Monday, May 10, 2021

CBP Seizes Designer Masks, Bucket Hats Worth Nearly $800K

In March, 2021, U.S. Customs and Border Protection officers examining arriving shipments at an express consignment location in Austin, Texas, intercepted over 5,000 counterfeit designer face masks, hats and headbands valued at nearly $800,000.

Read more HERE.

Saturday, May 8, 2021

Army Dress Coat Contract Awarded

Gil Sewing Corp., Chicago, Illinois, has been awarded a maximum $14,863,500 firm-fixed-price, indefinite-delivery contract for men’s uniform dress coats. This was a competitive acquisition with four responses received. This is a one-year base contract with four one-year option periods. Location of performance is Illinois, with a May 6, 2022, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-1467).

Thursday, May 6, 2021

TJX Recalls Infant Sleep Bags Due to Suffocation Risk; Sold at T.J. Maxx, Marshalls and Sierra

Description:

This recall involves infant sleep bags, in size 0-6 months, that were sold under the brand names Dylan & Abby, First Wish, First Wish Organic, Harry & Me, Little Red Caboose, Piper & Posie, Sam & Jo, Sam & Jo Organic, Shabby Chic and Willow Blossom.  The brand name and size are printed on two separate labels at the back of the neck.  The style number is printed on a separate label located on the inside side seam behind the care label.  The sleep bags zip up the middle or to the side of the front, and were sold in a variety of colors and designs, including animals, dinosaur bones, splatter paint, circus designs, construction, cars, florals, clouds, robots, stars, dino dudes, monsters and firetrucks.  The following style numbers are included in the recall: 

Brand Name

Style Number

Dylan & Abby

CL01073

First Wish

CL00824

CL00889

CL00911

First Wish Organic

CL00981

CL00985

CL01099

Harry & Me

CL01102

Little Red Caboose

CL00756

CL00882

CL00899

CL00904

CL00905

CL00921

CL00924

CL00986

CL00987

Piper & Posie

CL00819

CL00923

CL00982

CL01005

CL01006

CL01007

Sam & Jo

CL00871

CL00890

CL00903

CL00906

CL00983

CL00984

Sam & Jo Organic

CL01066

Shabby Chic

CL00980

Willow Blossom

CL00909

CL00913

 
Remedy:

Consumers should immediately stop using the recalled infant sleep bags and contact TJX for instructions on how to participate in the recall and receive their choice of either a full refund or a store gift card. 

Incidents/Injuries:

No incidents or injuries have been reported.

Sold At:

T.J. Maxx and Marshalls stores nationwide and online at tjmaxx.com, marshalls.com and sierra.com between April 2018 and February 2021 for about $20.

Importer(s):

The TJX Companies Inc., of Framingham, Mass.

Manufactured In:
China and India
Recall number:
21-123

More information and photos HERE.

Tuesday, May 4, 2021

Foreign Military Sales Contracts Awarded

Atlantic Diving Supply Inc., doing business as ADS, Virginia Beach, Virginia (SPE2DS-21-D-0004); W.S. Darley & Co., Itasca, Illinois (SPE2DS-21-D-0006); Owens and Minor Distribution Inc., Mechanicsville, Virginia (SPE2DS-21-D-0003); Regulus Global LLC, Virginia Beach, Virginia (SPE2DS-21-D-0002); and TQM LLC, doing business as Two Rivers Medical, Greer, South Carolina (SPE2DS-21-D-0005), are sharing a maximum $516,953,713 firm-fixed-price, indefinite-delivery/indefinite-quantity contract under solicitation SPE2DS-17-R-0002 for the Foreign Military Sales Medical and Surgical Tailored Logistics Support program. These were competitive acquisitions with eight responses received. These are one-year base contracts with four one-year option periods. Locations of performance are Virginia, Illinois and South Carolina, with a May 3, 2022, ordering period end date. Using customers are foreign military services worldwide. Type of appropriation is fiscal 2021 through 2022 defense working capital funds and Foreign Military Sales funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Within the U.S. industry it is widely understood that Department of Defense acquisitions of textiles and clothing are government by the Berry Amendment which requires domestic U.S. sourcing. Less well known is that the Berry Amendment applies to all funds "made available" to the Defense Department. That includes Department of Defense procurement for Foreign Military Sales.

Carbon Fiber FTZ Applicant Gives up Fight over PAN

As Agathon Associates REPORTED on February 2, 2021, Teijin Fibers and Hexcel Corp have been battling over FTZ since 2019.

On May 4, 2021, the Foreign-Trade Zone Board published in the Federal Register (86 FR 23672) Foreign-Trade Zone 38--Spartanburg County, South Carolina, Application for Production Authority, Teijin Carbon Fibers, Inc., Amendment of Application.

The amendment removes 12,000 tow polyacrylonitrile fiber (precursor) from the foreign-status materials/components that TCF could use under the requested FTZ authority.

CBP Cleveland Seizes Top Glove Products Under Forced Labor Finding

U.S. Customs and Border Protection (CBP) personnel in Cleveland seized a shipment of 3.97 million nitrile disposable gloves due to information indicating they were made by forced labor, a form of modern slavery.

Read more HERE.

Monday, May 3, 2021

China's Implementation Steps of Phase One Agreement "Fall Short," Says USTR

On April 30, 2021, The Office of the United States Trade Representative (USTR) released its annual Special 301 Report on the adequacy and effectiveness of trading partners' protection of intellectual property rights and the findings of its Review of Notorious Markets for Counterfeiting and Piracy (the Review), which highlights online and physical markets that reportedly engage in and facilitate substantial trademark counterfeiting and copyright piracy.

The Special 301 Report (Report) is the result of an annual review of the state of intellectual property (IP) protection and enforcement in U.S. trading partners around the world, which the Office of the United States Trade Representative (USTR) conducts pursuant to Section 182 of the Trade Act of 1974, as amended (the Trade Act, 19 U.S.C. § 2242). Congress amended the Trade Act in 1988 specifically “to provide for the development of an overall strategy to ensure adequate and effective protection of intellectual property rights and fair and equitable market access for United States persons that rely on protection of intellectual property rights.” In particular, Congress expressed its concern that “the absence of adequate and effective protection of United States intellectual property rights, and the denial of equitable market access, seriously impede the ability of the United States persons that rely on protection of intellectual property rights to export and operate overseas, thereby harming the economic interests of the United States.”

This Report provides an opportunity to put a spotlight on foreign countries and the laws, policies, and practices that fail to provide adequate and effective IP protection and enforcement for U.S. inventors, creators, brands, manufacturers, and service providers, which, in turn, harm American workers whose livelihoods are tied to America’s innovation-driven sectors. The Report identifies a wide range of concerns, including: (a) challenges with border and criminal enforcement against counterfeits, including in the online environment; (b) high levels of online and broadcast piracy, including through illicit streaming devices; (c) inadequacies in trade secret protection and enforcement in China, Russia, and elsewhere; (d) troubling “indigenous innovation” and forced technology transfer policies that may unfairly disadvantage U.S. right holders in markets abroad; and (e) other ongoing, systemic issues regarding IP protection and enforcement, as well as market access, in many trading partners around the world. Combatting such unfair trade policies will encourage domestic investment inthe United States, foster American innovation and creativity, and increase economic security for American workers and families.

The Special 301 Subcommittee received stakeholder input on more than 100 trading partners, but focused its review on those submissions that responded to the request set forth in the notice published in the Federal Register to identify whether a particular trading partner should be named as a Priority Foreign Country, placed on the Priority Watch List or Watch List, or not listed in the Report. Following extensive research and analysis, USTR has identified 32 trading partners as follows:

Priority Watch List

  • Argentina
  • Chile
  • China
  • India
  • Indonesia
  • Russia
  • Saudi Arabia
  • Ukraine
  • Venezuela

Watch List

  • Algeria
  • Barbados
  • Bolivia
  • Brazil
  • Canada
  • Colombia
  • Dominican Republic
  • Ecuador
  • Egypt
  • Guatemala
  • Kuwait
  • Lebanon
  • Mexico
  • Pakistan
  • Paraguay
  • Peru
  • Romania
  • Thailand
  • Trinidad and Tobago
  • Turkey
  • Turkmenistan
  • Uzbekistan
  • Vietnam

With regard to China, tThe United States has been closely monitoring China’s progress in implementing its commitments under the United States-China Economic and Trade Agreement (Phase One Agreement). In 2020, China published several draft IP-related legal and regulatory measures and finalized over a dozen measures. Notably, China amended the Patent Law, Copyright Law, and Criminal Law in the past year. However, these steps toward reform require effective implementation and fall short of the full range of fundamental changes needed to improve the IP landscape in China.

DLA Clothing and Textiles works overtime to support White House masks mission

To provide more than 25 million cloth face masks to communities hard-hit by the pandemic, Defense Logistics Agency Troop Support Clothing and Textiles team members expedited contracting processes and worked hundreds of overtime hours.

In late February, the Department of Health and Human Services requested DLA’s help providing the masks to community centers across the country to support President Joe Biden’s National Strategy to defeat COVID-19. Locations include more than 1,400 federally qualified health centers, about 125 tribal organizations and 200 foodbanks for distribution to surrounding communities.

A pre-award contracting team headed by Clothing and Textiles Supplier Operations Director Steven Merch conducted market research and create a solicitation for American-made mask production within 10 days of the request.

Overall, the team compressed a typically six-month contract award process into six weeks, he said. The competitive acquisition resulted in numerous proposals and evaluations to determine whether solicitors could supply 100% Berry Compliant, or American-made, masks.

Read more HERE.

Friday, April 30, 2021

Readout of Ambassador Katherine Tai’s virtual meeting with the National Council of Textile Organizations about the Covid-19 response and personal protective equipment

On April 29, 2021, United States Trade Representative Katherine Tai met virtually with National Council of Textile Organizations (NCTO) President and CEO Kimberly Glas and representatives of several NCTO member companies to discuss the COVID-19 response and the mobilization of the textile industry to produce Made-in-the-USA personal protective equipment (PPE). Ambassador Tai thanked NCTO for the textile industry’s crucial and ongoing role in the response. They discussed their shared interest in building and sustaining a resilient and secure U.S. supply chain for PPE. The Ambassador and NCTO agreed to remain in contact on this topic going forward.

Thursday, April 29, 2021

NCTO President & CEO Kim Glas Testifies on Supply Chain Resiliency at House Small Business Subcommittee Hearing

On April 29, 2021, National Council of Textile Organizations (NCTO) President and CEO Kim Glas testified on “Supply Chain Resiliency and the Role of Small Manufacturers” before the Small Business Committee’s Subcommittee on Economic Growth, Tax, and Capital Access.

In written testimony submitted to the committee, Glas provided an overview of the incredible resiliency of the U.S. textile industry during the COVID-19 pandemic, the impact of the ensuing economic crisis, existing options available to small manufacturers to access capital, and policy recommendations to strengthen the entire industry domestic supply chain.

View the full written testimony by NCTO President and CEO Kim Glas HERE.

AAFA Submits Comments to Dept. of Defense Regarding America’s Supply Chains

The American Apparel and Footwear Association has submitted comments to the U.S. Department of Defense’s request regarding risks in the supply chain for strategic and critical materials and policy recommendations to address these risks.

Read the letter HERE.

Army Dress Coat Contract Awarded

Fechheimer Brothers Co., Cincinnati, Ohio, has been awarded a maximum $15,412,500 firm-fixed-price, indefinite-delivery contract for men’s uniform dress coats. This was a competitive acquisition with four responses received. This is a one-year base contract with four one-year option periods. Locations of performance are Ohio and Illinois, with an April 26, 2022, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-1466).

CPSC's Joanna Matheson Participating in ASTM D13.50 Virtual Subcommittee Meeting Regarding Updates on Smart Textile Projects

Joanna Matheson, Consumer Product Safety Commission Directorate for Health Sciences, will participate in the ASTM D13.50 meeting via teleconference. The meeting is being held on Tuesday, June 8, 2021, from 1:00pm - 3:00pm EST. This meeting will provide updates on smart textile activities. For additional information, including call-in information, contact Joanna Matheson at: jmatheson@cpsc.gov, (301) 987-2564.

Friday, April 23, 2021

Navy Parka Contract Awarded to Federal Prison Industries

Federal Prison Industries, Washington, D.C., has been awarded a $9,558,000 modification (P00007) exercising the second one-year option period of a one-year base contract (SPE1C1-19-D-F024) with two one-year option periods for working parkas. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Locations of performance are Washington, D.C., and Kentucky, with a May 2, 2022, ordering period end date. Using service is Navy. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Virtual Event: 2021 Global Supply Chain & Trade Conference

The American Apparel and Footwear Association has announced Gina M. Raimondo, U.S. Secretary of Commerce, as key government speaker at the 2021 Global Supply Chain & Trade Conference, May 25 & 26, 2021

The Honorable Gina Raimondo serves as the 40th U.S. Secretary of Commerce. She is focused on a simple but vital mission — to spur good-paying jobs, empower entrepreneurs to innovate and grow, and help American workers and businesses compete. Secretary Raimondo was formerly the 75th Governor of Rhode Island and its first woman governor.

During her time as Governor, Secretary Raimondo kick-started the state’s economy and made record investments in infrastructure, education, and job training. She focused tirelessly on creating economic opportunities and good-paying jobs for all Rhode Islanders.

For more information or to register, CLICK HERE.

Make connections with the textile industry in India

The Rhode Island Textile Innovation Network has planned a special “Executive Insights” webinar coming up, co-hosted with The Chafee Center at Bryant University, that will provide an opportunity to make connections with the textile industry in India. Several top executives from India will explain the state of the textile industry there, and the potential for partnerships with US companies. From the US side, our own Steve Perry from Darlington Fabrics will present background on his company and how Darlington works in India.

The webinar will take place on Wednesday, May 5th at the special time of 9:30 AM (to accommodate the time difference with India). So pour a mid-morning coffee and please join us. Here’s the registration link:

https://www.eventbrite.com/e/ritin-executive-insights-business-opportunities-in-the-india-textile-sector-tickets-151683209563

Thursday, April 22, 2021

40 Senators Ask USTR to Restart China 301 Exclusion Process

On April 21, 2021,U.S. Senators Rob Portman (R-OH) and Tom Carper (D-DE), along with 38 other members of the Senate, sent a letter to U.S. Trade Representative Katherine C. Tai, asking her to restart the exclusion process for imports from China subject to tariffs under Section 301 of the Trade Act of 1974. The Trump administration set up an exclusion process to help U.S. manufacturers and businesses receive relief from the tariffs when an imported good was not available outside of China, or when the tariffs caused severe economic harm to U.S. industry. Unfortunately, those exclusions expired at the end of 2020, and the Biden administration has not restarted a process for businesses to apply for new exclusions.

Senator Portman and Carper were joined by Senators Angus S. King, Jr. (I-ME), John Barrasso, M.D. (R-WY), Roger Marshall, M.D. (R-KS), Roy Blunt (R-MO), James Lankford (R-OK), Susan M. Collins (R-ME), Shelley Moore Capito (R-WV), Jerry Moran (R-KS), John Cornyn (R-TX), James Risch (R-ID), Joni K. Ernst (R-IA), Mike Crapo (R-ID), Cynthia Lummis (R-WY), Pat Toomey (R-PA), Roger F. Wicker (R-MS), Rand Paul (R-KY), Tim Kaine (D-VA), Bill Hagerty (R-TN), Chuck Grassley (R-IA), Christopher A. Coons (D-DE), Dianne Feinstein (D-CA), Deb Fischer (R-NE), Lindsey O. Graham (R-SC), Kyrsten Sinema (D-AZ), John Boozman (R-AR), John Hoeven (R-ND), Catherine Cortez-Masto (D-NV), Todd Young (R-UT), Ben Sasse (R-NE), Michael F. Bennet (D-CO), Raphael Warnock (D-GA), Ron Johnson (R-WI), Ted Cruz (R-TX), M. Michael Rounds (R-SD), Mark Warner (D-VA), Jim Inhofe (R-OK), Tim Scott (R-SC), and Marco Rubio (R-FL).

“In order to provide certainty and predictability to these businesses, and give them time to plan and modify their supply chains, we ask that you renew expired and expiring Section 301 exclusions. Doing so will give American businesses relief until a full exclusion process can be reinstated,” wrote the Senators. “We were pleased to see the Biden Administration renew exclusions granted by the Trump Administration for health-related imports to fight the COVID-19 pandemic. Over the longer-term, we hope that you will restart a process to permit companies to apply for exclusions. Such a process should emphasize transparency, speed, consistency, and fairness, and should acknowledge both the practical realities of global value chains and the broader aim of supply chain diversification.

Read the letter HERE

BRAV USA Recalls Youth Jackets with Drawstrings Due to Strangulation and Entrapment Hazards

Description: This recall involves Swix branded winter jackets with a drawstring in the hood and a drawstring in the waist. They were sold under the name Focus Down Jacket Jr., item number 13162. The jackets were sold in three colors; black, navy and red. They were sold in four European format junior sizes; 128 (8-10yrs), 140 (10-12yrs), 152 (12-14yrs) and 164 (14-16yrs). The front of the jacket has light gray paneling on the upper chest, and the Swix brand logo is on the left chest. The down filled, winter jacket was designed and marketed to winter athletes for use in winter athletics, such as Nordic skiing. The item number can be found on the hang tag.

Remedy: Consumers should immediately take the recalled jacket away from children and remove the drawstrings to eliminate the hazard, or return the jacket to BRAV USA for a full refund, shipping included.

Incidents/Injuries: No incidents or injuries have been reported.

Sold At: WMS Store, Gallatin Alpine Sports and other outdoor and ski apparel stores nationwide and online at www.swixonline.com to ski racing clubs and others from September 2020 through March 2021 for about $160.

Importer(s): BRAV USA Inc., of Haverhill, Mass.

More information and photos HERE.

Tuesday, April 20, 2021

Rhode Island Company Hyman Brickle & Son Awarded Face Cover Contract

Hyman Brickle & Son Inc., Woonsocket, Rhode Island, has been awarded a maximum $20,352,000 firm‐fixed‐price, indefinite‐delivery/indefinite‐quantity contract under solicitation SPE1C1‐20‐R‐0162 for Lot 2 multi-ply face covers. This was a competitive acquisition with 30 responses received. This is a two‐year contract with no option periods. Locations of performance are Rhode Island and New York, with an April 18, 2023, ordering period end date. Using customers are Army, Civil-Military Operations and National Guard. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1‐21‐D‐1447).

Vietnam Removed from List of Countries Manipulating Their Currency

On April 16, 2021, the U.S. Department of the Treasury released a Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States.

In a December 2020 Report,the U.S. Department of the Treasury found that Switzerland and Vietnam practiced currency manipulation for the four quarters through June 2020. For the four quarters ending in 2020, based on initial enhanced engagements with Vietnam and Switzerland further analysis, and data, Treasury has determined that there is insufficient evidence to make a finding that either economy manipulates its exchange rate.

Treasury has also established a Monitoring List of major trading partners that merit close attention to their currency practices and macroeconomic policies. The Monitoring List comprises China, Japan, Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, and Mexico.

Thursday, April 15, 2021

CBP Seizes Counterfeit N95 Masks

On April 7, 2021, U.S. Customs and Border Protection officers working at the Houston Seaport intercepted a shipment of counterfeit N95 masks that with an estimated Manufacturer’s Suggested Retail Price of almost $350,000.

The shipment of counterfeit masks originated in China and were destined to White Plains, N.Y.

Read more HERE.

Wednesday, April 14, 2021

Marine Physical Training Uniform Contracts Awarded

American Fashion Fitness, East Syracuse, New York (M67854-21-D-1879); Fabrox, doing business as Fit USA, Ormond Beach, Florida (M67854-21-D-1880); SND Manufacturing, Dallas, Texas (M67854-21-D-1881); and String King, Gardena, California (M67854-21-D-1882), are each awarded a firm-fixed price, indefinite-delivery/indefinite quantity, multiple award contract for the purchase of up to a combined maximum quantity of 1,800,800 physical training uniforms. The maximum dollar value for all four contracts combined is $146,240,522. American Fashion Fitness is awarded $46,805,200. Fit USA is awarded $40,882,542. SND Manufacturing is awarded $35,330,200. String King is awarded $23,222,580. Work will be performed in East Syracuse, New York; Ormond Beach, Florida; Dallas, Texas; and Gardena, California. The work is expected to be completed by April 2026. Fiscal 2020 research, development, test, and evaluation (Marine Corps) funds in the amount of $25,646 will be obligated on the first delivery orders immediately following contract awards. The requirement was competitively procured through full and open competition after exclusion of sources per Federal Acquisition Regulation 6.203 and solicited through the beta.sam.gov website with 17 offers received in response to solicitation number M67854-21-R-1804. The Marine Corps Systems Command, Quantico, Virginia, is the contracting activity.

Target Recalls Cat & Jack Baby Rompers Due to Choking Hazard

This recall involves Cat & Jack Baby Heart Ears Rompers.  The rompers were sold in sizes newborn to 24M.  They have gray knit fabric with red trim on the wrists, ankles and pockets, red hearts on the knees and the hood, red and white-striped lining inside the hood and snaps on the legs.  The product item number is printed on the white tag inside of the romper.  Rompers with the following product item numbers are included in the recall:

Product Numbers

Description

206-09-6476

Cat & Jack Baby Heart Ears Romper - Newborn

206-09-6477

Cat & Jack Baby Heart Ears Romper - 0-3 Months

206-09-6478

Cat & Jack Baby Heart Ears Romper - 3-6 Months

206-09-6479

Cat & Jack Baby Heart Ears Romper - 6-9 Months

206-09-6480

Cat & Jack Baby Heart Ears Romper - 12 Months

206-09-6481

Cat & Jack Baby Heart Ears Romper - 18 Months

206-09-6482

Cat & Jack Baby Heart Ears Romper - 24 Months

 

 
Remedy:

Consumers should immediately take the recalled rompers away from children and return them to any Target Store for a full refund.  Consumers who purchased the romper on Target.com can contact Target to receive a prepaid return label to return the romper.

Incidents/Injuries:

The firm has received 40 reports of the hearts peeling or detaching, including one report of a child choking

Sold At:

Target stores nationwide and online at Target.com from November 2020 through February 2021 for about $13.

Importer(s):

Target Corp., of Minneapolis, Minn.

Manufactured In:
Vietnam
Recall number:
21-111

More information and photos HERE

Monday, April 19, is Patriots' Day in Massachusetts and Maine

Monday, April 19, 2021, is Patriots' (plural possessive) Day in Massachusetts and Patriot's (singular possessive) Day in Maine.

"Listen, my children and you shall hear
Of the midnight ride of Paul Revere,
On the eighteenth of April, in Seventy-five."

New England's original "On the Road" man looms large in these parts -- life-sized, in fact, in bronze, in Boston's North End. There, as well, you'll find his house preserved, just as his ride is preserved in the Longfellow poem.

"You know the rest. In the books you have read,
How the British Regulars fired and fled --"

The battles that morning of April 19 in the Massachusetts towns of Concord, Lexington, and Menotomy (now Arlington) officially mark the beginning of the American War of Independence. The war formally concluded September 3, 1783, with the Treaty of Paris, although it was effectively over a few months earlier. In Massachusetts and Maine (part of Massachusetts until 1820, when, under the "Missouri Compromise" Maine, a free State was admitted to the Union, paired with Missouri, a slave State) we celebrate the beginning of our independence as Patriots'/Patriot's Day, and, in normal years, like Revere, we take to the road in a renowned twenty-six miles of road from Hopkinton to Boston.

The Boston Marathon has been run since 1897. The first modern marathon was run at the 1896 Olympics in Athens, Greece. The inspiration for the race was the (questionable) tale of Pheidippides, who after the Greeks, in late summer 490 B.C., won the Battle of Marathon, ran the 26 miles to Athens, said a single word "Victory," and dropped dead. At Marathon Greece, freedom, democracy, and Western civilization faced and defeated the forces of Oriental absolutism. It is a battle that has been fought many times. It will be fought many more times. Freedom must always be prepared to fight just to be free.

Tuesday, April 13, 2021

Your IP Matters! How to Protect Your Ingenuity and Creativity from Infringing Imports

In recognition of this year’s World Intellectual Property Day theme, “IP & SMEs: Taking your ideas to market,” U.S. Customs and Border Protection (CBP), Office of Trade, is pleased to announce the following complimentary webinar: Your IP Matters! How to Protect Your Ingenuity and Creativityfrom Infringing ImportsApril 26th, 2021, 1:00 – 2:30 p.m. (Eastern time).

For more information or to register CLICK HERE.

USITC Accepting Comments on Caribbean Basin Economic Recovery Act

On April 13, 2021, the U.S. International Trade Commission published in the Federal Register (86 FR 19283) Caribbean Basin Economic Recovery Act: Impact on U.S. Industries and Consumers and on Beneficiary Countries.

Section 215(a)(1) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2704(a)(1)) requires that the Commission submit biennial reports to the Congress and the President regarding the economic impact of the Act on U.S. industries and consumers, and on the economy of the beneficiary countries. Section 215(b)(1) requires that the reports include, but not be limited to, an assessment regarding:

(A) The actual effect, during the period covered by the report, of [CBERA] on the United States economy generally, as well as on those specific domestic industries which produce articles that are like, or directly competitive with, articles being imported into the United States from beneficiary countries; and

B) the probable future effect which this Act will have on the United States economy generally, as well as on such domestic industries, before the provisions of this Act terminate.

The report will cover trade with the 17 beneficiary countries: Antigua and Barbuda, Aruba, The Bahamas, Barbados, Belize, British Virgin Islands, Curac ̧ao, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Trinidad and Tobago.

Sunday, April 11, 2021

Biden Administration Legal Team Outlines Defense in China Section 301 Case

On September 11, 2020, a lawsuit was filed challenging the legality of the Section 301 tariffs on China. It specifically challenges List 3 and List 4. Over 3,000 additional plantiffs have filed copy cat cases.

On March 12, 2021, the government filed its outline of ANTICIPATED DEFENSES

1. USTR was acting at the direction of the President in promulgating List 3 and List 4, and the President is not subject to the Administrative Procedures Act (APA).

2. Review of the President’s discretionary decisions, and USTR’s implementation of those decisions, present a non-justiciable, political question.

3. Even if the challenged actions could be considered actions of USTR, substantial deference is afforded, and the Court should not interpose because there was no clear misconstruction of a governing statute, significant procedural violation, or action outside delegated authority.

4. USTR (acting at the direction of the President) possessed the authority under Section 307 of the Trade Act to promulgate List 3 and List 4, because the burden or restriction on United States commerce of China’s acts, policies, and practices that were the subject of the Section 301 action continued to increase, including following the one-year investigation period, and because the previous actions taken in response to the Section 301 investigation proved to no longer be appropriate, as the actions were not effective in eliminating the unfair trade practices that were the subject of that investigation. In addition, Section 307 does not limit modifications to merely delaying, tapering, or terminating an action.

5. Alternatively, if the challenged actions constitute agency action, they are exempt from the APA’s informal rulemaking requirements, because they qualify for the foreign affairs function exception.

6. Even if the APA’s informal rulemaking requirements apply, USTR’s actions in promulgating List 3 and List 4 complied with all statutory requirements, and they were not arbitrary and capricious, contrary to law, or in excess of statutory authority.

More information is available at https://news.bloomberglaw.com/international-trade/biden-white-house-defends-trump-china-tariffs-in-legal-showdown.

U.S. Secretary of State Reports that Hong Kong Does not Warrent Differential Treatment from China

Over the past year, the People’s Republic of China (PRC) has continued to dismantle Hong Kong’s high degree of autonomy, in violation of its obligations under the Sino-British Joint Declaration and Hong Kong’s Basic Law. In particular, the PRC government's adoption and the Hong Kong government’s implementation of the National Security Law (NSL) have severely undermined the rights and freedoms of people in Hong Kong.

Each year, the Department of State submits to Congress the Hong Kong Policy Act Report and accompanying certification. In conjunction with this year’s report, U.S. Secretary of State Anthony Bliken has certified to Congress that Hong Kong does not warrant differential treatment under U.S. law in the same manner as U.S. laws were applied to Hong Kong before July 1, 1997.

This report documents many of the actions the PRC and Hong Kong governments have taken against Hong Kong’s promised high degree of autonomy, freedoms, and democratic institutions. These include the arbitrary arrests and politically-motivated prosecutions of opposition politicians, activists, and peaceful protesters under the NSL and other legislation; the postponement of Legislative Council elections; pressure on judicial independence and academic and press freedoms; and a de facto ban on public demonstrations.

Army and Air Force Coat Contract Awarded

National Industries for the Blind, Alexandria, Virginia, has been awarded a maximum $20,994,706 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for coats. This is a two-year contract with no option periods. Locations of performance are Virginia and North Carolina, with an April 8, 2023, ordering period end date. Using military services are Army and Air Force. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-B106).

Agathon Associates Comments on FTC Wool Rules

On February 8, 2021, the Federal Trade Commission published in the Federal Register (86 FR 8641) Agency Information Collection Activities; Proposed Collection; Comment Request; Extension

The Wool Products Labeling Act of 1939 (Wool Act) prohibits the misbranding of wool products. The Wool Rules establish disclosure requirements that assist consumers in making informed purchasing decisions and recordkeeping requirements that assist the Commission in enforcing the Rules. The FTC provided this opportunity for public comment before requesting that OMB extend the existing clearance for the information collection requirements contained in the Commission's Wool Rules.

Agathon Associates submitted the following comment--

The Rules and Regulations under the Wool Products Labeling Act of 1939 serve three important functions. (1) They implement the Wool Act's charge to the Commission to enforce the Wool Act and provide clarification regarding the Commission's enforcement of the Act. (2) They implement industry best practices relating to the labeling of article of wool, thus providing some protection for good actors in the wool apparel trade from unfair competition from those who would make incomplete, inaccurate, or false representations about their merchandise absent the Rules. (3) They protect consumers from such incomplete, inaccurate, or false representations regarding merchandise. This third point is extremely important. Consumers have no independent way of verifying country of origin and fiber content of apparel. They rely on the labels that are required, and regulated, by the Wool Rules. Consumers are defrauded when articles they buy are not as represented on the labels.

The Rules do not impose an unnecessary burden on businesses. They are what honest traders would do anyway; they are a burden to only those who would cheat consumers and unfairly compete against other business. The Rules have been in place for many years; businesses know and understand their obligation to comply, and compliance costs are not excessively burdensome.

Respectfully submitted, David Trumbull

Thursday, April 8, 2021

Air Force Poly-Wool Fabric Contract Awarded

Burlington Industries LLC, Greensboro, North Carolina, has been awarded a maximum $10,046,553 modification (P00011) exercising the third one-year option period of a one-year base contract (SPE1C1-18-D-1045) with four one-year option periods for poly-wool, serge cloth. This is a fixed-price with economic-price-adjustment, indefinite-delivery/indefinite-quantity contract. Location of performance is North Carolina, with an April 10, 2022, ordering period end date. Using military service is Air Force. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

California Requirement for Flammability of Upholstered Furniture Will Be Federal Standard Effective June 25, 2021

In a Federal Register Noticee scheduled to be published April 9, 2021, the Consumer Product Safety Commission (Commission or CPSC) is issuing a direct final rule to codify in the Code of Federal Regulations the statutory requirements for the flammability of upholstered furniture under the COVID -19 Regulatory Relief and Work From Home Safety Act. This Act mandates that CPSC promulgate California Technical Bulletin 117-2013 as a flammability standard for upholstered furniture under section 4 of the Flammable Fabrics Act. The rule is effective on June 25, 2021, and applies to upholstered furniture manufactured, imported, or reupholstered on or after that date.

Wednesday, April 7, 2021

Army and Air Force Trouser Contract Awarded

Golden Manufacturing Co. Inc., Golden, Mississippi, has been awarded a maximum $22,633,569 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for trousers. This is a two-year base contract with one two-year option period. This was a competitive acquisition with nine responses received. Location of performance is Mississippi, with an April 6, 2023, ordering period end date. Using military services are Army and Air Force. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-1456).

Face Cover Contract Awarded

Karla’s and Emma’s Knits LLC, Brooklyn, New York, has been awarded a maximum $27,576,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract under solicitation SPE1C1-20-R-0162 for Lot 1 multi-ply face covers. This was a competitive acquisition with 30 responses received. This is a two-year contract with no option periods. Location of performance is New York, with an April 6, 2023, ordering period end date. Using customers are Army, Civil-Military Operations and National Guard. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-1446).

RH Recalls Children’s Bath Wraps Due to Violation of Federal Flammability Standard

This recall involves three styles of hooded children’s bath wraps: Animal, Heathered Plush, and Luxe Sherpa. The bath wraps have attached belts and patch pockets. The size and “RH BABY&CHILD” or “baby & child RESTORATION HARDWARE” are printed on a sewn-in label at the neck.

The Animal Bath Wraps are made of cotton terry and have faces on the hoods sewn to resemble one of the following animals: Bunny (ivory or petal colors), cat, dog, dragon, elephant, lion, monkey, moose or unicorn. They were sold in sizes 2-3 years, 3-4 years and 4-5 years.

The Heathered Plush Bath Wraps are made of a heathered polyester plush fabric and were sold in blue, gray, lilac and pink, and in sizes 18-24 months, 2-3 years, 3-4 years, 4-5 years, 6-7 years and 8-10 years.

The Luxe Sherpa Bath Wraps have a jersey exterior made of a polyester, rayon and spandex blend and a polyester sherpa fleece lining. They were sold in charcoal, gray, ivory, lilac, navy and pink, and in sizes 18-24 months, 2-3 years, 3-4 years, 4-5 years, 6-7 years and 8-10 years.

The SKU or UPC of the bath wraps included in this recall can be found at https://rh.com/content/page.jsp?id=safety-recalls. The SKU or UPC is located on the purchase receipt.

Remedy: Consumers should stop using the recalled bath wraps and contact RH for a full refund of the purchase price, or credit of $35 for the Animal Bath Wrap, $32 for the Heathered Bath Wrap or $39 for the Sherpa Bath Wrap, if the consumer’s purchase price cannot be determined. RH is contacting all known purchasers directly.

Incidents/Injuries: No incidents or injuries have been reported.

Sold At: RH Baby & Child Galleries and RH Outlets nationwide and online at www.rh.com and www.rhbabyandchild.com from April 2014 through November 2020 for between $1 and $64.

Importer(s): RH US LLC, of Corte Madera, Calif.

Manufactured In: China or Turkey

Recall number: 21-102

Read more and see photos HERE.

Army and Air Force Clothing Contract Awarded

Goodwill Industries of South Florida Inc., Miami, Florida, has been awarded a maximum $42,048,706 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for coats and trousers. This is a two-year contract with no option periods. Location of performance is Florida, with an April 5, 2023, ordering period end date. Using military services are Army and Air Force. Type of appropriation is fiscal 2021 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-N136).

Thursday, April 1, 2021

2021 National Trade Estimate Report on Foreign Trade Barriers

On March 31, 2021, the Office of the United States Trade Representative released the 2021 National Trade Estimate Report

Published annually since 1985, the NTE Report is a comprehensive review of significant foreign trade barriers affecting U.S. exports of goods and services. The 570-page report examines 65 trading partners and country groups, including the U.S.’ largest trading partners, all 20 U.S. FTA partners, and other economies and country groupings of interest such as the Arab League, the United Kingdom (included as a separate entity for the first time in this report), and the European Union. Together, these economies account for 99 percent of U.S. goods trade and 87 percent of U.S. services trade.

The NTE Report covers significant trade barriers in 11 areas, including (1) import policies such as tariffs, import licensing and customs barriers; (2) technical barriers to trade; (3) sanitary and phytosanitary measures; (4) subsidies; (5) government procurement; (6) intellectual property protection; (7) services barriers; (8) barriers to digital trade and electronic commerce; (9) investment barriers; (10) competition; and (11) other barriers.

Taken as a whole, the NTE Report highlights significant barriers that present major policy challenges with implications for future U.S. growth opportunities, and the fairness of the global economy.

This report discusses the largest export markets for the United States, covering 61 countries, the European Union, Taiwan, Hong Kong, and the Arab League. The discussion of Chinese trade barriers is structured and focused to align more closely with other Congressional reports prepared by USTR on U.S.-China trade issues. The China section includes cross-references to other USTR reports where appropriate. As always, omission of particular countries and barriers does not imply that they are not of concern to the United States.

OTEXA’s Export Promotion Services Help U.S. Companies Succeed

See how the U.S. Department of Commerce Office of Textiles and Apparel helped CTF Enterprises increase sales across several international markets.

CTF Enterprises is a small business in Portland, Oregon that has a vision: to revolutionize the way the world repairs zippers. FixnZip, its unique patented product, is a universal zipper slider that can repair zippers anywhere without tools or sewing.

In 2015, CTF Enterprises reached out to OTEXA to help market their product and to grow internationally. That year, the company participated for the first time in OTEXA’s Sample Booth at the Defense and Security Equipment International (DSEI) in London, UK. Since then, CTF Enterprises has participated in nearly a dozen events with OTEXA.

The company’s sales have increased exponentially since it first launched in 2015. CTF Enterprises now has more than a dozen international distributors worldwide and sells in 16 countries. With international distribution systems and partners in place, the company continues to experience strong international sales growth and brand recognition.

In spite of major challenges caused by the COVID-19 pandemic, CTF Enterprises reported historic sales for 2019 and 2020. The company's success can be attributed to its ability to sell in multiple markets and not being reliant on a single domestic .market.otexamadeinusa@trade.gov.

Contact OTEXA at otexamadeinusa@trade.gov.

Wednesday, March 31, 2021

30 Counterfeit Items Worth Over $21K Seized by CBP Port Huron

On March 2, 2021, U.S. Customs and Border Protection (CBP), Office of Field Operations at the Blue Water Bridge intercepted and seized a shipment containing 30 counterfeit designer products. The shipment was coming from Canada, and had the items been real, the MSRP for these products would have been over $21,000.

Nationwide in Fiscal Year 2020, CBP seized 26,503 shipments containing goods that violated intellectual property rights. The total estimated value of the seized goods, had they been genuine, was nearly $1.3 billion.

Read more HERE.

Apparel and Footwear from the United Kingdom on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16829) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of the United Kingdom's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

The United Kingdom has adopted a DST that applies a two percent tax on the revenues of certain search engines, social media platforms and online marketplaces. The United Kingdom's DST applies only to companies with digital services revenues exceeding [pound]500 million and United Kingdom digital services revenues exceeding [pound]25 million.

On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that the United Kingdom's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from the United Kingdom.

The list published at 86 FR 16829 is quite extensive and contains the following articles of protential interest to clients of Agathon Associates.

Note: All products that are classified in the eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) that are listed in this Annex are covered by the proposed action. The product descriptions that are contained in this Annex are provided for informational purposes only, and are not intended to delimit in any way the scope of the proposed action. Any questions regarding the scope of a particular HTSUS subheading should be referred to U.S. Customs and Border Protection. In the product descriptions, the abbreviation ``nesoi'' means ``not elsewhere specified or included''.

------------------------------------------------------------------------
      HTSUS subheading                   Product description
------------------------------------------------------------------------
6104.43.20.................  Women's or girls' dresses, knitted or
                              crocheted, of synthetic fibers, nesoi.
6201.12.20.................  Men's or boys' overcoats, carcoats, capes,
                              & similar coats of cotton, not knit or
                              crocheted, not containing 15% or more by
                              wt of down, etc.
6201.92.45.................  Men's or boys' anoraks, windbreakers & sim
                              articles nesoi, not knit/crochet, cotton,
                              not cont. 15% or more by wt of down, etc,
                              o/than rec perf outwear.
6202.12.20.................  Women's or girls' overcoats, carcoats, etc,
                              not knitted or crocheted, of cotton, not
                              containing 15% or more by weight of down,
                              etc.
6202.13.40.................  Women's or girls' overcoats, carcoats,
                              capes, cloaks and similar articles, not
                              knitted or crocheted, of man-made fibers,
                              nesoi.
6202.92.90.................  Women's/girls' anoraks, windbreakers &
                              similar articles, nt knit/crochet, cotton,
                              nt cont. 15% or more by wt of down, etc, o/
                              than rec perf outwear.
6204.43.40.................  Women's or girls' dresses, not knitted or
                              crocheted, of synthetic fibers, nesoi.
6204.44.40.................  Women's or girls' dresses, not knitted or
                              crocheted, of artificial fibers, nesoi.
6204.49.10.................  Women's or girls' dresses, not knitted or
                              crocheted, containing 70% or more by
                              weight of silk or silk waste.
6205.20.20.................  Men's or boys' shirts, not knitted or
                              crocheted, of cotton, nesoi.
6215.10.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of silk or silk waste.
6403.59.30.................  Footwear w/outer soles and uppers of
                              leather, not covering the ankle, welt,
                              nesoi.
6403.59.90.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for
                              persons other than men, youths and boys.
6403.91.30.................  Footwear w/outer soles of rubber/plastics/
                              composition leather & uppers of leather,
                              covering the ankle, welt.
6403.99.60.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, n/cov.
                              ankle, n/welt, for men, youths and boys,
                              nesoi.
6404.20.40.................  Footwear w/outer soles of leather/comp.
                              leath., n/o 50% by wt. rub./plast. or rub./
                              plast./text. & 10%+ by wt. rub./plast.,
                              val. o/$2.50/pr.
------------------------------------------------------------------------

Wool Yarn Put up for Retail and Certain Brassieres from India on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16824) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of India's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

India has adopted a DST that imposes a two percent tax on revenue generated from a broad range of digital services offered in India, including digital platform services, digital content sales, digital sales of a company’s own goods, data-related services, software-as-a- service, and several other categories of digital services. India’s DST only applies to ‘‘non-resident’’ companies.

On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that India's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from India.

The list published at 86 FR 16824 is quite extensive and contains the articles of protential interest to clients of Agathon Associates.

Carpets and Home Textiles from Turkey on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16822) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of Turkey's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

Turkey has adopted a DST that applies to companies that during the previous calendar year, generated [euro]750 million or more in worldwide revenues and TRY 20 million or more in revenues deriving from the provision of digital services in Turkey.

On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that Turkey's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from Turkey.

The list published at 86 FR 16822 is quite extensive and contains the following articles of protential interest to clients of Agathon Associates.

Note: All products that are classified in the eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) that are listed in this Annex are covered by the proposed action. The product descriptions that are contained in this Annex are provided for informational purposes only, and are not intended to delimit in any way the scope of the proposed action. Any questions regarding the scope of a particular HTSUS subheading should be referred to U.S. Customs and Border Protection. In the product descriptions, the abbreviation ``nesoi'' means ``not elsewhere specified or included''.

------------------------------------------------------------------------
      HTSUS subheading                   Product description
------------------------------------------------------------------------
5701.10.16.................  Carpets & other textile floor coverings,
                              hand-knotted or hand-inserted, w/ov 50% by
                              weight of the pile of fine animal hair,
                              nesoi.
5701.10.40.................  Carpets and other textile floor coverings,
                              of wool or fine animal hair, hand-hooked
                              (tufts were inserted and knotted by hand
                              or hand tool).
5701.10.90.................  Carpets and other textile floor coverings,
                              of wool or fine animal hair, not hand-
                              hooked, not hand knotted during weaving.
5701.90.10.................  Carpet and other textile floor covering,
                              knotted, of text. materials (not wool/
                              hair) nesoi, pile inserted & knotted
                              during weaving or knitting.
5702.10.90.................  Kelem, Schumacks, Karamanie and similar
                              hand-woven rugs, other than certified hand-
                              loomed and folklore products.
5702.31.10.................  Wilton, velvet and like floor coverings of
                              pile construction, woven, not tufted or
                              flocked, not made up, of wool or fine
                              animal hair.
5702.31.20.................  Carpets and other textile floor coverings
                              of pile construction, woven, not tufted or
                              flocked, not made up, of wool/fine animal
                              hair, nesoi.
5702.42.10.................  Wilton, velvet and like floor coverings of
                              pile construction, woven, not tufted or
                              flocked, made up, of man-made textile
                              materials.
5702.49.10.................  Carpets not other textile floor coverings
                              of pile construction, woven, not tufted or
                              flocked, made up, of cotton.
5702.92.10.................  Hand-loomed carpet & other textile floor
                              coverings, not of pile construction,
                              woven, made up, of man-made textile
                              materials, nesoi.
5702.92.90.................  Carpet & other textile floor coverings, not
                              of pile construction, woven, made up, of
                              man-made textile materials, nesoi.
5702.99.05.................  Hand-loomed carpets and other textile floor
                              coverings, not of pile construction,
                              woven, made up, of cotton.
5702.99.15.................  Carpets and other textile floor coverings,
                              not of pile construction, woven, made up,
                              of cotton, nesoi.
5703.20.20.................  Carpets and other textile floor coverings,
                              tufted, whether or not made up, of nylon
                              or other polyamides, nesoi.
5703.30.80.................  Carpets & other textile floor coverings,
                              tufted, whether or not made up, of man-
                              made textile materials (not nylon/other
                              polyamides), nesoi.
5703.90.00.................  Carpets and other textile floor coverings,
                              tufted, whether or not made up, of other
                              textile materials nesoi.
6302.22.20.................  Bed linen, not knitted or crocheted,
                              printed, of manmade fibers, nesoi.
6302.32.20.................  Bed linen, not knitted or crocheted, not
                              printed, of manmade fibers, nesoi.
6303.91.00.................  Curtains (including drapes), interior
                              blinds and valances of cotton, not knitted
                              or crocheted.
------------------------------------------------------------------------

Travel Goods, Apparel of Wool, Cashmere, or Other Fibers, and Footwear from Italy on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16819) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of Italy's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

Italy has adopted a DST that applies to companies that during the previous calendar year, generated [euro]750 million or more in worldwide revenues and [euro]5.5 million or more in revenues deriving from the provision of digital services in Italy.

On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that Italy's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from Italy.

The list published at 86 FR 16819 is quite extensive and contains the following articles of protential interest to clients of Agathon Associates.

Note: All products that are classified in the eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) that are listed in this Annex are covered by the proposed action. The product descriptions that are contained in this Annex are provided for informational purposes only, and are not intended to delimit in any way the scope of the proposed action. Any questions regarding the scope of a particular HTSUS subheading should be referred to U.S. Customs and Border Protection. In the product descriptions, the abbreviation ``nesoi'' means ``not elsewhere specified or included''.

------------------------------------------------------------------------
      HTSUS subheading                   Product description
------------------------------------------------------------------------
4202.29.10.................  Handbags w. or w/o shld. strap or w/o
                              handle of mat. (o/t leather, shtng. of
                              plas., tex. mat., vul. fib. or paperbd.),
                              paper cov., of plas.
4202.29.50.................  Handbags w. or w/o shld. strap or w/o
                              handle of mat. (o/t leather, shtng. of
                              plas., tex. mat., vul. fib. or paperbd.),
                              pap.cov.,of mat. nesoi.
4202.29.90.................  Handbags with or without shoulder straps or
                              without handle, with outer surface of
                              vulcanized fiber or of paperboard, not
                              covered with paper.
4202.31.30.................  Articles of a kind normally carried in the
                              pocket or handbag, with outer surface of
                              reptile leather.
4203.29.30.................  Men's gloves, mittens and mitts of leather
                              or composition leather, nesoi, seamed.
4203.29.40.................  Gloves, mittens and mitts of leather or
                              composition leather, nesoi, not lined, for
                              persons other than men.
4203.29.50.................  Gloves, mittens and mitts of leather or
                              composition leather, nesoi, lined, for
                              persons other than men.
6103.10.10.................  Men's or boys' suits, knitted or crocheted,
                              of wool or fine animal hair.
6103.31.00.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of wool or
                              fine animal hair.
6103.32.00.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of cotton.
6103.33.20.................  Men's or boys' suit-type jackets and
                              blazers, knitted or crocheted, of
                              synthetic fibers, nesoi.
6103.39.80.................  Men's or boys' suit-type jackets and
                              blazers, of textile mats, (except wool,
                              cotton, or mmf), cont less than 70% by wt
                              of silk, knitted/croc.
6104.31.00.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of wool or
                              fine animal hair.
6104.32.00.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of cotton.
6104.33.20.................  Women's or girls' suit-type jackets and
                              blazers, knitted or crocheted, of
                              synthetic fibers, nesoi.
6110.30.10.................  Sweaters, pullovers, sweatshirts and
                              similar articles, knitted or crocheted, of
                              man-made fibers, cont. 25% or more by
                              weight of leather.
6117.80.20.................  Ties, bow ties and cravats, containing 70%
                              or more by weight of silk or silk waste,
                              knitted or crocheted.
6117.80.87.................  Ties, bow ties and cravats, containing
                              under 70% by weight of silk or silk waste,
                              knitted or crocheted.
6117.80.95.................  Made up clothing accessories (excl shawl,
                              scarve, and like, tie, cravat, headband,
                              ponytail holder and like), cont < 70% wt
                              of silk, k/c.
6203.19.10.................  Men's or boys' suits, not knitted or
                              crocheted, of cotton.
6203.31.90.................  Men's or boys' suit-type jackets and
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted.
6203.32.10.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              cotton, containing 36 percent or more of
                              flax fibers.
6203.32.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              cotton, under 36% by weight of flax.
6203.33.10.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 36% or more of
                              wool or fine animal hair.
6203.33.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, under 36% by weight of
                              wool.
6203.39.10.................  Men's or boys' suit-type jackets and
                              blazers, of artificial fibers, containing
                              36% or more by weight of wool or fine
                              animal hair, not k/c.
6203.39.20.................  Men's or boys' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              artificial fibers, under 36% by weight of
                              wool.
6203.39.50.................  Men's or boys' suit-type jackets and
                              blazers, of textile materials (except
                              wool, cotton or mmf), cont 70% or more by
                              weight of silk, not k/c.
6203.39.90.................  Men's or boys' suit-type jackets and
                              blazers, of text materials (except wool,
                              cotton or mmf), containing under 70% by
                              weight of silk, not k/c.
6204.31.10.................  Women's or girls' suit-type jackets &
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted, cont. 30% or more of
                              silk/silk waste.
6204.31.20.................  Women's or girls' suit-type jackets and
                              blazers, of wool or fine animal hair, not
                              knitted or crocheted, under 30% by weight
                              of silk.
6204.32.20.................  Women's or girls' suit-type jackets and
                              blazers, of cotton, not knitted or
                              crocheted, under 36% flax.
6204.33.10.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 30% or more of
                              silk/silk waste.
6204.33.40.................  Women's or girls' suit-type jackets &
                              blazers, not knitted or crocheted, of
                              synthetic fibers, cont. 36% or more of
                              wool or fine animal hair.
6204.33.50.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              synthetic fibers, nesoi.
6204.39.20.................  Women's or girls' suit-type jackets &
                              blazers, not knitted or crocheted, of
                              artificial fibers, cont. 36% or more of
                              wool or fine animal hair.
6204.39.30.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              artificial fibers, under 36% by weight of
                              wool.
6204.39.60.................  Women's or girls' suit-type jackets and
                              blazers, not knitted/crocheted, of textile
                              materials nesoi, cont. 70% + of silk or
                              silk waste.
6204.39.80.................  Women's or girls' suit-type jackets and
                              blazers, not knitted or crocheted, of
                              textile materials nesoi.
6211.39.03.................  Rec perf outwear, men's or boys' track
                              suits or other garments nesoi, not knitted
                              or crocheted, of wool or fine animal hair.
6211.39.30.................  Men's or boys' track suits or other
                              garments nesoi, not knitted or crocheted,
                              of wool or fine animal hair, o/than rec
                              perf outwear.
6215.10.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of silk or silk waste.
6215.20.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of man-made fibers.
6215.90.00.................  Ties, bow ties and cravats, not knitted or
                              crocheted, of textile materials nesoi.
6403.59.60.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for men,
                              youths and boys.
6403.91.60.................  Footwear w/outer soles of rubber/plastics/
                              composition leather & uppers of leather,
                              covering the ankle, n/welt, for men,
                              youths and boys.
6403.91.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, cov.
                              ankle, n/welt, for persons other than men/
                              youths/boys.
6404.20.40.................  Footwear w/outer soles of leather/comp.
                              leath., n/o 50% by wt. rub./plast. or rub./
                              plast./text. & 10%+ by wt. rub./plast.,
                              val. o/$2.50/pr.
------------------------------------------------------------------------

Textiles from Austria on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16816) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of Austria's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

Austria has adopted a DST that imposes a 5% tax on gross revenues from digital advertising services provided in Austria. The DST applies only to companies with annual global revenues of [euro]750 million or more, and annual revenues from digital advertising services in Austria of [euro]25 million or more.

On January 14, 2021, based on information obtained during a investigation and the advice of the Section 301 Committee, the U.S. Trade Representative determined that Austria's DST is unreasonable or discriminatory and burdens or restricts U.S. commerce, and therefore is actionable under sections 301(b) and 304(a) of the Trade Act (19 U.S.C. 2411(b) and 2414(a))

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from Austria.

The list published at 86 FR 16816 is quite extensive and contains the following articles of protential interest to clients of Agathon Associates.

Note: All products that are classified in the eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) that are listed in this Annex are covered by the proposed action. The product descriptions that are contained in this Annex are provided for informational purposes only, and are not intended to delimit in any way the scope of the proposed action. Any questions regarding the scope of a particular HTSUS subheading should be referred to U.S. Customs and Border Protection. In the product descriptions, the abbreviation ``nesoi'' means ``not elsewhere specified or included''.

------------------------------------------------------------------------
      HTSUS subheading                   Product description
------------------------------------------------------------------------
5209.12.00.................  Unbleached 3- or 4-thread twill fabrics of
                              cotton, including cross twill, 85 percent
                              or more cotton by weight, weighing more
                              than 200 g/m2.
5402.49.91.................  Other yarns, monofil; multifil, untwisted
                              or twisted > or = to 5, not exceeding 50
                              turns per meter of other synthetic, not
                              for retail sale.
5404.19.10.................  Racket strings of synthetic monofilament of
                              67 decitex or more and of which no cross-
                              sectional dimension exceeds 1 mm.
5404.19.80.................  Synthetic monofilament (exc.
                              polypropylene), of 67 decitex or more and
                              with no cross-sectional dimension > 1 mm,
                              nesoi.
5603.94.10.................  Nonwoven floor covering underlays (not of
                              man-made filaments), weighing >150 g/
                              square m, whether or not impreg, coated,
                              cov or laminated.
5603.94.90.................  Nonwovens nesoi (not of man-made
                              filaments), weighing >150 g/square m,
                              whether or not impregnated, coated,
                              covered but not laminated.
------------------------------------------------------------------------

Travel Goods, Footwear, and Hats from Spain on USTR List for Potential 25% Tariff

On March 31, 2021, the Office of the United States Trade Representative (USTR) published in the Federal Register (86 FR 16813) a request for written comments regarding a potential trade action in connection with the Section 301 investigation of Spain's Digital Services Tax (DST). USTR also will convene virtual public hearings and accept rebuttal comments in relation to the potential action.

Comments are due by April 30, 2021.

Spain has adopted a DST that applies a three percent tax on certain digital services revenues related to online advertising services, online intermediary services, and data transmission services. Companies with worldwide revenues of [euro]750 million or more and [euro] million in certain digital services revenues are subject to the DST.

Based on information obtained during an investigation, USTR prepared a comprehensive report on Spain's DST (Spain DST Report). The Spain DST Report is posted on the USTR website at https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-digital-services-taxes. The report includes a full description of Spain's DST, and supports findings that Spain's DST is unreasonable and discriminatory and burdens or restricts U.S commerce.

USTR proposes to impose additional tariffs of up to 25 percent ad valorem on a list of goods from Spain.

The list published at 86 FR 16813 is quite extensive and contains the following articles of protential interest to clients of Agathon Associates.

Note: All products that are classified in the eight-digit subheadings of the Harmonized Tariff Schedule of the United States (HTSUS) that are listed in this Annex are covered by the proposed action. The product descriptions that are contained in this Annex are provided for informational purposes only, and are not intended to delimit in any way the scope of the proposed action. Any questions regarding the scope of a particular HTSUS subheading should be referred to U.S. Customs and Border Protection. In the product descriptions, the abbreviation ``nesoi'' means ``not elsewhere specified or included''.

------------------------------------------------------------------------
      HTSUS subheading                   Product description
------------------------------------------------------------------------
4202.21.90.................  Handbags, with or without shoulder strap or
                              without handle, with outer surface of
                              leather, composition or patent leather,
                              nesoi, over $20 ea.
4202.22.15.................  Handbags, with or without shoulder straps
                              or without handle, with outer surface of
                              sheeting of plastics.
4203.30.00.................  Belts and bandoliers with or without
                              buckles, of leather or of composition
                              leather.
6402.99.31.................  Footwear w/outer soles & uppers of rubber
                              or plastics, nesoi, n/cov. ankle, w/ext.
                              surf. of uppers o/90% rubber or plastics,
                              nesoi.
6403.51.30.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, welt.
6403.51.60.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, n/
                              welt, for men, youths and boys.
6403.51.90.................  Footwear w/outer soles and uppers of
                              leather, nesoi, covering the ankle, n/
                              welt, for persons other than men, youths
                              and boys.
6403.59.15.................  Turn or turned footwear w/outer soles and
                              uppers of leather, not covering the ankle.
6403.59.30.................  Footwear w/outer soles and uppers of
                              leather, not covering the ankle, welt,
                              nesoi.
6403.59.60.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for men,
                              youths and boys.
6403.59.90.................  Footwear w/outer soles and uppers of
                              leather, not cov. ankle, n/welt, for
                              persons other than men, youths and boys.
6403.91.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, cov.
                              ankle, n/welt, for persons other than men/
                              youths/boys.
6403.99.60.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, n/cov.
                              ankle, n/welt, for men, youths and boys,
                              nesoi.
6403.99.90.................  Footwear w/outer soles of rubber/plastics/
                              comp. leather & uppers of leather, n/cov.
                              ankle, for women/child./infants, val. over
                              $2.50/pair.
6404.19.39.................  Footwear w/outer sole rub./plast. & upp.
                              textile, nesoi, w/open toes/heels or slip-
                              on, >10% by wt. rub./plast. not subj note
                              5 ch 64.
6404.20.40.................  Footwear w/outer soles of leather/comp.
                              leath., n/o 50% by wt. rub./plast. or rub./
                              plast./text. & 10%+ by wt. rub./plast.,
                              val. o/$2.50/pr.
6404.20.60.................  Footwear w/outer soles of leather/comp.
                              leather & uppers of textile, nesoi.
6405.90.90.................  Footwear, nesoi, w/outer soles and uppers o/
                              than leather or comp. leather, not
                              disposable.
6504.00.60.................  Hats and headgear, plaited or assembled
                              from strips of veg. fibers or unspun
                              fibrous veg. materials and/or paper yarn,
                              not sewed.
6505.00.04.................  Hats and headgear of fur felt made from hat
                              forms and hat bodies of 6501.
6505.00.08.................  Hats and headgear made from hat forms and
                              hat bodies of 6501, except of fur felt.
6505.00.15.................  Hats and headgear, of cotton and/or flax,
                              knitted.
6505.00.30.................  Hats and headgear, of wool, knitted or
                              crocheted or made up from knitted or
                              crocheted fabric.
6505.00.60.................  Hats and headgear, of man-made fibers,
                              knitted or crocheted or made up from
                              knitted or crocheted fabrics, not in part
                              of braid.
------------------------------------------------------------------------

Face Cover Contract Awarded

String King Lacrosse LLC, Gardena, California, has been awarded a maximum $22,111,247 firm-fixed-price, indefinite-delivery/indefinite-quantity contract under solicitation SPE1C1-21-R-0040 for Lot 3 multi-ply face covers. This was a competitive acquisition with 36 offers received. This is a one-year base contract with no option periods. Location of performance is California, with a March 29, 2022, ordering period end date. Using customer is Department of Health and Human Services. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-21-D-1463).

Saturday, March 27, 2021

Notice of Finding That Certain Disposable Gloves Produced in Malaysia With the Use of Convict, Forced or Indentured Labor Are Being, or Are Likely To Be, Imported Into the United States

On March 29, 2021, U.S. Customs and Border Protection published in the Federal Register (86 FR 16380) notice thatcertain disposable gloves, have been mined, produced, or manufactured in Malaysia by Top Glove Corporation Bhd with the use of convict, forced or indentured labor, and are being, or are likely to be, imported into the United States.

Friday, March 26, 2021

Army Boot Contract Awarded

McRae Industries Inc., Mt. Gilead, North Carolina, has been awarded a maximum $15,319,020 modification (P00009) exercising the third one-year option period of a one-year base contract (SPE1C1-18-D-1034) with four one-year option periods for temperate-weather coyote boots. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Location of performance is North Carolina, with a March 29, 2022, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Army and Air Force Parka Contract Awarded

Tennier Industries Inc., Delray Beach, Florida, has been awarded a $14,884,350 modification (P00007) exercising the second one-year option period of a one-year base contract (SPE1C1-19-D-1155) with two one-year option periods for parkas. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Locations of performance are Florida and Alabama, with an April 7, 2022, ordering period end date. Using military services are Army and Air Force. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Contracts Awarded for Multi-Ply Face Covers

Parkdale Advanced Materials Inc., Gastonia, North Carolina (SPE1C1-21-D-1457, $20,504,164); and HC Contracting Inc., New York, New York (SPE1C1-21-D-1460, $20,504,164), have each been awarded a firm-fixed-price, indefinite-delivery/indefinite-quantity contract under solicitation SPE1C1-21-R-0040 for LOT 1 and LOT 2 multi-ply face covers. These were competitive acquisitions with 32 offers received. These are one-year base contracts with no option periods. Locations of performance are New York, Georgia and North Carolina, with a March 25, 2022, ordering period end date. Using customer is Department of Health and Human Services. Type of appropriation is fiscal 2021 through 2022 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Section 301 Tariffs on China: Analysis and Guidance

Section 301 Tariffs on China: Analysis and Guidance

 

prepared

 

March 23, 2021

 

by

 

David Trumbull, Agathon Associates

Glenn Page, Foreign Trade Zone Solutions LLC

 

The U.S. Section 301 tariffs on China have been a burden on many U.S. business since implemented by the Trump administration in 2018.  As a new administration settles in  Washington, the tariffs do not appear to be going away anytime soon. The good news is there are tariff mitigation strategies that can be employed to avoid or reduce the tariffs altogether.

 

China's history on employing unfair trade practices is well-established. Early in the Trump administration, the Office of the U.S. Trade Representative,(USTR) conducted an investigation concerning these unfair trade allegations by China under Section 301 of the Trade Act of 1974.  As a result of that investigation, it was discovered that China routinely engages in unfair trade acts and policies, utilizes cyber practices to steal U.S. intellectual property, and imposes grossly unfair innovation and technology transfer mandates upon U.S businesses operating in China.  To address those findings, the United States imposed tariffs on products from China. Many classes of merchandise were made subject to 25% Section 301 tariff. As of now, it appears the President Biden has no near-term plans to eliminate or modify the tariffs.

 

If your company imports from China and is incurring the 25% tariff, on top of the general rate of duty, you know, first-hand, that this tariff action, however well-intended and needed, is imposing considerable collateral damage on U.S. businesses. You probably have questions such as--

 

Will President Biden eliminate or modify the tariffs?

 

It appears that the Biden Administration agrees that the investigation under the previous Administration has established China's bad behavior and has justified the Section 301 tariff action. In the President's Trade Policy Agenda, released March 1, 2021, the Office of the U.S. Trade Representative stated: "The Biden Administration is committed to using all available tools to take on the range of China’s unfair trade practices that continue to harm U.S. workers and businesses." Following her February 25, 2021, Senate hearing confirmation hearing Biden nominee for United States Trade Representative, Katherine Tai, stated the Biden Administration's commitment to "work with Congress to ensure that those tariffs are appropriately responsive to China's practices and consider the impact on U.S. businesses, workers and consumers."[1] Clearly, these are not the words on an Administration that plans to repudiate the China tariffs. However, it also appears to leave open the question of possible re-opening of the exclusion process, which allows for businesses to request from the USTR a waiver or removal of certain articles of merchandise that have been identified and targeted by the USTR for higher tariffs.  This can be accomplished by application to the USTR with a persuasive line of reasoning why certain items should be excluded from the Section 301.   

 

 

So far, the Biden Administration sole action relating to the China tariff was a notice on March 5, 2021[2], of the U.S. Trade Representative's determination to extend certain product exclusions on medical-care and/or COVID response products through September 30, 2021. Even in this action the Biden Administration was continuing the policy of the Trump Administration which on December 23, 2020[3], extended through those exclusions, set to expire December 31, 2020, through March 31, 2021.

 

 

Can I get the products I import off the list for tariffs?

 

At this time, there is no mechanism for removing classes of articles from the tariff action or excluding specific articles. The USTR received a total of 52,746 exclusion requests, of these, 6,804 (13%) were granted and 45,942 (87%) were denied.[4] The exclusion process was criticized by many for lack of transparency. Senator John Cornyn (Rep., Texas) asked USTR nominee Katherine Tai whether she would "consider reinstating the process for product exclusions and those that had previously received such exclusions?" Her reply was--

 

China's track record of using unfair practices to acquire U.S. technology, to the detriment of U.S. innovators and workers, is well-established. In the last administration, USTR conducted an investigation against unfair trade practices in China under Section 301 of the Trade Act of 1974 and found that China engages in unfair trade acts policies and practices related to intellectual property, innovation and technology transfer. To address those findings, the United States imposed tariffs on products from China. If confirmed, I will work with Congress to ensure that those tariffs are appropriately responsive to China’s practices and consider the impact on U.S. businesses, workers and consumers.

 

 


Is there any other way I can get out from under this financial burden?

 

There are some strategies for mitigating Section 301 China tariffs. Please note that in the examples given below all reference to specific companies and their plans are based solely on public information; no business confidential information has been used in compiling these examples.

 

 

 

1.         Verify that the merchandise you import is subject to the tariff.

 

The Section 301 tariffs are applied based on the eight-digit classification of the merchandise in the Harmonized Tariff Schedule of the United States ("HTSUS"). The first thing we do for a client facing a Section 301 tariff is to determine whether they have been using the correct classification. we have helped clients avoid the tariff by establishing the correct classification. In a case where they have already paid the tariff due to misclassification it is often possible to get refund from Customs.

 

2.         Move a critical part out of China.

 

Getting out of China completely may not be an option. Investments and partnerships have been made. Re-creating factories and the rest of the supply chain in other country can be expensive and may take months or years. The good news is that it may not be necessary to get completely out of China to get out from under the China tariffs.

 

Determining the country of origin of merchandise is complex. The U.S. customs regulations make an important distinction between merchandise made in a particular country and merchandise merely assembled in a particular country. When components from two or more countries are assembled in one country, the country of assembly is not necessarily the country of origin. Rather, Customs may look to all the components that make up the finished article and determine what is the single component that defines what the article is. The origin of that one component may be the origin of the finished article, even if the last assembly operation was in China and used Chinese components.

 

An Example

 

On September 24, 2020, U.S. Customs and Border Protection determined the country of origin of Yamaha Motor Corporation, USA motorized bicycles assembled in China from components made in China, Japan, and Taiwan. The frame was made in Taiwan. CBP has consistently found that the essence of a bicycle is its frame. Therefore, CBP ruled that the country of origin of the Yamaha motorized bicycles was Taiwan, not subject to the China Section 301 tariff of 25% on motorized bicycles of classification 8711.60.0090, even though the bicycles were assembled in China and had substantial Chinese-origin content.[5]

 

3.         Get out of China

 

Some manufacturing does not require a large investment in plant and equipment and can be more easily relocated. For example, to produce hats and other head coverings of textile materials all you need is some sewing machines to assemble hats from cut fabric and machines to knit hats.

 

In 2018, prior to the Section 301 tariffs, China dominated U.S. imports of hats, accounting for 75% of all U.S. imports of hats. There were just six other nations that had at least one percent of the share, and the rest of the world, collectively, accounted for just two percent.

 

With the 25% Section 301 tariff in place in 2019, China dropped to 67%, Vietnam and Bangladesh each had significant growth, there were nine nations, in addition to China, that each had at least one percent of the trade, and the rest of the world grew to a collective three percent.

The year 2020 brought the pandemic and overall reduced demand for hats. The biggest loser was China, with dropped to 59% of all shipments. Trade further diversified, with 11 individual nations each accounting for at least one percent of trade, and the rest of the world, collectively, accounting for four percent.

 

Not only did the tariff on China diversify the import supply chain, but it also resulted in some hat production returning the U.S.

 

4.         File for an exclusion

 

As noted above, there is no exclusion process now. The former process, which is closed, was criticized for lack of transparency. It also resulted in an 87% denial rate. We filed requests relating to nine articles, three of which (33%) were approved. Should an opportunity for filing exclusions open, we shall be happy to discuss your potential petition.

 

5.         Establish a Foreign-Trade Zone ("FTZ")

 

An FTZ is a federally-designated physical location within the United States (including U.S. territories) which for Customs purposes, and Customs purposes only, is considered to be outside the Customs Territory of the U.S. When merchandise enters an FTZ no import duty is collection. Duty because due when the merchandise leaves the FTZ to enter the commerce of the U.S. That means that merchandise entered into an FTZ and subsequently re-exported (whether or not advanced in condition, never enters the Customs Territory of the U.S. and, therefore, is never subject to U.S. import duty[6].

 

An Example

 

On October 24, 2018, Panasonic Eco Solutions Solar New York America (PESSNY) submitted an application to the FTZ Board in Washington, D.C. for its facility in Buffalo, New York, where they manufacture crystalline silicon photovoltaic cells, using imported silicon wafers and silver paste. These two materials to be used in the production of the solar cells are classifiable under 8-digit HTSUS subheadings included in the Federal Register Notice of September 21, 2018 published by the U.S. Trade Representative, which set a 25% tariff, in addition to regular tariffs, on these articles from China.

 

On April 2, 2019, PESSNY received approval from the FTZ Board. Now they can enter silicon wafers and silver paste into the FTZ and pay no import duty. When they subsequently export, they never pay the duty.

 

Financial details of PESSNY's savings are confidential, but the 2019 Annual Report of the Foreign-Trade Zones Board to the Congress of the United States provides a range.

 

In 2019 PESSNY received into the FTZ $25 to $50 million of merchandise, of which $10 to $25 million was subsequently exported, and not subject to the 25% tariff on Chinese goods. Recall that they got FTZ approval after the first quarter of 2019; full-year savings may be even higher.

 

PESSNY also avoids duty on foreign-status components which become scrap/waste in the FTZ.

 

An initial analysis of your businesses’ import patterns is offered free of charge.  This preliminary assessment will allow us to determine the best strategy to utilize if it’s established your business can benefit from any of the above mentioned opportunities. Contact Glenn at glenn@foreigntradezonesolutions.com or David david@agathonassociates.com or by calling David at 617-285-6004 or Glenn at 603-957-8247.



[2] See 86 FR 13785, March 10, 2021.

[3] See 85 FR 85831, December 29, 2020.

[5] See in Binding Ruling Letter HQ H312767

[6] Note, there are restrictions regarding merchandise that has been advanced in condition and subsequently re-exported to Canada or Mexico.