Us Trade Act Compliance: Are Your Imports Tariff and Duty Compliant?

Section 301 tariffs apply to Chinese imports at rates from seven and a half to twenty-five percent. Section 232 national security tariffs impose twenty-five percent on most steel and ten percent on most aluminum from countries without a negotiated exclusion arrangement.

Section 301 tariffs were imposed following USTR investigations into China's unfair trade practices and apply at seven and a half percent on List 1 goods, twenty-five percent on List 2 and List 3 goods, and seven and a half to twenty-five percent on List 4A goods based on the specific HTS subheading. An importer may apply for a product exclusion by demonstrating to USTR that the product is unavailable from domestic or non-Chinese sources, the tariff causes severe economic harm, and the exclusion is in the public interest, and approved exclusions are retroactive to the date of the request.

Trade tariffs and international sanctions and trade tariffs counsel can advise on the Section 301 rates and exclusion criteria, assess whether an exclusion application or product reclassification is available, and develop the Section 301 cost mitigation and exclusion strategy.

Section 232 tariffs were imposed by presidential proclamation following Commerce findings that steel and aluminum imports threatened national security, applying twenty-five percent on most steel articles and ten percent on most aluminum articles from countries without a tariff-rate quota or exclusion agreement. An importer may apply to Commerce for a product-specific exclusion by demonstrating the article is not produced domestically in sufficient quantity or quality, but domestic producer objections may cause denial even when the application is otherwise meritorious.

Trade remedies and customs law counsel can advise on the Section 232 rates and exclusion process, assess whether a product exclusion request or alternative supply strategy is available, and develop the Section 232 compliance and cost mitigation strategy.

An importer of AD/CVD-covered merchandise deposits estimated duties at the applicable rate at entry, and actual liability is not determined until CBP liquidates the entry following an annual administrative review by the Department of Commerce. The importer should obtain scope rulings when the covered merchandise description is ambiguous, monitor each administrative review to anticipate rate changes, and consider a first-sale valuation strategy to reduce dutiable value where permissible.

Anti-dumping duty and countervailing duties counsel can advise on the AD/CVD orders applicable to the company's imports, assess the deposit rate, scope, and circumvention risk, and develop the compliance, scope ruling, and annual review strategy.

The UFLPA, enforced by CBP beginning in June 2022, creates a rebuttable presumption that goods with any supply chain nexus to Xinjiang or an entity on the UFLPA Entity List were produced with forced labor and are inadmissible under 19 U.S.C. Section 1307. An importer seeking rebuttal must provide CBP with clear and convincing evidence including a supply chain mapping document tracing each input from raw material through final manufacture, third-party audit reports, and documentation of supplier engagement and remediation.

Supply chain disruptions and customs compliance and enforcement counsel can advise on the UFLPA due diligence requirements, assess whether the company's documentation satisfies the clear and convincing evidence standard, and develop the forced labor compliance and CBP enforcement response strategy.

USMCA rules of origin require goods to satisfy a tariff classification change test, a regional value content test, or both, with the applicable test determined by the product's HTS classification in the USMCA product-specific rules of origin annex. An importer claiming USMCA preference must obtain a certification of origin, retain supporting records for five years, and be prepared to substantiate the origin claim in response to a CBP verification.

Free trade agreement and trade agreement act counsel can advise on the USMCA rules of origin requirements, assess whether the products satisfy the regional value content and tariff classification tests, and develop the USMCA compliance, certification, and audit response strategy.

USTR uses Section 301 investigations to respond to foreign practices that burden U.S. .ommerce, the Special 301 annual review to identify countries with inadequate intellectual property protections, and Section 201 to impose temporary tariffs when import surges cause serious domestic industry injury. A company with significant trade in sectors identified in USTR enforcement reports should conduct a proactive compliance risk assessment before a formal investigation results in new tariffs.

Export control law and economic sanctions counsel can advise on USTR enforcement priorities, assess whether the company's trade practices are consistent with current enforcement guidance, and develop the trade enforcement response and compliance program strategy.