USTR Finalizes Tariffs on $200 Billion of Chinese Imports
 
Please see below announcement from the Office of the United States Trade Representative. As to how this will be applied, instructions received are that CBP is to use the date of when the conveyance arrives at the first US port, even when an in-bond movement is involved. Entries can be filed before the freight arrives, so entry can have a file date before the implementation date, but if the actual conveyance arrival is after the effective date then the duties apply.
 
Washington, DC – As part of the United States’ continuing response to China’s theft of American intellectual property and forced transfer of American technology, the Office of the United States Trade Representative (USTR) today released a list of approximately $200 billion worth of Chinese imports that will be subject to additional tariffs.  In accordance with the direction of President Trump, the additional tariffs will be effective starting September 24, 2018, and initially will be in the amount of 10 percent.  Starting January 1, 2019, the level of the additional tariffs will increase to 25 percent.
 
The list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018.  Changes to the proposed list were made after USTR and the interagency Section 301 Committee sought and received comments over a six-week period and testimony during a six-day public hearing in August.  USTR engaged in a thorough process to rigorously examine the comments and testimony and, as a result, determined to fully or partially remove 297 tariff lines from the original proposed list.  Included among the products removed from the proposed list are certain consumer electronics products such as smart watches and Bluetooth devices; certain chemical inputs for manufactured goods, textiles and agriculture; certain health and safety products such as bicycle helmets, and child safety furniture such as car seats and playpens.
 
In March 2018, USTR released the findings of its exhaustive Section 301 investigation that found China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden or restrict U.S. commerce.
 
Specifically, the Section 301 investigation revealed:
 

• China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
• China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
• China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
• China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.

 
 
After separate notice and comment proceedings, in June and August USTR released two lists of Chinese imports, with a combined annual trade value of approximately $50 billion, with the goal of obtaining the elimination of China’s harmful acts, policies and practices.  Unfortunately, China has been unwilling to change its policies involving the unfair acquisition of U.S. technology and intellectual property.  Instead, China responded to the United States’ tariff action by taking further steps to harm U.S. workers and businesses.  In these circumstances, the President has directed the U.S. Trade Representative to increase the level of trade covered by the additional duties in order to obtain elimination of China’s unfair policies.  The Administration will continue to encourage China to allow for fair trade with the United States.
 
A formal notice of the $200 billion tariff action will be published shortly in the Federal Register.
 
The final tariff list:
https://ustr.gov/sites/default/files/enforcement/301Investigations/Tariff%20List_09.17.18.pdf

Strike Notice for Canadian Ports Issues by International Longshore & Warehouse Union
 
Dear Customers,
 
The following information has just been received from the Canadian International Freight Forwarders Association (CIFFA). A strike could affect the containerized shipments loaded on vessels calling the two terminals operated by GCT Canada – Deltaport and Vanterm. BOC will keep you posted  on any further developments.
 
CIFFA learned yesterday (September 4) that the first agreement negotiations between GCT Canada, which operates two container terminals in Port of Vancouver, and ILWU 502 representing planners and planning assistants, “have ended with significant gaps remaining between the parties. As such, ILWU 502 issued strike notice on September 3, 2018.”
 
GCT Canada said it was committed to working with ILWU Local 502 to negotiate the first collective agreement for its Planners in order to continue an effective working relationship and ongoing operational stability.
 
Global Container Terminals has advised as follows:
 
“If the Planners and Assistant Planners commence a strike, as they have notified GCT and the Federal Minister of Labor that they will, on September 7th at 0001, GCT Canada will have no option but to suspend all of its terminal operations in GCT Deltaport and GCT Vanterm due to the essential nature of this function. This would have a direct impact on all parties who rely on our terminal services to get their products to different international markets.
 
As a result, GCT has commenced the necessary planning and will work closely with our customers, the Vancouver Fraser Port Authority, and stakeholders for safe and efficient shut down of our Vancouver terminal operations.”
 
CIFFA has written a letter to the federal government urging that it “use all the tools at its disposal in bringing negotiations to a successful and rapid conclusion, whether through mediation, binding arbitration or any other means.”
 
The letter was sent today to the Minister of Employment, Workforce Development, and Labor, the Minister of Transport, the Minister of International Trade, and the Minister of Public Services and Procurement and Accessibility.
 
The content of the letter will be available on the CIFFA site.
 
This situation could change quickly and the association will endeavor to keep membership advised as information becomes available.
 
Thank you,
Kind Regards

Trans-Pacific Service VOID Sailings
Please be advised ONE will implement the following VOID sailings, in alignment with THE Alliance member lines.

*Upon PS4 VOID sailing, Kaohsiung will be covered by PS7 service vessel the MOL Beauty 025E/W with the rotation change as follows: Xiamen, Hong Kong, Yantian, Kaohsiung, Long Beach, Oakland, Kaohsiung.
The subsequent voyages for these services will be as per the published schedule.
We regret the inconvenience caused and thank you for your understanding in this regard. Should you have any questions or concerns, please contact your sales account representative for additional information.
Sincerely,
Ocean Network Express Pte. Ltd.
APL
APL Golden Week Blank Sailings

Maersk
Maersk Line Gold Week Blank Sailings

BOC International is closed for the US Holiday, Labor Day, on Monday September 3

Port Conditions, Asia
Shanghai: Heavy congestion in all SIPG terminals continue – waiting 3-3.5 days for a berth after port was closed for 57hrs due to bad weather
Qingdao: Increased congestion – waiting time around 1-1.5 days. Pot closed 66hrs last week
Ningbo: Heavy congestion – currently 1-1.5 days waiting for a berth – Port closed for about 69hrs
Dalian:  Moderate congestion comes up due to the port being closed for 96hrs last week due to strong winds and rough seas
Lianyugang: Severe congestion appears this week, the port was closed for 90hrs last week, vessels can expect up to 3-4 days for a berth
Xingang:  Port was closed for 11hrs last week, but port productivity situation remained normal
Manila: Manila South & North port still experiencing congestion , 15 vessels currently waiting for a berth at Manila North and 6 vessels waiting for a berth at Manila South. Terminal CY’s also heavily over capacity which leads to delays of empty returns and use of  external ICD’s a “must”
Bangkok: Berth waiting time continues to be approx. 1 day
Japan:  Nagoya Port is likely to be affected by Typhoon Cimaron on 23rd Aug
Korea:  Port operation is normal at present, however Typhoon SOULIK will shut the ports now for approx. 24–36 hours

CBP Increases MPF Effective October 1, 2018
U.S. Customs Border Protection has announced a 2.151 percent increase of the merchandise processing fee (MPF) effective October 1, 2018 for fiscal year 2019. The assessed rate of .3464 percent of the entered value of merchandise does not change, the minimum and maximum limitations for the MPF have changed. Please find the changes below.

• Formal entry minimum increases from $25.67 to $26.22
• Formal entry maximum increases from $497.99 to $508.70
• Informal entry electronically transmitted to CBP increases from $2.05 to $2.10
• Informal entry manually submitted to CBP increases from $6.16 to $6.29

Additional information can be found through this link:
https://www.gpo.gov/fdsys/pkg/FR-2018-08-01/pdf/2018-16510.pdf

Port Conditions, Asia
Qingdao:     Heavy congestion continues – waiting 1.5-2 days for a berth after the port was closed for 30.5 hours due to bad weather.

Shanghai:    Increased congestion – waiting time 2-2.5 days. TS (Tropical Storm) RUMBIA caused some issues with the draft in the channel, restricting  vessel access and berthing.

Ningbo:       Heavy congestion – at least 2 days waiting for a berth – Port closed for about 59hrs, being affected by TS YAGI and RUMBIA.

Shantou:     Moderate port congestion. Vessels out of window will delay at least 0.5-1 day.

Penang:     Moderate congestion, low productivity due to crane maintenance, berth waiting time is around 0.5 day.

Manila:        Manila South & North port still experiencing congestion – delays of 3-4 days even for vessels on window. The CY’s at the port are also heavily over capacity which leads to delays of empty returns and use of external ICD’s a “must”.

Bangkok:     Berth waiting time continues to be approx. 2 days

Jakarta:       Port congestion has eased, but due to ongoing low productivity in port, waiting 0.5 to 1 day for a berth for ships arriving off window.
 
Surabaya:    Port congestion moderate due to low productivity in port, waiting 1 to 1.5 days for a berth for ships arriving off window.

CBP Increases MPF Effective October 1, 2018
U.S. Customs Border Protection has announced a 2.151 percent increase of the merchandise processing fee (MPF) effective October 1, 2018 for fiscal year 2019. The assessed rate of .3464 percent of the entered value of merchandise does not change, the minimum and maximum limitations for the MPF have changed. Please find the changes below.

• Formal entry minimum increases from $25.67 to $26.22
• Formal entry maximum increases from $497.99 to $508.70
• Informal entry electronically transmitted to CBP increases from $2.05 to $2.10
• Informal entry manually submitted to CBP increases from $6.16 to $6.29

Additional information can be found through this link:
https://www.gpo.gov/fdsys/pkg/FR-2018-08-01/pdf/2018-16510.pdf

China Tariff List Two – Effective Date and Rate announced
Please find the following attachments, for your reference:

1. List 1 (25%, effective July 6th, 2018) Click here 
2. List 2 (25%, effective August 23rd, 2018) Click here
3. Form to Request Exclusion of Product.  Click here– Instructions and form for how to apply for an exclusion to List 1 and List 2 tariffs. Note that the information provided will become publicly available and viewable for comment for a period of 14 days. Decisions on exclusions are anticipated to take some time to process, but would be retroactive, if granted. Generally speaking, it appears that importer must show that equivalent domestic goods are not available, not of sufficient quality, or that imposition of tariffs would cause ‘severe economic harm’ to either the requestor or the US as a whole. Further guidance and decision making criteria has not yet been made available.

Note: an application for exclusion can only be made for the effective List 1 and List 2 tariffs, NOT yet for List 3. It is anticipated that, like List 1 and List 2, a similar request for exclusion process will become available upon final announcement. We will forward at that time.
NOTE: List 3 – proposed 10% or 25%, no final rate or effective date announced yet – comment period extended through September 5th 2018

Important Sect 301 China Tariff Update

In the most recent and concerning developments in the “China Tariff War”, yesterday President Trump instructed the US Trade Representative’s office to consider a proposal to raise the proposed duty on products included on Section 301 List 3 from 10% to 25%.
As many know, “List 3” includes over 6,000 HTS line items including items from virtually every HTS chapter.
Many companies with products falling on List 3 were concerned with an increase of 10%.  However, an increase of 25% could have serious consequences for these companies.
There is no definitive decision on whether this will move forward.  However, the public comment period for the 301 List 3 has now been extended from August 30 to September 5.  In addition, the deadline to request to appear at the public hearing has been extended to August. 13.
The requirements for filing public comments were published in the Federal Register on July 17.  If you need a copy, please contact the office.
The USTR notice will be published in the Federal Register, likely in the next few days.
USTR Rpresentative Lighthizer’s statement is below:
“On June 18, the President directed me to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent, in response to China’s decision to cause further harm to U.S. workers, farmers, and businesses by imposing retaliatory duties on U.S. goods.  I initiated this process on July 10.
“This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent.  The 25 percent duty would be applied to the proposed list of products previously announced on July 10.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition.  We have been very clear about the specific changes China should undertake.  Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.
“The increase in the possible rate of the additional duty is intended to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens.
“The United States has joined forces with like-minded partners around the world to address unfair trade practices such as forced technology transfer and intellectual property theft, and we remain ready to engage with China in negotiations that could resolve these and other problems detailed in our Section 301 report.”
Interested parties may address this possible increase in the level of the additional duty in their comments on the proposed action.  The proposed list and process for the public notice and comment period is set out in the Federal Register notice issued on July 10 and published in the Federal Register on July 17.  To view the July 17 notice, including the list of proposed products to be subject to additional duties, click here.  In light of the possible increase of the additional duty rate to 25 percent, the close of the written comment period is extended from August 30 to September 5, and the due date for requests to appear at the public hearing is extended to August 13.  These modifications to the comment period will be set out in a notice to be published shortly in the Federal Register.
In addition, the public comment period for products on List 2 closed last week.  This list is under final review by the USTR’s office and could be published at any time now.   The products on this list are subject to 25% duty.  Keep in mind that this process could move very quickly.
If you have questions or need assistance with any of the Section 301 tariff issues, please contact our office.

Paula M. Connelly, Esq.
Law Offices of Paula M. Connelly
100 Trade Center
Suite 660
Woburn, MA 01801
781-897-1771
www.connellycustomslaw.com
Paula M. Connelly is a principal in the Law Offices of Paula M. Connelly, a law firm specializing in Customs and international trade matters. She has been practicing law since 1991 and prior to working as an attorney, worked as a licensed Customs broker for several customs brokerage companies in the Boston area. She has over 20 years experience in Customs and International Trade matters and works with numerous importers and exporters in addressing and resolving import and export compliance issues.