Production under FTZ procedures could exempt Bell Sports from customs duty payments on the foreign-status materials/components used in export production. On its domestic sales, Bell Sports would be able to choose the duty rates during customs entry procedures that apply to bicycle, motorcycle, football and baseball helmets; bicycle baby seats; bicycle car carrier racks; and, collectible football helmets (duty rates range from free to 10%) for the foreign-status materials/components noted below. Customs duties also could possibly be deferred or reduced on foreign-status production equipment.
The materials/components sourced from abroad include polypropylene webbing for bike helmets, stainless steel pins, aluminum screws, LED lights for bike helmets, and knee and elbow pad sets (duty rates range from 2.5% to 6.2%). The request indicates that the polypropylene webbing for bike helmets (classified under HTSUS 5806.32) will be admitted to the subzone in privileged foreign status (19 CFR 146.41), thereby precluding inverted tariff savings on this item.
As Agathon Associates noted in a BLOG POST YESTERDAY, the decision to not ask for tariff relieve on the imported textile components appears to be related to the successful past U.S. textile industry opposition to FTZ applications relating to articles that the domestic industry is willing and able to supply.