Trade News

May 19, 2020

Automakers Reopen Across North America While Bracing for Challenges Ahead of CUSMA/USMCA

Auto manufacturing plants are resuming operations across North America, however, they are anticipating challenges to come from a new socially distant workplace and heavy reliance on partners in Mexico and Canada to succeed.

Mexico said it would allow the auto industry to resume on June 1, but would let companies start sooner if they have the approved safety measures in place.

Mexican officials say the country is experiencing its peak of virus transmission, with the total number of confirmed cases surpassing 45,000. Still, the country this week will ease lockdown measures in areas where there are no confirmed cases of the virus and plans to do a wider reopening on June 1.

Production of autos, including trucks, has plummeted during the pandemic. In April, the output of autos and parts fell by more than 70 percent, according to the Federal Reserve’s latest figures. Industry leaders expect figures from May and early June to be more telling on the state of the industry, and those will determine if they need some form of stimulus from the government to get past the fallout from the pandemic.

Automakers are also bracing for additional stress to come in July, when CUSMA/ USMCA goes into effect. The North American auto industry has repeatedly asked for some flexibility with implementing the new rules, which will require costly and time-consuming changes.

Auto industry officials are awaiting regulations they will have to follow in order to qualify for reduced tariffs in the region, which are expected to be published by June 1.

May 14, 2020

Fourth Round Of Exclusions For China Section 301 List 4A Includes Medical Products

The U.S. Trade Representative (USTR) granted a fourth round of exclusions from Section 301 List 4A tariffs on Chinese imports, which cover three 10-digit Harmonized Tariff System subheadings, and five specially-prepared product descriptions, several of which are related to medical products involved in the COVID-19 response.

The excluded HTS subheading are as follows:

3306.20.0000 – Preparations for oral or dental hygiene, including denture fixative pastes and powders; yarn used to clean between the teeth (dental floss), in individual retail packages: Yarn used to clean between the teeth (dental floss);

6506.10.6030 – Other headgear, whether or not lined or trimmed: Safety headgear: Other – Motorcycle helmets; and

8512.10.4000 – Electrical lighting or signaling equipment (excluding articles of heading 8539), windshield wipers, defrosters and demisters, of a kind used for cycles or motor vehicles; parts thereof: Lighting or visual signaling equipment of a kind used on bicycles: Visual signaling equipment.

The exclusions with specially-prepared product descriptions include:

Plastic tumblers used in healthcare facilities (3924.10.4000)
Plastic disposable identification wristbands worn by medical patients (3926.90.9990)
Plastic manually-operated pill or tablet crushers (8479.82.0080)
Bluetooth tracking devices (8517.62.0090)
Wireless communication apparatus capable of receiving audio data to be distributed to wireless speakers (8517.62.0090)

These exclusions will apply from September 1, 2018, through September 1, 2020, and apply to any product that satisfies the description in the annex of the Federal Register notice, regardless of whether the company using the exclusion filed the request.

If you have any questions about this latest round of tariff exclusions, including determining whether your products qualify, please reach out to Carson.

Get in touch:

Tyler Carson, President, tyler@carson.ca
Dave Pentland, VP, dwpentland@carson.ca
Matt Earish, COO, matt@carson.ca

May 13, 2020

Revised Lacey Act Provisions for Importing into the United States

The Food, Conservation, and Energy Act of 2008 amended the Lacey Act to provide, among other things, that importers submit a declaration at the time of importation for certain plants and plant products. Enforcement of the declaration requirement began on April 1, 2009, and products requiring a declaration are being phased-in.

The Lacey Act, first enacted in 1900 and significantly amended in 1981, is the United States’ oldest wildlife protection statute. The Act combats trafficking in illegally taken wildlife, fish, or plants. The Food, Conservation and Energy Act of 2008, effective May 22, 2008, amended the Lacey Act by expanding its protection to a broader range of plants and plant products.

Phase VI of the enforcement schedule, will take effect on October 1, 2020. As part of the enforcement schedule, the USDA has added 29 new HTS codes that will require information upon import into the United States.

Product categories covered under this phase of the plan include:

Essential Oils
Trunks, Cases, Suitcases
Wood and Articles of Wood
Musical Instruments
Miscellaneous Manufactured Articles

The USDA is inviting public comment on the products covered under this phase of the plan, as well as on whether any additional Harmonized Tariff Schedule (HTS) chapters should be included in the current phase-in schedule. Should there be additions to phase VI, the USDA will provide at least 6 months’ notice to persons and industries affected by those changes to facilitate compliance with the new requirements.

To view the full list of new HTS codes and learn how to submit public comment on the products covered under phase VI of the enforcement plan, click here.

May 12, 2020

Department of Homeland Security Criticized for Lack Of USMCA Enforcement Implementation

Democrats on the House Ways and Means Committee are urging the Trump administration to comply with all the requirements in the USMCA implementing bill, after DHS failed to meet an April 28 deadline to establish a task force aimed at enforcing the forced labor prohibition.

Earlier on Monday, Brenda Smith, CBP executive assistant commissioner for the Office of Trade, said in a call with reporters that the agency is excited to talk to its Mexican and Canadian counterparts on how they can use customs authority to tackle the “need to remove forced labor from supply chains.” CBP and USTR did not immediately respond to requests for comment on the Ways and Means letter.

Democrats are particularly sensitive to enforcement of USMCA given that it was central in their negotiations with the Trump administration all of last year. They’ve repeatedly vowed to have strong oversight over the implementation process, which has been moving quickly as the deal is set to go into effect on July 1.

May 11, 2020

Industry Input Needed on Tariff Rate Quotas — Refined Sugar and Sugar-Containing Products

In keeping with Global Affairs Canada’s policy, the Government of Canada is seeking input from Canadians on the administration of two new Tariff Rate Quotas (TRQs) for sugar and sugar-containing products to the United States established under the Canada-United States-Mexico Agreement (CUSMA), in order to develop administration policies.

These TRQs are for:

Sugar-Containing Products for Export to the United States under CUSMA
Refined Sugar for Export to the United States under CUSMA

To ensure efficiency and effectiveness in developing and administering new administration policies, the Government of Canada is seeking the views of stakeholders with an interest in the administration of these two new quotas.

Global Affairs Canada would like to hear from:

the Canadian public
producers, refiners, processors, further processors, distributors, retailers and exporters
academics and experts
Indigenous groups
national and provincial industry associations
small, medium and large enterprises
national, provincial, territorial and regional associations
other interested stakeholders

To participate in the consultation, interested parties are encouraged to review the background information and provide feedback through the online questionnaire provided by Global Affairs Canada.

Click here if you are interested in providing feedback. Stakeholders have until 11:59 p.m. (Pacific Time) on May 15, 2020 to submit their responses, comments, and suggestions.

May 8, 2020

What Are the New De Minimis Thresholds Under CUSMA/USMCA?

Under CUSMA, Canada has agreed to maintain a de minimis threshold of at least CAD$150.00 for customs duties, and CAD$40.00 for taxes, at the time or point of importation of goods shipped by courier from the United States or Mexico. There are otherwise no changes to Canada’s existing de minimis framework.

Accordingly, postal shipments from the U.S. or Mexico, as well as any courier or postal shipments from any other country, will continue to have a customs duty and tax remission threshold value of up to CAD$20.00.

Please note that the new thresholds will apply as of the date CUSMA enters into force — July 1, 2020 — and, for greater clarity, time of importation means the time of release.

To read the full details of the customs notice detailing de minims thresholds under CUSMA/USMCA, click here.

May 7, 2020

CBSA Duty Relief for Products Related to COVID-19

Canada Border Services Agency is offering duty relief on eligible goods, via Customs Notice 20-19, Certain Goods Remission Order (COVID-19).

The relief applies to goods which were imported into Canada on or after May 5, 2020. This relief can be claimed at the time of importation or within two years of the date of importation.

CBSA has noted a number of eligible items for duty relief that can be applied by your customs broker. Importers must be able to furnish evidence that the goods are eligible for exemption, as listed in Appendix A of Customs Notice 20-19.

Goods eligible for relief under the Certain Goods Remission Order (COVID-19) include:

Face and Eye Protection
Gloves
Protective Garments and the Like
Disinfectants/Sterilization products
Medical Consumables
Other Products

For an exhaustive list, including tariff item numbers and description of eligible goods, please refer to Appendix A.

Click here to read the full notice.

We have reviewed this notice, and are available to discuss how duty relief may apply to your business. If you have any questions regarding this announcement, or any other trade-related information, please do not hesitate to reach out at any time.

Get in touch:

Tyler Carson, President, tyler@carson.ca
Dave Pentland, VP, dwpentland@carson.ca
Matt Earish, COO, matt@carson.ca

May 5, 2020

USTR Considering One-Year Extension of China Tariff Exclusions

The Trump administration is weighing whether to extend by one year some China tariff exclusions, a move that would offer some relief for U.S. businesses navigating the fallout from the COVID-19 pandemic.

The move would apply to some products excluded from the 25 percent tariffs that Trump imposed on Chinese goods in two initial batches: a list of $34 billion in products and $16 billion.

USTR asked for public comment on the idea before June 1. The trade agency said it would evaluate the exclusions, currently set to expire on July 9 and July 31, on a case-by-case basis, rather than approve an across-the-board extension. The focus of the evaluation will be “whether, despite the first imposition of these additional duties in July 2018, the particular product remains available only from China.” Additionally, the following issues should be addressed in submitting any comments:

Whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
Any changes in the global supply chain since August 2018 as to the particular product or any other relevant industry developments.
The efforts, if any, the importers or U.S. purchasers have undertaken since August 2018 to source the product from the United States or third countries.

The USTR notes that it will continue to consider whether the imposition of additional duties on the products covered by the exclusion will result in severe economic harm to the commenter or other U.S. interests.

Those wishing to comment must do so electronically, preferably by completing the Exclusion Extension Comment Form, which has recently been revised into one form that combines the previously separate public and confidential forms. Fields on the form marked as Business Confidential Information (BCI) will not be publicly available when comments are posted on the docket (uploaded supporting documents can also be marked as public of BCI).

Comments will be accepted between May 1 and June 1, 2020. All submissions must be made electronically via the www.regulations.gov portal on Docket Number USTR-2020-0017 (List 1) or USTR-2020-0018 (List 2).

May 4, 2020

U.S. Trade Authorities Place Canada on “Watch List” for Coming Changes to Drug Prices

The United States is keeping Canada on its watch list of countries where policies and practices could pose a threat to American intellectual property rights.

In its annual report on foreign perils to American rights holders, the office of the U.S. Trade Representative is raising concerns about Canada’s plan to recalibrate how it calculates the price of prescription drugs.

The report stops short, however, of demands from the U.S. pharmaceutical industry that Canada be elevated to the USTR’s list of “priority” trouble spots.

The federal Liberal government announced last summer that the arm’s-length Patented Medicine Prices Review Board would stop using drug prices in the U.S. and Switzerland — among the highest in the world — to help it determine what Canadian patients should pay.

The Pharmaceutical Research and Manufacturers of America, a drug-industry lobby group, says Canada’s plan would be a drag on efforts to develop new treatments and would end up devaluing American-made patented medications.

The USTR report out this week does acknowledge coming intellectual-property reforms in the new North American trade deal, CUSMA, but calls on Canada to “contribute fairly” to research and development for innovative medicines.

May 1, 2020

Disrupted Supply Chains Strain Trade among U.S., Mexico and Canada

As COVID-19 continues to impact global economies, Resilience360, a cloud-based platform that helps companies to visualize, track and protect their business operations, recently released a series of reports that analyze key challenges that cross-border operators in Canada and the United States face.

With individual provinces and states largely in charge of deciding on issues relating to business closures and shelter-in-place advisories, Canada and the United States have been experiencing a somewhat patchwork approach to the pandemic. Business closures and shelter-in-place orders have impeded ground freight delivery schedules from an accessibility perspective, with restaurant and rest stop closures also impacting truck drivers.

An additional area of complexity lies with Mexico, having decided to close its factories as of March 30. Similarly to Canada and the United States, federal and state governments have not been on the same page in terms of determining how and when businesses should re-open.

Click here to read the report “COVID-19 Outbreak in the U.S. and Canada: Impact on North American Supply Chain Operations.”

Click here to read the report “Production Halts and Industrial Action in Mexico Amid COVID-19 Pandemic.”

Amid the disruptions to supply chains, working with a trusted trade advisor can help mitigate complex trade issues that have arisen as a result of COVID-19. Get in touch with a Carson trade expert today.