India GSP eligibility removed and certain exports now subject to additional Section 201 duties.
We’ll put the legalese below in what we received formally from CBP, but here are the lowlights:
- Effective tomorrow (and announced late on Friday by the White House), India is terminated from the GSP program. This means exports from India will require payment of Column 1 duty rates that other Most Favored Nation (MFN) countries pay like Taiwan or Germany.
- The termination from the program also means that items which were exempt from Section 201 duties like photovoltaic cells are included in the additional duties.
On May 31, 2019, President Trump signed a Presidential Proclamation to Modify the List of Beneficiary Developing Countries Under the Trade Act of 1974, effective June 5, 2019. Pursuant to this Presidential Proclamation:
(1) India’s designation as a beneficiary developing country is terminated, effective June 5, 2019;
(2) General notes 4(a) and 4(d) of the Harmonized Tariff Schedule of the United States (HTSUS) and pertinent subheadings of the HTSUS are modified, as set forth in Annex A to the proclamation;
(3) Any provisions of previous Presidential Proclamations and Executive Orders that are inconsistent with the actions taken in this Proclamation are superseded to the extent of such inconsistency;
(4) India is no longer exempted from application of the Section 201 safeguard measures on certain Crystalline Silicon Photovoltaic (CSPV) cells (CSPV products) and large residential washers and parts, effective June 5, 2019. Imports of CSPV products, and washers and parts, from India are now subject to the duties and tariff rate quotas on these products. See https://www.cbp.gov/trade/remedies/201-solar-cells-panels-washing-machines and https://www.cbp.gov/trade/quota/bulletins for more information;
(5) Subdivision (b)(2) of U.S. note 17 and subdivision (b) of U.S. note 18 to subchapter III of chapter 99 of the HTSUS are modified, as set forth in Annex B to the proclamation; and
(6) Any merchandise from India or Turkey subject to the safeguard measures implemented by Proclamation 9693 and Proclamation 9694 that is admitted into a United States foreign trade zone on or after 12:01 a.m. eastern standard time on June 5, 2019, must be admitted as “privileged foreign status,” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to the safeguard measures implemented by Proclamation 9693 and Proclamation 9694.
Please, see Annex A and B for detailed HTSUS information.
The complete Presidential Proclamation and its Annexes are available at: https://www.whitehouse.gov/presidential-actions/proclamation-modify-list-beneficiary-developing-countries-trade-act-1974-2/
Mexican exports to the United States subject to an additional 5% duty effective June 10th – with a 5% per month increase.
The President giveth and the President taketh away. Last week, we saw a breakthrough in moving the new USMCA forward with the removal of steel and aluminum tariffs against Canada and Mexico, paving the way to advance negotiations and move the deal towards ratification. However, on May 30th, the White House issued a statement that chastised Mexico’s insufficient efforts to reduce the flow of migrants northwards and using the powers granted to the President by the Emergency Economic Powers Act, he is imposing a tariff of 5% on all goods imported from Mexico into the United States beginning on June 10th and increasing monthly until it reaches 25%.
Here is the paragraph from the statement:
“To address the emergency at the Southern Border, I am invoking the authorities granted to me by the International Emergency Economic Powers Act. Accordingly, starting on June 10, 2019, the United States will impose a 5 percent Tariff on all goods imported from Mexico. If the illegal migration crisis is alleviated through effective actions taken by Mexico, to be determined in our sole discretion and judgment, the Tariffs will be removed. If the crisis persists, however, the Tariffs will be raised to 10 percent on July 1, 2019. Similarly, if Mexico still has not taken action to dramatically reduce or eliminate the number of illegal aliens crossing its territory into the United States, Tariffs will be increased to 15 percent on August 1, 2019, to 20 percent on September 1, 2019, and to 25 percent on October 1, 2019. Tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory. Workers who come to our country through the legal admissions process, including those working on farms, ranches, and in other businesses, will be allowed easy passage.”
If you have any questions, contact your Hamanaka representative.