Trump Threatens 25% Tariff on Mexican Goods

To address the emergency at the Southern Border, President Trump announced he is invoking the authorities granted 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.

Aegean Apparel Recalls Children’s Sleepwear Due to Violation of Federal Flammability Standard

Description: This recall involves Aegean Apparel children’s robes and pajama pants. The robe is a 100 percent polyester micro fleece. It is hooded with long sleeves, a belt sewn into the back and two front pockets. The robe is light green with a gray and orange cat print with cat ears sewn onto the robe’s hood. The pajama pants are 100 percent polyester in white with a black and gray dog wearing a Santa hat print. Both garments were sold in children’s sizes small through extra large and have “Kings n Queens by Aegean Apparel” on its label.

Remedy: Consumers should immediately take the recalled sleepwear away from children and contact Aegean Apparel for a full refund.

Incidents/Injuries: None reported

Sold At: Online at www.aegeanapparel.com from November 2016 through October 2018 for $30 for the pants and about $60 for the robe.

Importer(s): Aegean Apparel, Inc. of Dayton, Ohio

Manufactured In: China

Recall number: 19-128

Army and Air Force Apparel Contracts Awarded

Peckham Vocational Industries, doing business as Peckham Inc., Lansing, Michigan, has been awarded a maximum $24,490,040 modification (P00009) exercising the first one-year option period of a one-year base contract (SPE1C1-18-D-N041) with a one-year option period for extended cold weather fleece jackets. This is a firm-fixed-price contract. Locations of performance are Michigan, Florida, and Puerto Rico, with a June 5, 2020, performance completion date. Using military services are Army and Air Force. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Puerto Rico Apparel Manufacturing Corp., Mayaguez, Puerto Rico, has been awarded a maximum $10,251,270 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for coats and trousers. This was a competitive acquisition with eight responses received. This is a one-year base contract with four one-year option periods. Location of performance is Puerto Rico, with a May 29, 2020, performance completion date. Using military services are Army and Air Force. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-1151).

The Department of Commerce Amends Countervailing Duty Process

On May 23, 2019, under the leadership of President Donald J. Trump, the U.S. Department of Commerce announced that it has issued a notice of proposed rulemaking to impose countervailing duties on countries that act to undervalue their currency relative to the dollar, resulting in a subsidy to their exports. U.S. law defines a countervailable subsidy as a financial contribution from a government or public entity that is specific and that provides a benefit to a foreign producer or exporter.

“This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries,” said Commerce Secretary Wilbur Ross. “Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses. This proposed rulemaking is a step toward implementing President Trump’s campaign promise to address unfair currency practices by our trading partners.”

The draft regulation identifies the criteria the Department would use to determine if countervailing duties should be imposed for currency undervaluation.

Since the beginning of President Trump’s term in office, the strict enforcement of U.S. trade laws has been a focus of his Administration. Just in the area of antidumping and countervailing duty enforcement, Commerce has initiated 164 new investigations – a 215 percent increase from the comparable period in the previous administration.

The Enforcement and Compliance unit within the International Trade Administration of the Department of Commerce is responsible for countervailing duty proceedings and determinations. Along with antidumping laws, countervailing duty laws provide American businesses and workers with an internationally accepted mechanism to seek relief from the harmful effects of unfairly traded imports into the United States.

Commerce currently maintains 481 antidumping and countervailing duty orders which provide relief to American companies and industries impacted by unfair trade.

Duvaltex Introduces Game-Changing Biodegradable Clean Impact Textiles

A biocatalyst additive, which is blended with polyester, facilitates the biodegradation of the textiles by interacting with the moisture and microbes inherent in landfill and anaerobic wastewater treatment conditions and thereby activating a metabolizing process that increases the degradation rate of the new polyester to 91 percent versus 6 percent for standard polyester. This means that the new Clean Impact Textiles will safely biodegrade at the essentially same rate as natural fibers—roughly over three and a half years versus 100 years or more for virgin polyester, reports Interior Design

USITC Institutes Section 337 Investigation of Certain Female Fashion Dresses, Jumpsuits, Maxi Dresses, and Accoutrements

The U.S. International Trade Commission (USITC) has voted to institute an investigation of certain female fashion dresses, jumpsuits, maxi skirts, and accoutrements.  The products at issue in the investigation are described in the Commission’s notice of investigation.

The investigation is based on a complaint filed by Style Pantry LLC of Beverly Hills, CA, on March 20, 2019.  An amended complaint was filed on April 24, 2019.  The complaint, as amended, alleges violations of section 337 of the Tariff Act of 1930 based upon the importation and sale of certain female fashion dresses, jumpsuits, maxi skirts, and accoutrements by reason of false designation, false description, dilution, and obtaining sales by false claim of association, the threat or effect of which is to destroy or substantially injure an industry in the United States.  The complainant requests that the USITC issue a general exclusion order, or in the alternative a limited exclusion order, and cease and desist orders.

The USITC has identified the following as respondents in this investigation:

Amazon.com Inc. of Seattle, WA;
Xunyun, Jiaxing Xunyung Imp & Exp Co. Ltd., of Zhejiang, China; and
Jianzhang Liao, Pinkqueen Apparel Inc., of Xiaman, China.

By instituting this investigation (337-TA-1157), the USITC has not yet made any decision on the merits of the case.  The USITC’s Chief Administrative Law Judge will assign the case to one of the USITC’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing.  The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.

The USITC will make a final determination in the investigation at the earliest practicable time.  Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation.  USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.

Williams Sonoma Hit with Claim of False Made in USA Claims

On May 21, 2019, Truthinadvertising.org filed a deceptive made in the USA marketing complaint against California-based specialty retailer Williams-Sonoma Inc. with the FTC. Here are five things to know about the complaint against one of the largest e-commerce retailers in the country.

Monday is Memorial Day in the U.S.A.

Agathon Associates will be closed Monday in observance of Memorial Day, a United States federal holiday which occurs every year on the last Monday of May. Federal, State, and local government offices will be closed, as will nearly all non-retail businesses. Memorial Day is a day of remembering the men and women who died while serving in the United States Armed Forces. Readers of the Textiles and Trade Blog who do business in the United Kingdom should also note the the last Monday of May is the Spring Bank Holiday in the United Kingdom.

In much of the United States, Memorial Day marks the beginning of summer. The "three day weekend" created by the Monday holiday is enjoyed with cookouts, trips to the beach and other leisure activities as will as parades and public ceremonies honoring those who died in service of the nation.

In Flanders fields the poppies grow
Between the crosses, row on row
That mark our place: and in the sky
The larks still bravely singing, fly
Scarce heard amid the guns below.

We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved, and were loved, and now we lie
In Flanders fields.

Take up our quarrel with the foe:
To you from failing hands we throw
The Torch: be yours to hold it high!
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders fields.

—John McCrae (1872-1918)

Each year I see fewer and fewer men on the street wearing remembrance poppies on Memorial Day, since 1971 celebrated on the last Monday in May. One year I couldn't even find anyone selling "Buddy Poppies," the paper replica flowers that the Veterans of Foreign Wars sell to raise money for disabled veterans.

For more than 90 years, the VFW's Buddy Poppy program has raised millions of dollars in support of veterans' welfare and the well being of their dependents. In February 1924, the VFW registered the name "Buddy Poppy" with the U.S. Patent Office. A certificate was issued on May 20, 1924, granting the VFW all trademark rights in the name of Buddy under the classification of artificial flowers. The VFW has made that trademark a guarantee that all poppies bearing that name and the VFW label are genuine products of the work of disabled and needy veterans. No other organization, firm or individual can legally use the name "Buddy" Poppy.

When you buy your Buddy Poppy to wear this Memorial Day you will be giving material aid to a disabled veteran. And when you wear your Buddy Poppy you will remind everyone who sees you of the meaning of Memorial Day.

The American Legion also sells crepe paper poppies for Memorial Day. That is another fine organization worthy of your support.

Although the United States Department of Veterans Affairs states "The wearing of poppies in honor of America's war dead is traditionally done on Memorial Day, not Veterans Day" many of us do join our friends from the British Commonwealth nations in wearing the red poppy of remembrance on November 11th as well.

This Memorial Day remember those who gave the last full measure of devotion to cause of liberty.

Maine Textiles International Closes

A Saco dye house that expanded in 2017 in hopes of reviving the state’s textile industry has shut down, breaking the supply chain for other textile companies in the New England area, reports the Portland Press Herald

U.S. Knitters File Opposition to Morocco Short Supply Request

On April 18, 2019, the Committee for the Implementation of Textile Agreements published in the Federal Register (84 FR 16243) Request for Public Comment on a Commercial Availability Request Under the U.S.-Morocco Free Trade Agreement

SUMMARY: The Government of the United States received a request from the Government of Morocco dated March 14, 2019, on behalf of GOTTEX SWIMWEAR BRANDS LTD to initiate consultations under Article 4.3.3 of the USMFTA. The Government of Morocco is requesting that the United States and Morocco consider revising the rules of origin for women's or girls' swimwear to address availability of supply of certain knit fabric in the territories of the Parties. the USMFTA.

Comments in opposition were filed by:

• Darlington Fabrics, and
• Elastic Fabrics of America.

Agathon Associates notes that the request from the Government of Morocco states that the third-country fabric that would be the beneficiary of the proposed modification will incorporate Lyrca® brand spandex produced in Ireland by U.S.A.-based manufacturer Invista. We fail to see the relevancy of this statement. If the rule of origin is modified to allow third-country fabric, the origin of the yarn in the fabric is irrelevant, and the yarn could be sourced from any of the many spandex manufacturers located in several countries. However, if the rule is not modified, and GOTTEX chooses to use fabric made in the U.S., the source of the yarn will also be U.S. -- from Invista, the sole U.S. producer of spandex -- due the requirement in the USMFTA that elastomeric yarn in the component that determines the tariff classification of the garment must be 100% originating in the region.

Consumer Product Safety Commission Personnel Attending Industry Conferences in June

On June 5, 2019, Jacqueline Campbell, CPSC Directorate for Engineering Sciences, will be a panelist (participating remotely) at the ASTM D13 Smart Textiles Workshop at the Sheraton Denver Downtown Hotel, Denver, Colorado. For additional information, including call-in information, contact Jacqueline Campbell at jcampbell@cpsc.gov or 301-987-2024.

On June 6, 2019, Sabrina Keller, CPSC Deputy Director for the Office of Import Surveillance and Yaniri De Leon, CPSC Compliance Investigator, will be participating in the American Apparel and Footwear Association (AAFA) Product Safety and Compliance Seminar. They will be speaking as part of a panel entitled "Safety at the Ports." The seminar will be held at the Fashion Institute of Technology, New York, N.Y. For more details on the event, see https://www.aafaglobal.org/AAFA/Events/Event_Display.aspx?EventKey=PSE2019. For additional information, contact Sabrina Keller at 301-504-7697 or skeller@cpsc.gov.

On June 19, 2019, Allyson Tenney, CPSC Directorate for Laboratory Sciences, will be attending ASTM International F08.22-Camping Softgoods and Tent Flammability Task Group Meeting at the Hyatt Regency at Colorado Convention Center, Denver, Colorado. For more information contact Allyson Tenney at atenney@cpsc.gov or 301-987-2769 or ASTM International at www.astm.org.

On June 19-21, 2019, Jacqueline Campbell, CPSC Directorate for Engineering Sciences, and Allyson Tenney, CPSC Directorate for Laboratory Sciences, will be attending the WEAR Conference 2019 June 19-21, 2019, from 8:00am to 5:00pm each day, at the Westin Bellevue in Seattle, Washington. For additional information contact Jacqueline Campbell at jcampbell@cpsc.gov or 301-987-2024.

DoD Contracts for Sewn Products and Footwear Awarded

Propper International Inc., Mayaguez, Puerto Rico, has been awarded a maximum $12,771,847 firm-fixed-price, indefinite-quantity contract for packs. This was a competitive acquisition with four responses received. This is a one-year base contract with two one-year option periods. Location of performance is Puerto Rico, with a May 31, 2020, performance completion date. Using military service is Marine Corps. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-1168).

Rocky Brands Inc., Nelsonville, Ohio, has been awarded a maximum $9,019,834 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for boots. This was a competitive acquisition with two responses received. This is a one-year base contract with two one-year option periods. Location of performance is Puerto Rico, with a May 20, 2020, performance completion date. Using customer is Navy. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-1150).

Proposed Recocation of Ruling Letters Relating to the Classification of Textile Car Covers

In NY 864763, NY 866826, and HQ 088040, CBP classified textile car covers in heading 8708, HTSUS, specifically in subheading 8708.99.50 (Duty free), HTSUS, which provided for “Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other.” CBP has reviewed NY 864763, NY 866826, and HQ 088040 and has determined the ruling letters to be in error. It is now CBP’s position that textile car covers are properly classified, in heading 6307, HTSUS, specifically in subheading 6307.90.98 (7% Duty), HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other.”

Before taking this action, consideration will be given to any written comments timely received bu June 14, 2019.

MORE INFORMATION

Of Sausage and Trade Law

The Harmonized Tariff Schedule Chapter 50 provisions relating to impregnated, coated, covered, or laminating textiles are a frequent source of confusion.

On May 2, 2019, in KALLE USA, INC., Plaintiff-Appellant v. UNITED STATES, Defendant Appellee the U.S. Court of Appeals for the Federal Circuit, in a tariff classification case involving imported sausage casings, where Kalle USA, Inc. appealed the Court of International Trade's summary judgment decision classifying the casings as made-up textiles under subheading 6307.90.98 of the Harmonized Tariff Schedule of the United States, arguing that the Trade Court erroneously interpreted the phrase "completely embedded in plastics" as it is used in HTSUS Chapter 59 Note 2(a)(3), and that the casings should be classified as plastics under HTSUS Chapter 39, affirmed the lower court ruling.

USTR Publish China Tariff List 4, Comments Due June 17

On Friday, May 17, 2019, the Office of the United States Trade Representative published in the Federal Register (84 FR 22564) Request for Comments Concerning Proposed Modification of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. This proposed "List 4" of Section 301 Tariffs on China The proposed product list has an approximate annual trade value of $300 billion. It covers nearly all articles not covered by the previous three lists. The additional duty will be up to 25%. The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals.

Q. I see tariff numbers on the list from which I was granted an exclusion in one of the earlier rounds. Do I still have an exclusion?

A. You should be okay. The notice states: "Product exclusions granted by the Trade Representative on prior tranches from this investigation will not be affected."

Q. I see a tariff number on this list which was removed from an earlier list. Do I need to petition again to have it removed?

A. Yes. For example, there were 17 tariff lines relating to textiles that were removed from List 3 but which have been added back to List 4. There will be a public comment and hearing process during which you can argue, again, for removal.

What are those 17 articles?

A. See the table below.

1	5210.11.40	Unbleached plain weave fabrics of cotton, <85% cotton, mixed mainly/solely with man-made fibers, wt. <200 g/m2, of number 42 or lower.
2	5210.11.60	Unbleached plain weave fabrics of cotton, <85% cotton, mixed mainly/solely with man-made fibers, wt. <200 g/m2, of numbers 43-68.
3	5210.19.10	Unbleached 3- or 4-thread twill fabrics of cotton, incl. cross twill, <85% cotton by weight, mixed mainly/solely with mm fibers, not over 200 g/m2.
4	5308.90.90	Yarn of other vegetable textile fibers, nesoi.
5	5402.20.60	Multiple (folded) or cabled high tenacity yarn (except sewing thread) of polyesters, not put up for retail sale.
6	5407.54.00	Woven fabrics, containing 85 percent or more by weight of textured polyester filaments, printed.
7	5504.10.00	Artificial staple fibers, not carded, combed or otherwise processed for spinning, of viscose rayon.
8	5513.21.00	Woven fabrics of polyester staple fibers, <85% polyester staple fibers, mixed mainly/solely with cotton, not over 170 g/m2, plain weave, dyed.
9	5801.31.00	Uncut weft pile fabrics of man-made fibers, other than fabrics of heading 5802 or 5806.
10	5801.32.00	Cut corduroy of man-made fibers, other than fabrics of heading 5802 or 5806.
11	5801.33.00	Weft pile fabrics of man-made fibers, cut, other than fabrics of heading 5802 or 5806, nesoi.
12	5801.36.00	Chenille fabrics of man-made fibers, other than fabrics of heading 5802 or 5806.
	5903.10.15	Textile fabric spec in note 9 to sect XI, of man-made fibers, impregnated, coated, covered or laminated w/polyvinyl chloride, over 60% plastics.
13	6001.22.00	Knitted or crocheted looped pile fabrics of man-made fibers.
14	6005.35.00	Wrap knit fabrics of synthetic fibers, specified in subheading note 1 to this chapter excluding headings 6001 to 6004.
15	6005.41.00	Unbleached or bleached warp knit fabrics (including made on galloon knitting machines) of artificial fiber, other than headings 6001 to 6004.
16	6006.24.90	Printed knitted or crocheted fabrics of cotton, nesoi.
17	6006.41.00	Unbleached or bleached knitted or crocheted fabrics of artificial fibers, nesoi.

When is the deadline to request that these or other articles be removed?

A. Here are the dates:

• June 10, 2019: Due date for filing requests to appear and a summary of expected testimony at the public hearing.
• June 17, 2019: Due date for submission of written comments.
• June 17, 2019: The Section 301 Committee will convene a public hearing in Washington, D.C.
• Seven days after the last day of the public hearing: Due date for submission of post-hearing rebuttal comments.

Q. When will that tariffs go into effect?

A. The date has not been published, but based on past experience, probably mid to late July.

USTR Publishes Draft Forms for Exclusion Requests Relating to China 301 List 3

USTR is establishing a process by which U.S. stakeholders can request the exclusion of particular products classified within a covered tariff subheading from the additional duties that went into effect on September 21, 2018, and May 10, 2019. USTR anticipates that the window for submitting exclusion requests will open on or around June 30, 2019. Requests for exclusion will have to identify a particular product and provide supporting data and the rationale for the requested exclusion. Within 14 days after USTR posts a request for exclusion, interested persons can provide a response with the reasons they support or oppose the request. Interested persons can reply to the response within 7 days after it is posted. To assist in timely and comprehensive review of requests for exclusion, USTR will require respondents to use a prescribed Exclusion Request/Response/Reply Form.

The draft form, which is now out for comment through June 7, 2019, is available HERE.

USTR has not yet announced the deadline for filing for exclusions from List 3\1\. In the case of List 1 and List 2, there was a three-month window from the announcement of the filing period to the closing. The first two lists resulted in nearly 14,000 requests. For List 3 USTR is anticipating a staggering 60,000 requests will be filed. USTR estimates it will take petitioners on average an hour to file a request, a number that seems low, considering that requests relating to List 1 and List 2 took twice that and required less information from the petitioner than called for in the draft form for List 3.

\1\ Note. (USTR) has ubmitted a request to the Office of Management and Budget (OMB) for emergency review and clearance on or about June 20, 2019, that will be effective for six months from that date, for the exclusion request form.

CPSC Request for Information about Possible Exemptions from Testing and Other Changes to the Standard for the Flammability of Clothing Textiles

The U.S. Consumer Product Safety Commission (CPSC) requests information about possible changes to the Commission’s Standard for the Flammability of Clothing Textiles to expand the list of fabrics that are exempt from testing under the standard. CPSC is particularly interested in receiving information about the possibility of adding spandex to the list of fabrics that are exempt from the testing requirements. CPSC also would like information about the equipment and procedures specified in the standard and possible ways to update those provisions to reduce the burdens associated with the testing requirements ... READ MORE. Comments are due by June 24, 2019.

WTO Boeing: The Commission seeks input regarding the EU's economic interests in accordance with Article 9 of Regulation (EU) No 654/2014 of the European Parliament and of the Council

The Commission has launched a public consultation to seek information and views regarding the EU's economic interests in accordance with Article 9 of Regulation (EU) No 654/2014 of the European Parliament and of the Council of 15 May 2014. The Commission expects to receive input from private stakeholders potentially affected by planned EU commercial policy measures further to adjudication of a trade dispute with the United States on Measures Affecting Trade in Large Civil Aircraft under the WTO Dispute Settlement Understanding (“DSU”).

The public consultation will last until 31 May 2019. Four tariff lines relating to cotton are on the list:

• 52010090 cotton, neither carded nor combed (excl. rendered absorbent or bleached),
• 52029100 garnetted stock of cotton,
• 52029900 cotton waste (excl. yarn waste, thread waste and garnetted stock), and
• 52030000 cotton, carded or combed.

Additionally, the list includes textile bandages and luggage and travel goods with a textile exterior.

READ MORE HERE

Joint Statement by Canada and the United States on Section 232 Duties on Steel and Aluminum

After extensive discussions on trade in steel and aluminum covered by the action taken pursuant to Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862), the United States and Canada have reached an understanding as follows:

1. The United States and Canada agree to eliminate, no later than two days from the issuance of this statement:

a. All tariffs the United States imposed under Section 232 on imports of aluminum and steel products from Canada; and

b. All tariffs Canada imposed in retaliation for the Section 232 action taken by the United States (identified in Customs Notice 18-08 Surtaxes Imposed on Certain Products Originating in the United States, issued by the Canada Border Services Agency on June 29, 2018 and revised on July 11, 2018).

2. he United States and Canada agree to terminate all pending litigation between them in the World Trade Organization regarding the Section 232 action.

3. The United States and Canada will implement effective measures to:

a. Prevent the importation of aluminum and steel that is unfairly subsidized and/or sold at dumped prices; and

b. Prevent the transshipment of aluminum and steel made outside of Canada or the United States to the other country. Canada and the United States will consult together on these measures.

4. The United States and Canada will establish an agreed-upon process for monitoring aluminum and steel trade between them. In monitoring for surges, either country may treat products made with steel that is melted and poured in North America separately from products that are not.

5. In the event that imports of aluminum or steel products surge meaningfully beyond historic volumes of trade over a period of time, with consideration of market share, the importing country may request consultations with the exporting country. After such consultations, the importing party may impose duties of 25 percent for steel and 10 percent for aluminum in respect to the individual product(s) where the surge took place (on the basis of the individual product categories set forth in the attached chart). If the importing party takes such action, the exporting country agrees to retaliate only in the affected sector (i.e., aluminum and aluminum-containing products or steel).

H&M to Phase out Conventional Cashmere

According to a posting on the company's website retailer H&M has set a goal to only use sustainably sourced materials, including a phase out of conventional cashmere.

CPSC Officials Participating in the American Apparel and Footwear Association (AAFA) Product Safety and Compliance Seminar

On June 6, 2019, Sabrina Keller, Consumer Product Safety Commission Deputy Director for the Office of Import Surveillance and Yaniri De Leon, CPSC Compliance Investigator, will be participating in the American Apparel and Footwear Association (AAFA) Product Safety and Compliance Seminar. They will be speaking as part of a panel entitled “Safety at the Ports.” The seminar will be held at the Fashion Institute of Technology, New York City.

Today is Straw Hat Day

May 15th is Straw Hat Day the beginning of the season when men may wear their straw boaters and Panamas rather than the fur felt fedoras, porkpies, homburgs, and bowlers that we wear (You do wear a hat, don't you?) the rest of the year.

For more information, or to buy quality hats, including hats made in the U.S.A., visit these fine vendors:

• Bollman Hat Company,
• Resistol, and
• Stetson.

Just don't wear your straw hat after September 15th, or you may start a riot.

The Commercial Customs Operations Advisory Committee (COAC) will hold its quarterly meeting on Thursday, May 30, 2019, in Laredo, Texas

The Commercial Customs Operations Advisory Committee (COAC) will hold its quarterly meeting on Thursday, May 30, 2019, in Laredo, Texas. The meeting will be open to the public to attend either in person or via webinar.

Agenda

The COAC will hear from the current subcommittees on the topics listed below and then will review, deliberate, provide observations, and formulate recommendations on how to proceed:

1. The Next Generation Facilitation Subcommittee will provide an update on the status of the Emerging Technologies Working Group’s use of blockchain to address challenges faced by both the government and the trade in today’s complex commercial environment. The discussion will highlight the Intellectual Property Rights Blockchain Proof of Concept Project as well as discuss other upcoming projects, including a day-long event that will solicit additional ideas for blockchain concepts that could be tested in the future. Finally, the subcommittee will provide recommendations regarding blockchain proofs of concept.

2. The Secure Trade Lanes Subcommittee will present a summary of the activities of the Trusted Trader Working Group including results of the May 8th and 9th face-to-face meeting with Trusted Trader Pilot participants. The subcommittee will deliver an update on the progress of the In-Bond Working Group’s recommendation for the enhancement of the CBP In-bond program, the development of in-bond regulations, and enhancements to existing in-bond guidelines. The subcommittee will deliver an update on the launch of the new Export Modernization Working Group which will be developing recommendations for CBP’s expansion of current export pilots, regulatory changes that will mandate the use of electronic export manifest, and the expansion of post departure filing to new participants.

3. The Intelligent Enforcement Subcommittee will report on the work that has been conducted by the Intellectual Property Rights, AntiDumping and Countervailing Duty, and Bond Working Groups.

4. The Rapid Response Subcomittee will provide an update on its collaboration with CBP on furthering the strategic approach to the 21st Century Customs Framework.

IMPORTANT Goods Already on the Water NOT Subject to Increase from 10% to 25% Section 301 Duty

Agathon Associates has confirmed with the Office of the United States Trade Representative that goods already in transit, or shipped in the next few hours and which are currently subject to the 10% Section 301 will remain at 10%. For goods now subject to 10% which are entered entered for consumption on or after midnight tonight AND where shipped to the U.S. on or after midnight tonight the Section 301 tariff will increase to 25%. That's means goods already in transit will not be subject to the increase, even if they arrive after midnight tonight. For confirmation see the text near the bottom of the first column of page 20460 in today's Federal Register (84 FR 20459).

Army Jacket Contract Awarded

Arkansas Lighthouse for the Blind, Little Rock, Arkansas, has been awarded a maximum $11,085,645 modification (P00015) exercising the second one-year option period of a one-year base contract (SPE1C1-17-D-B019) with two-one-year option periods for flame resistant, operational camouflage pattern, intermediate weather outer layer jackets. This is a firm-fixed price, indefinite-delivery/indefinite-quantity contract. Location of performance is Arkansas, with an Oct. 31, 2020, performance completion date. Using military service is Army. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Proposed Change to a Customs Ruling 12 Years Later Demonstrate the Need to Use a Trade Advisor Who Advocates for the Client, Not Just Filing Forms

In Binding Ruling Letter NY N015943, of September 6, 2007, CBP classified a polyester/rayon woven fabric composed of 46.2% textured filament polyester, 8.8% spun polyester and 45% rayon staple fibers in heading 5407, HTSUS, specifically in subheading 5407.93.2090, HTSUSA, which provides for “Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics: Of yarns of different colors: Other: Other.” Rate of duty 12%

CBP has reviewed NY N015943 and has determined the ruling letter to be in error. It is now CBP’s position that the polyester/rayon woven fabric is properly classified, in heading 5516, HTSUS, specifically in subheading 5516.23.00, HTSUS, which provides for “Woven fabrics of artificial staple fibers: Containing less than 85 percent by weight of artificial staple fibers, mixed mainly or solely with man-made filaments: Of yarns of different colors.” Rate of duty 8.5%

CBP is proposing to revoke NY N015943 and to revoke or modify any other ruling not specifically identified to reflect the latest analysis. CBP is proposing to revoke any treatment previously accorded by CBP to substantially identical transactions. Before taking this action, consideration will be given to any written received by April 19, 2019.

It is well-known in the trade that when a fabric contains more than one fiber, it is classified according the predominate fiber by weight. In this case filament polyester, at 46.2% was the predominate fiber, so CBP classified in 5407 for woven fabric of filament fiber. BUT WAIT, before we consider the 4-digit Heading we need to know we are in the correct 2-digit Chapter. Chapter 54 is for filament, but if you add together the 8.8% spun polyester and the 45% rayon staple, the fabric is chief weight of staple fiber, which puts it in Chapter 55, according to CBP current opinion, which rules out 5407, leaving the only question which classification in Chapter 55 applies. Since the rayon, at 45% is greater than the 8.8 staple polyester, is it classified an artificial staple fiber.

FIRST LESSON? Tariff classification is tricky, and even CBP gets it wrong sometimes. David Trumbull of Agathon Associates is licensed by the U.S. Department of Homeland Security as a Customs Broker competent to determine tariff classifications and duty rates.

SECOND LESSION? It's not enough just to have a licensed broker. You need someone who will advocate for you and seek ways to reduce your import costs. In this case the broker was unsure of the classification and asked customs, got an answer that left his client paying 12% and now, a dozen years later, CBP says "Oops, it should have been 8.5%." Of course they will get the difference back, since it was CPS's error. However, a broker who also acted as a TRADE ADVISOR to the client, as Agathon Associates does, would have suggested the lower classification to CBP in the request for a ruling. It appears that the broker in this case did not, because we do not see, in the original, erroneous ruling, any discussion by CBP of why the broker's suggestion of the lower rate is incorrect, as we would expect to see had the broker made such an argument.

China List 3 Section 301 Tariffs to Go to 25% on Friday, Exclusion Process to Follow

Following the President's tweet over the weekend, and the perception that U.S.-China trade negotiations we breaking down, there has been much press reporting that the China 301 Tariff List 3, article now subject to additional 10% duty, would go to 25% at the end of this week. We now have official confirmation. The Office of the U.S. Trade Representative will publish in tomorrow's Federal Register "Notice of Modification of Section 301 Action: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation," announcing that the rate of additional duty will increase to 25 percent with respect to products covered by the September 2018 action on May 10, 2019.

In the same FR publication, the Trade Representative announced that the Office of the United States Trade Representative (USTR) will establish a process by which interested persons may request that particular products classified within an HTSUS subheading covered by the September 2018 action be excluded from the additional duties. USTR will publish a separate notice describing the product exclusion process, including the procedures for submitting exclusion requests, and an opportunity for interested persons to submit oppositions to a request.

Agathon Associates has confirmed with the Office of the United States Trade Representative that goods already in transit, or shipped in the next few hours and which are currently subject to the 10% Section 301 will remain at 10%. For goods now subject to 10% which are entered entered for consumption on or after midnight tonight AND where shipped to the U.S. on or after midnight tonight the Section 301 tariff will increase to 25%. That's means goods already in transit will not be subject to the increase, even if they arrive after midnight tonight. For confirmation see the text near the bottom of the first column of page 20460 in the May 9th Federal Register (84 FR 20459).

BACKGROUND

In a notice published on September 21, 2018 (83 FR 47974), the Trade Representative, at the direction of the President, announced a determination to modify the action being taken in the investigation by imposing additional duties on products of China with an annual trade value of approximately $200 billion. The rate of additional duty initially was 10 percent. Those additional duties were effective starting on September 24, 2018, and currently are in effect. Under Annex B of the September 21 notice, the rate of additional duty was set to increase to 25 percent on January 1, 2019. In the September 21 notice, the Trade Representative stated that he would continue to consider the actions taken in this investigation, and if further modifications were appropriate, he would take into account the extensive public comments and testimony previously provided in response to the notices published on July 17, 2018 (83 FR 33608) and August 7, 2018 (83 FR 38760).

On September 28, 2018 (83 FR 49153), the Trade Representative issued a conforming amendment and modification of the September 21 notice. The current notice refers to the September 21 notice, as modified by the September 28 notice, as the ‘September 2018 action.’

On December 19, 2018 (83 FR 65198), in accordance with the direction of the President, the Trade Representative determined to modify the September 2018 action by postponing until March 2, 2019, the increase in the rate of additional duty to 25 percent. The Annex to the December 19 notice, which superseded Annex B to the September 21 notice, amended the Harmonized Tariff Schedule of the United States (HTSUS) to reflect this postponement of the increase in the rate of duty applicable to the September 2018 action.

On March 5, 2019 (84 FR 7699), in accordance with the direction of the President, the Trade Representative determined to modify the September 2018 action by postponing until further notice the increase in the rate of additional duty to 25 percent. Annex B of the September 21 notice (83 FR 47974) and the Annex to the December 19 notice (83 FR 65198) were rescinded. In accordance with Annex A of the September 21 notice, the rate of additional duty under the September 2018 action remained at 10 percent until further notice.

The United States is engaging with China with the goal of obtaining the elimination of the acts, policies, and practices covered in the investigation. The leaders of the United States and China met on December 1, 2018, and agreed to hold negotiations on a range of issues, including those covered in this Section 301 investigation. See https://www.whitehouse.gov/briefings-statements/statement-press-secretary-regarding-presidents-working-dinner-china/. Since the meeting on December 1, the United States and China have engaged in additional rounds of negotiation on these issues, including meetings in March, April, and May of 2019. In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds. In light of the lack of progress in discussions with China, the President has directed the Trade Representative to increase the rate of additional duty to 25 percent. Section 301(b) of the Trade Act of 1974, as amended (Trade Act), provides that the Trade Representative “shall take all appropriate and feasible action authorized under [Section 301(c)] to obtain the elimination of [the] act, policy, or practice [under investigation].” Section 307(a)(1) of the Trade Act authorizes the Trade Representative to modify or terminate any action being taken under Section 301, subject to the specific direction, if any, of the President if “the burden or restriction on United States commerce . . . of the acts, policies, and practices, that are the subject of such action has increased or decreased, or such action is being taken under Section [301(b)] of this title and is no longer appropriate.” In light of the lack of progress in the additional rounds of negotiations since March 2019, and at the direction of the President, the Trade Representative has determined that it is appropriate for the rate of additional duty under the September 2018 action to increase to 25 percent on May 10, 2019. The Trade Representative’s decision to modify the September 2018 action takes into account the extensive public comments and testimony, as well as advice from advisory committees, concerning the actions proposed in the notices issued in advance of the September 2018 action (83 FR 33608 and 83 FR 38760). Those notices, among other things, requested comments on whether the rate of additional duties should be 10 percent or 25 percent. The Trade Representative’s decision also reflects the advice of the interagency Section 301 Committee.

Camouflage Trouser Contact Awarded

San Antonio Lighthouse for the Blind, San Antonio, Texas, has been awarded a maximum $11,295,446 modification (P000013) exercising the second one-year option period of a one-year base contract (SPE1C1-17-D-B024) with two one-year option periods for flame resistant, operational camouflage pattern, intermediate weather outer layer trousers. This is a firm-fixed price, indefinite-delivery/indefinite-quantity contract. Location of performance is Texas, with an Oct. 31, 2020, performance completion date. Using military service is Army. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

NCTO President & CEO Kim Glas to deliver textile policy update

WHAT: The Southern Textile Association’s (STA) Southern Division Spring Meeting

WHO: NCTO President and CEO Kim Glas will outline key textile policies. Cameron Hamrick, President of Hamrick Mills and Chairman of STA’s Southern Division, and Matt Shannon, Plant Manager for Greenwood Mills and First Vice President of STA, will give opening remarks.

WHEN: Wednesday, May 15, 2019, from 8:00 a.m. to 1:00 p.m.

WHERE: The Madren Conference Center at 230 Madren Center Dr., Clemson, S.C.

WHY: Glas will present an update on textile policies in Washington, ranging from the status of the U.S.-Mexico-Canada-Agreement (USMCA) to Section 301 tariffs.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.

• U.S. employment in the textile supply chain was 594,147 in 2018.
• The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.
• U.S. exports of fiber, textiles and apparel were $30.1 billion in 2018.
• Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.

CONTACT: Kristi Ellis
(202) 684-3091
www.ncto.org

Navy Parka Contract Awarded

Federal Prison Industries, Inc., doing business as UNICOR, Washington, District of Columbia, has been awarded a maximum $9,558,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for parkas. This is a one-year base contract with two one-year option periods. Locations of performance are Washington, District of Columbia; and Kentucky, with a May 2, 2020, performance completion date. Using military service is Navy. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-F024).

National Industries for the Blind Awarded Army Physical Fitness Uniform Contract

National Industries For The Blind, has been awarded a maximum $15,036,000 modification (P00007) exercising the second one-year option period of a one-year base contract (SPE1C1-17-D-B022) with two one-year option periods for Army Physical Fitness Uniform (APFU) jackets. This is an indefinite-delivery contract. Locations of performance are North Carolina and Maryland, with a May 10, 2020, performance completion date. Using military service is Army. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

NCTO Announces New VP of Communications and Director of Regulatory & Technical Affairs

The National Council of Textile Organizations (NCTO) has to announced the appointment of Kristi Ellis as the organization’s new Vice President of Communications, effective April 29, 2019, and Donald Vavala as the Director of Regulatory and Technical Affairs, effective May 2019.

As Vice President of Communications at NCTO, Kristi Ellis will assume responsibility for developing, overseeing, and implementing a communications strategy for the association and the domestic textile industry as a whole. Ms. Ellis brings 24 years of manufacturing and international trade reporting experience with leading publications such as Women’s Wear Daily and S&P Global Market Intelligence. The majority of her career, which includes nearly 10 years as Washington Bureau Chief for Women’s Wear Daily, has been spent reporting on textile trade policy matters. Regarding her appointment, Ms. Ellis said, “I am really excited and grateful to have the opportunity to help develop and shape NCTO’s communications strategy as we work to amplify the textile industry’s importance as a thriving and innovative manufacturing sector in the United States.”

As NCTO’s Director of Regulatory and Technical Affairs, Don Vavala will support all association activities related to federal government procurement and industry regulatory matters. In this capacity, Mr. Vavala will staff various NCTO committees covering a broad spectrum of contracting, technical, and environmental issues. Mr. Vavala comes to NCTO following a 31-year career at W.L. Gore, a NCTO member organization, where he most recently held the position of Director, Military Government Affairs. He will succeed Hardy Poole, who announced his resignation from the same position at NCTO, effective May 2019. Regarding his appointment, Mr. Vavala stated, “I am very excited about the opportunity to work with Ms. Glas and the staff at NCTO. The textile industry is a major component of the economic backbone of this great nation and I look forward to applying my 31 years of experience to insuring that the industry continues to thrive and maintain its status as a significant contributor to our country’s growth and prosperity.”

The hiring of Ms. Ellis and Mr. Vavala coincide with the arrival of Kimberly Glas as NCTO’s President & CEO, effective April 29, 2019. In referencing these two new hires, Ms. Glas stated, “I am excited Kristi and Don are joining the NCTO team at this important time. They both have significant experience with the textile industry and a wealth of knowledge specific to their new roles. Most importantly, both have shown a strong commitment to the success of the domestic textile industry. We are very fortunate to have them join the organization in these pivotal leadership roles. NCTO’s membership will be well served by these important staff additions.”

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.

• U.S. employment in the textile supply chain was 594,147 in 2018.
• The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.
• U.S. exports of fiber, textiles and apparel were $30.1 billion in 2018.
• Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.

Commerce Imposes Countervailing Duty on Polyester Textured Yarn from India and China

On May 3, 2019, the Department of Commerce published in the Federal Register (84 FR 19036) Polyester Textured Yarn From India: Preliminary Affirmative Countervailing Duty Determination, and Alignment of Final Determination With Final Antidumping Duty Determination.

Commerce preliminarily determines that the following estimated countervailable subsidy rates exist:

-----------------------------------------------------------------
                                                     Subsidy rate
                         Company                        (percent)
----------------------------------------------------------------
JBF Industries Limited.........................           20.45
Reliance Industries Limited....................            7.09
All Others......................................          13.82
----------------------------------------------------------------

On May 3, 2019, the Department of Commerce published in the Federal Register (84 FR 19040) Polyester Textured Yarn From the People’s Republic of China: Preliminary Affirmative Countervailing Duty Determination, and Alignment of Final Determination With Final Antidumping Duty Determination.

Commerce preliminarily determines that the following estimated countervailable subsidy rates exist:

-------------------------------------------------------------------
                                                       Subsidy rate
                         Company                          (percent)
-------------------------------------------------------------------
Fujian Billion Polymerization Fiber Technology                32.04
 Industrial Co., Ltd \13\............................
Suzhou Shenghong Fiber Co., Ltd \14\.................        459.98
Suzhou Shenghong Garmant Development Co..............        459.98
All Others...........................................         32.04
-------------------------------------------------------------------

Navy Clothing Contract Awarded

Kandor Manufacturing Inc., Kandor, Puerto Rico, has been awarded a maximum $13,896,462 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for the Navy working uniform, Blouses/Trousers Type II and III, and maternity blouses. This was a competitive acquisition with five responses received. This is an 18-month base contract with three one-year option periods. Location of performance is Puerto Rico, with an Oct. 29, 2020, performance completion date. Using military service is Navy. Type of appropriation is fiscal 2019 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-1163). (Awarded April 30, 2019)

Customs Proposed Change to Classification of Certain Garments

Customs and Border Protection is proposing a change to how certain apparel articles are classified that could substantially increase import duties on these articles. The change relates to garments containing two textile fibers present in equal amounts, i.e., 50/50 blends. Textile articles are classified according to the chief weight fiber in the article. If no one fiber predominates, as in a 50/50 blend there are two classifications that equally describe the article, the rule used to choose which of the two to use is to use the classification that comes last in numeric order. For example in the past CBP made the following rulings --

• Men's shorts of 50% linen and 50% rayon could be classified at 6203.43.80 (other textile materials) with rate of duty of 27.9% or 6203.49.80 (synthetic) with rate of duty of 2.8%, CBP classified at 6203.49.80, with rate of duty of 2.8%.
• Men's shirts of 50% linen and 50% rayon could be classified at 6205.30.20 (man-made fiber) with rate of duty of 29.1 center/kg + 25.9% or 6205.90.40 (other textile materials) with rate of duty of 2.8%, CBP classified at 6205.90.40, with rate of duty of 2.8%.
• Men's sweater of 50% cotton and 50% silk could be classified at 6110.20.20 (cotton) with rate of duty of 16.5% or 6110.90.90 (other textile materials) with rate of duty of 6%, CBP classified at 6110.90.90, with rate of duty of 6%.
• A knit tunic of 50% wool and 50% silk could be classified at 6110.11.00 (wool) with rate of duty of 16% or 6110.90.00 (other textile materials) with rate of duty of 6%, CBP classified at 6110.90.90, with rate of duty of 6%.

In each case CBP ruled for the classification that came numerically last within the subheading that described the article.

Now CBP has taken a fresh look at the General Rules of Interpretation and is proposing to reverse those rulings and change the way articles of 50/50 composition are classified.

Here are the relevant rules

Note 2 (A) to Section XI, HTSUS, provides: Goods classifiable in chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over each other single textile material. When no one textile material predominates by weight, the goods are to be classified as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration.

* * *

Subheading Note 2 (A) to Section XI, HTSUS, provides: Products of chapters 56 to 63 containing two or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under note 2 to this section for the classification of a product of chapters 50 to 55 or of heading 5809 consisting of the same textile materials.

READ MORE

To see the CBP proposal Click HERE

It is now CBP's position that an apparel article of 50/50 composition be classified according to which fabric classification comes last numerically. So, in the case of the linen (Chapter 53) / rayon (Chapter 54 or 55) blend, they classify as rayon. In the case of silk (Chapter 30) / Cotton (Chapter 52) they classify as cotton. In the case of silk (Chapter 50) / wool (Chapter 51) they classify as wool.

The result of this change is that in each of the cases above, and similar ones, the higher duty will apply.

Note this change affects classification of apparel and home textiles of 50/50 blends. It does not affect the classification of fiber, yarn, or fabric.

AGATHON ASSOCIATES NOTES

1. Even if these proposed change goes through, they still have the wrong classification in the case of the linen/rayon shorts. Under this proposed way of classifying, they would be at 6203.49.05 for artificial fiber, not 6203.43.90 (synthetic). The rate of duty is the same either way, 27.9%

2. This is why Agathon Associates always discourages clients from importing goods of 50/50 blend of two textile fibers. Aside from this proposed change in classification, it is a bad idea. A small inadvertent variance in the manufacturing process can easily shift your goods from the expected classification to another classification that could affect the rate of duty. Such inadvertent variance could also result in the content of the goods not agreeing with the product labeling, which is a violation of the Federal Trade Commission labeling laws.

CBP Proposing to Eliminate a Means to Avoid China 301 Tariffs on Plastic Clothes Hangers.

In Binding Ruling Letter HQ H058876 of May 14, 2009, Customs and Border Protection designated certain plastic garment hangers as instruments of international traffic, which enables the items to be released without payment of duty. In order to qualify as an IIT CBP has traditionally held that an article must be: used as a container or holder in international traffic, substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. CBP has reviewed its prior rulings and determined this ruling letter to be in error. It is now CBP's position that plastic garment hangers cannot be granted IIT status when they are not used to physically suspend garments during transportation in international traffic. The proposed revocation does not foreclose the possibility that CBP will grant IIT status to certain plastic garment hangers in response to future ruling requests that satisfy this analysis, however.

CBP is proposing to revoke HQ H058876 and to revoke or modify any other ruling not specifically identified to reflect the analysis contained in a new Ruling, HQ H300587. Additionally, CBP is proposing to revoke any treatment previously accorded by CBP to substantially identical transactions.

The rate of duty on plastic hangers (Classification 3923.90.0080 Harmonized Tariff Schedule of the United States) is just 3%, but the significance of this proposed action is that plastic hangers from China are subject to additional 10% Section 301 import duty. As instruments of international traffic the 301 tariff could be avoided.

Before taking this action, CBP will consideration any written comments timely received. Comments must be received on or before May 31, 2019.

USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Piracy and Counterfeiting

On April 25, 2019, the Office of the United States Trade Representative released its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights and the findings of its Notorious Markets List, which highlights online and physical markets that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.

Special 301 Report

The Special 301 Report identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.

Trading partners that currently present the most significant concerns regarding IP rights are placed on the Priority Watch List or Watch List. USTR identified 36 countries for these lists in the Special 301 Report:

• Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine and Venezuela are on the Priority Watch List.
• Barbados, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Switzerland, Thailand, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan and Vietnam are on the Watch List.

These trading partners will be the subject of increased bilateral engagement with USTR to address IP concerns. Specifically, over the coming weeks, USTR will review the developments against the benchmarks established in the Special 301 action plans for countries that have been on the Priority Watch List for multiple years. For such countries that fail to address U.S. concerns, USTR will take appropriate actions, such as enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organization or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments.

As part of the Special 301 review process, USTR invited public comments and held a public hearing that featured testimony from witnesses representing foreign governments, industry, and non-governmental organizations. USTR also offered a post-hearing comment period during which hearing participants could submit additional information.

Click here to read the 2019 Special 301 public hearing transcript.

Click here to view the video recording of the 2019 Special 301 public hearing.

To read the Special 301 Report, click here.

Notorious Markets List

The Notorious Markets List highlights 33 online markets and 25 physical markets that are reported to engage in and facilitate substantial copyright piracy and trademark counterfeiting. This activity harms the American economy by undermining the innovation and intellectual property rights of U.S. IP owners in foreign markets. An estimated 2.5 percent, or nearly half a trillion dollars’ worth, of global imports are counterfeit and pirated products.

The 2018 Notorious Markets List maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the Notorious Markets List highlights free trade zones and the role they may play in facilitating trade in counterfeit and pirated goods. It also continues to discuss emerging piracy models, including illicit streaming devices, “stream-ripping,” and piracy portals and apps, that cause major damage to the digital marketplace for legitimate music, movies, and television. The Notorious Markets List also calls on several e-commerce platforms to improve takedown procedures and cooperation with right holders—particularly small and medium-sized businesses—to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.

The Notorious Markets List does not constitute an exhaustive list of all markets reported to deal in pirated or counterfeit goods around the world, nor does it reflect findings of legal violations or the U.S. Government’s analysis of the general IP protection and enforcement climate in the country concerned. This announcement concludes the 2018 Out-of-Cycle Review of Notorious Markets, which USTR initiated on August 16, 2018, through publication in the Federal Register of a request for public comments. The request for comments and the public’s responses is online at www.regulations.gov, Docket number USTR-2018-0027.

To read the Notorious Markets List, click here.