to Maersk Customs Services USA, Inc.

Dear Valued Client,


As you know, Vandegrift was acquired by Maersk in 2019 and became an important part of Maersk’s global integrator of container logistics strategy here in North America.

The next natural step in this process is the rebranding of “Vandegrift – A Maersk Company” as Maersk Customs Services USA, Inc. (MCS USA) effective January 18, 2021.

This name change affirms our ongoing commitment to providing the highest levels of service, quality and expertise to our customs brokerage clients. As Maersk Customs Services USA, Inc., we will continue to provide a unified access to the vast array of resources available to support your global trade goals.

There is no need for you to take any action as a result of the name change; however, you will notice new Maersk.com email addresses for our employees. We suggest updating your contact information with the new address to ensure uninterrupted communication. In the interim, emails will be forwarded with no lapse in service.

The U.S. Customs and Border Protection division of the U.S. Department of Homeland Security has been notified at both the national and local levels and they have approved the name change. Filer code 316 will remain for entry purposes and no changes to EDI or IT integrations are necessary. If you require an updated W9 for your records, please contact your account representative.

It is truly a privilege to partner with you. Thank you for trusting us with your business and we look forward to continuing to service your customs brokerage needs as we move forward under our new name.

If you have any questions relating to the name change, please do not hesitate to contact us.

Sincerely,
Mark Zeitlin
President
Maersk Customs Services, USA, Inc.

USTR Announces Increase to Section 301 Tariffs on EU Aircraft, Alcoholic Beverages

According to a release published by the USTR last week, the United States is adjusting tariffs on certain products imported from the European Union. The U.S. was authorized in October 2019 to impose additional duties on approximately $7.5 billion in EU products as a result of the WTO Large Civil Aircraft litigation.

According to the release, the EU used trade data from a period when trade volumes were drastically reduced because of the economic implications of the coronavirus (COVID-19) pandemic, with the result that the EU was imposing tariffs on substantially more products than would have been covered if it had used a “normal period.” In response, the USTR announced that to maintain proportionality, the United States would change its reference period to the same period used by the EU, but would adjust the product coverage by less than the full amount that could be justified using the EU’s chosen time period.

The products subject to the additional U.S. tariffs include:

  • Aircraft manufacturing parts from France and Germany

  • Certain non-sparkling wine from France and Germany

  • Certain cognac and other grape brandies from France and Germany

Client Advisory CBP Issues Withhold Release Order on Seafood Harvested with Forced Labor by Lien Yi Hsing No. 12

Effective December 31, 2020, U.S. Customs and Border Protection (CBP) personnel at all U.S. ports of entry will detain tuna and other seafood harvested by the Lien Yi Hsing No. 12, a Taiwanese flagged and owned distant water fishing vessel.

CBP issued a Withhold Release Order (WRO) against Lien Yi Hsing No. 12 based on information that reasonably indicates the use of forced labor. The agency identified the following forced labor indicators through the course of its investigation: deception, withholding of wages, and debt bondage.

Federal statute 19 U.S.C. 1307 prohibits the importation of merchandise mined, manufactured, or produced, wholly or in part, by convict labor, forced labor, and/or indentured labor, including forced or indentured child labor. This WRO will require the detention at all U.S. ports of entry of tuna and any seafood harvested by the Lien Yi Hsing No. 12. CBP provides importers of detained shipments an opportunity to export their shipments or demonstrate that the merchandise was not produced with forced labor.

All WROs are publicly available and listed by country on CBP’s Forced Labor Withhold Release Orders and Findings page.

Certain China 301 Product Exclusions Extended Through March 2021

The Office of the U.S. Trade Representative will extend exclusions on goods used to treat COVID-19 from the Section 301 tariffs on goods from China, it said in a notice posted on the agency's website. “In light of the rising spread and ongoing efforts to combat COVID-19, the U.S. Trade Representative has determined that maintaining or re-imposing additional duties on certain products subject to the action no longer is appropriate and that the application of additional duties to these products could impact U.S. preparedness to address COVID-19,” it said.

The extended exclusions will apply through March 31. Nearly all other Section 301 exclusions are set to expire at the end of the year if USTR doesn't issue more extensions.

The extended exclusions will now be listed in U.S. Notes 20 (ooo), (ppp), (qqq), and (rrr) and will be filed under subheadings 9903.88.62, 9903.88.63, 9903.88.64 and 9903.88.65, respectively. Click here to see the preliminary notice to be published in the Federal Register that outlines the original exclusions in the current extension.

USTR said it also added some additional products to the list of goods covered by the exclusions. The new exclusions will be in effect as of Jan. 1 and expire March 31. The new exclusions include the following subheadings and product descriptions:
9025.19.8010
9025.19.8020
9025.19.8060
9025.19.8085
6307.90.7200
3808.94.1000
3808.94.5010
3808.94.5050
3808.94.5090
Ultrasonic scanning apparatus, each having dimensions not exceeding 122 cm by 77 cm by 127 cm, whether or not presented with transducer (described in statistical reporting number 9018.12.0000)
Blood pressure monitors suitable for use by medical professionals (described in statistical reporting number 9018.19.9530)
Anesthetic instruments and appliances suitable for use in medical or surgical sciences, and parts and accessories of the foregoing (described in statistical reporting number 9018.90.3000)
Hand soaps and hand sanitizers in the form of liquid or cream put up for retail sale, other than hand sanitizers of heading 3808 (described in statistical reporting number 3401.30.5000)
Flexible oxygen tubes, pipes and hoses presented with integrated molded connectors, of polyvinyl chloride (described in statistical reporting number 3917.33.0000)
Sacks and bags of polymers of ethylene, reclosable, qualifying as Class 1 medical devices by the U.S. Food and Drug Administration under product code NNI (described in statistical reporting number 3923.21.0030)
Aprons, of plastics, of a kind used as personal protection equipment (described in statistical reporting number 3926.20.9010)
Data input devices each with display capabilities of a kind used for magnetic resonance imaging (“MRI”) equipment, computed tomography (“CT”) equipment, intraoperative X-ray (“IXR”) equipment or patient monitors (described in statistical reporting number 8537.10.9170)
Face shields of transparent plastics, whether or not assembled (described in statistical reporting number 3926.90.9950)
Ultrasonic scanning apparatus, each having dimensions not exceeding 122 cm by 77 cm by 127 cm, whether or not presented with transducer (described in statistical reporting number 9018.12.0000).

GSP, MTB and Section 301 Tariffs Set to Expire

Several key programs and provisions are set to expire at the end of 2020. Generalized System of Preferences renewal, China Section 301 tariff exclusion extensions, and the Miscellaneous Tariff Bill were all absent from the recent 2021 Consolidated Appropriations Act.

Effective January 1, importers will be required to pay duties on merchandise that had been eligible for duty-free treatment from nearly 120 designated beneficiary countries and territories under GSP.

Additionally, starting January 1, hundreds of the Section 301 China tariff exclusions will expire, requiring importers to pay the 25% or 7.5% trade remedy tariff, as appropriate, to covered merchandise of China origin.

Lastly, all temporary duty suspensions found under Harmonized Tariff Schedule heading 9902 are expected to expire on January 1, requiring importers to pay the appropriate normal trade relations (column 1) duty rate.

We will keep you updated as trade groups continue to advocate for renewals and extensions.

EU Set to Impose $4 Billion in Tariffs on US Products

The European Union is set to impose $4 billion worth of additional tariffs on US product. Announced yesterday 11/9, the tariffs were to take effect today and reflect and additional 15% on US aircraft as well as and additional 25% on US industrial and agricultural products including, but not limited to seafood, cheese, vegetable oils, cocoa powder, chocolate, ketchup, spirits, cotton, tractors, and exercise equipment.

The US had previously imposed tariffs against the EU last year, on products including wine, cheese and single-malt whiskey, as part of a dispute over subsidies for aircraft manufacturers has been going on for 16 years.

We will continue to provide updates on this issue as new information becomes available.

Vandegrift Canada Closed Monday, October 12th for Canadian Thanksgiving

Vandegrift Canada will be closed Monday, October 12th for Canadian Thanksgiving. The office will reopen Tuesday, October 13th.

We will have after-hours service available throughout the holiday weekend, including Monday for those requiring it.

Please use the following contact information: 

After hours Phone - 416-910-9003
Email - Afterhours@vandegriftinc.com 

Email - ca-brokerage-fax@vandegriftinc.com

USTR Initiates Vietnam Section 301 Investigation

The Office of the U.S. Trade Representative (USTR) is initiating an investigation addressing two significant issues with respect to Vietnam. 

The USTR will investigate Vietnam’s acts, policies, and practices related to the import and use of timber that is illegally harvested or traded, and will investigate Vietnam’s acts, policies, and practices that may contribute to the undervaluation of its currency and the resultant harm caused to U.S. commerce. 

The investigation will be conducted under Section 301 of the 1974 Trade Act. As part of its investigation on currency undervaluation, USTR will consult with the Department of the Treasury as to issues of currency valuation and exchange rate policy.

According to the USTR, the office will issue two separate Federal Register notices next week that will provide details of the investigation and information on how members of the public can provide their views through written submissions.

USTR Issues Extensions to Exclusions for List 1 and List 2

The US Trade Representative has issued extensions to the exclusions for Chinese 301 tariff List 1 and List 2 that expired on October 2, 2020. There are 9 extensions for List 1, including 1 at the HTS level, and 28 extensions for List 2. 

These extensions will expire December 31, 2020. The latest List 1 exclusions are to be claimed under HTS 9903.88.60, and the latest List 2 exclusions are to be claimed under 9903.88.61.

Reminder Merchandise Processing Fee to Increase October 1, 2020

As a follow up to our advisory from July 29, please be reminded that US Customs & Border Protection (CBP) has increased the minimum and maximum Merchandise Processing Fees (MPF) effective October 1, 2020.

The ad valorem rate of 0.3464 percent remains the same.


The new FY2021 MPF rates are:

Minimum Merchandise Processing Fee- $27.23
Maximum Merchandise Processing Fee- $528.33
Informal Entry Merchandise Processing Fee- $2.18

More Exclusions Extended

The 7th set of exclusions to Chinese 301 duties List 1, and the 2nd set of exclusions to List 2 expired on September 20th. The US Trade Representative has issued extensions for each of these exclusions which will expire December 31, 2020. There are 62 extensions for List 1 which are to be declared under HTS 9903.88.58. There are 17 extensions for List 2 which are to be declared under HTS 9903.88.59.

There are two more sets of exclusions, one for List 1 and one for List 2, due to expire on October 2, 2020. These will be the final sets to expire. Most exclusion extensions will expire December 31st with two sets of exclusions to expire in spring 2021.

Potential Refund Opportunity of China 301 Tariffs May Be Available

A recently filed lawsuit could result in refunds of all Section 301 tariffs levied to date on List 3 and List 4A goods from China, regardless of whether or not a timely protest was filed. Importers must file their own independent claims to preserve their potential refunds.

Late last week, 3 flooring companies filed suit at the CIT challenging the Section 301 List 3 and List 4A duties. The flooring companies do not appear to have filed administrative protests with US Customs and Border Protection challenging the duties, but instead filed the case under the court’s residual basis for jurisdiction. 

Under that provision, the action has to be commenced within 2 years of the cause of action accruing. This means that since the List 3 duties went into effect on September 21, 2018, cases have to be filed by September 21, 2020.

Please contact us for more information on how you can protect your right to recover potential refunds.

Customs Extends Compliance Period for Goods from Hong Kong

U.S. Customs and Border Protection has issued a message that provides an additional 45 days for importers to comply with the new requirement that goods produced in Hong Kong be marked with “China” as the origin. 

The previous deadline for compliance was September 25, 2020. Customs has added 45 days to the compliance period for a new deadline of November 9, 2020 “in an effort to allow importers ample time to comply.” 

As a reminder, while the goods must be marked with “China” for marking purposes, the entry summary will still declare Hong Kong (HK) as the country of origin and goods are not subject to Chinese 301 duties. Commercial invoices must continue to show Hong Kong as the country of origin so that the correct declaration is made at the time of entry.

Vandegrift, A Maersk Company Corporate Headquarters Moving

We are pleased to announce that Vandegrift, A Maersk Company is moving its North American Corporate Headquarters. 

Effective Monday, August 24 the office will relocate from Clark, NJ to our new address at 180 Park Avenue, Florham Park, NJ 07932


All contacts and phone numbers will remain unchanged. We ask that you ensure all correspondence, including documents and checks that would normally be mailed to the office are sent to the new address.

Please contact your account representative with any questions regarding the new location. There will be no downtime as a result of the move.

Update on Goods from Hong Kong

U.S. Customs and Border Protection has issued an FAQ on their website concerning importing goods from Hong Kong. As mentioned in our advisory from last week, goods from Hong Kong must be marked with origin “China” effective September 25, 2020. However, at the time of entry, the country of origin will continue to be declared as Hong Kong (HK). 

This means that these goods will not be subject to Chinese 301 duties. Importers should take care that the goods are marked appropriately, yet ensure that the commercial invoices indicate the origin as Hong Kong so that the correct declaration is made on the entry summary.

Please contact Vandegrift for a full assessment of your import operation and process work flow