Friday, April 29, 2022

Poly/Wool Fabric Sole-Source Acquisition Announced

Burlington Apparel Fabrics, Greensboro, North Carolina, has been awarded a maximum $10,742,000 firm-fixed-price, indefinite-delivery/indefinite-quantity letter contract for poly/wool cloth. This was a sole-source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a one-year contract with no option periods. Location of performance is North Carolina, with an April 28, 2023, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency, Philadelphia, Pennsylvania (SPE1C1-22-D-1545).

Cold Weather Undergarments Contact Awarded

Peckham Vocational Industries Inc.,** Lansing, Michigan, has been awarded a maximum $11,375,000 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for military uniform cold weather undergarments. This is a one-year base contract with four one-year option periods. Location of performance is Michigan, with an April 28, 2023, ordering period end date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-22-D-N162).

**Mandatory source

Thursday, April 28, 2022

CSMS #51741965 - UPDATE on Section 301 China Reinstatement HTSUS and two additional HTS numbers identified.

Due to an error in programming, as of April 12, 2022, ACE inadvertently would not permit the transmittal of the required chapter 99 numbers for China Section 301 duty and/or exclusion for several Harmonized Tariff Schedule of the United States (HTSUS) classifications.  

The ACE programming for the HTSUS numbers identified in CSMS message #51675127 issued on April 21, 2022, has been updated effective April 26, 2022, and importers are now able to file entries and PSCs with the appropriate chapter 99 number to either pay the China Section 301 duty or claim the exclusion to obtain refunds of duties paid. 

CBP also identified two additional HTSUS where ACE is not allowing t the transmittal of the required chapter 99 numbers for China Section 301 duty and/or exclusion on or after April 12, 2022: 

  • 8524.11.9000
  • 0304.83.5090

For these two additional HTSUS, the functionality for the acceptance of the associated China Section 301 Chapter 99 duty or exclusion number is available in the Automated Commercial Environment (ACE) effective April 28, 2022.

For more information on the reinstatement of certain Section 301 exclusions, see 87 FR 7380.

Corrective actions to be taken:

Importers who entered goods subject to China Section 301 under the HTSUS listed above on or after April 12, 2022, without the associated Chapter 99 number should file a Post Summary Correction (PSC) on or after the dates listed above correcting the entry summary line(s) by adding the appropriate Chapter 99 number to properly pay Section 301 duties or claim the exclusion to obtain refunds of duties paid.

Reminder: importers, brokers, and/or filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTSUS when 98 or 99 HTSUS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise.

Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative.  For questions related to Section 301 entry-filing requirements, please refer to CSMS message 40969690 Information on Trade Remedy Questions and Resources.

Notice of proposed modification of 15 ruling letters and the revocation of treatment relating to the applicability of subheading 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS) to certain men’s and women’s footwear

CBP is proposing to modify 15 ruling letters from 2010 and revoke the treatment of the applicability of subheading 9817.00.96, HTSUS to certain men’s and women’s footwear. Subheading 9817.00.96, HTSUS, covers: “Articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons and is duty-free. It is now CBP's postion that the articles are dutiable as ordinary footwear of Chapter 64.

Comments must be received on or before May 27, 2022.

Read more in Customs Bulletin VOL. 56, NO. 166, APRIL 27, 2022, beginning on Page 65.

Duy-free Festival Article Ruling Reversed, Now Determined to be Wearing Apparel with Duty of 14.%

In New York Ruling Letter (“NY”) N025677, dated May 2, 2008, CBP classified two belts in heading 9505, HTSUS, specifically in subheading 9505.90.60, HTSUS, which provides for “Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Other: Other.” Rate of duty ZERO. CBP has reviewed NY N025677 and has determined the ruling letter to be in error.

It is now CBP’s position that the two belts are properly classified, in heading 6117, HTSUS, or heading 6217, HTSUS, depending on whether the backing fabric is knit or not knit. If the backing fabric is knit, then the subject belts are classified in subheading 6117.80.95, HTSUS, which provides for “Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories: Other accessories: Other: Other.” Rate of Duty 14.6%. If the backing fabric is not knit, then the subject belts are classified in subheading 6217.10.95, HTSUS, which provides for “Other made up clothing accessories; parts of garments or of clothing accessories, other than those of heading 6212: Accessories: Other: Other.” Rate of Duty 14.6%.

Read more in Customs Bulletin VOL. 56, NO. 16, APRIL 27, 2022, beginning on Page 50.

Wednesday, April 27, 2022

Poly/Wool Fabric Contract Awarded

Burlington Apparel Fabrics, Greensboro, North Carolina, has been awarded a maximum $12,288,502 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for poly/wool cloth. This was a competitive acquisition with two responses received. This is a one-year contract with no option periods. Locations of performance are North Carolina and Mexico, with an April 26, 2023, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Philadelphia, Pennsylvania (SPE1C1-22-D-1549).

Sources Sought / RFI – Men’s & Women’s Combination Hats

The U.S. Coast Guard is seeking information on industrial capacity to produce Men’s & Women’s Combination Hats

See the Request for Information HERE.

Friday, April 22, 2022

MWA Recalls LUXE+WILLOW Heated Blankets Due to Burn and Fire Hazards

Description: This recall involves LUXE+WILLOW Heated Blankets brand name L & W BIO. LUXE+WILLOW and L&W BIO are printed on a label on the blanket. The polyester blanket measures 50 inches by 50 inches and is white with a Sherpa lining.

Remedy: Consumers should immediately stop using the recalled electric blanket and contact MWA for a full refund or $50 voucher towards the purchase of another LUXE+WILLOW product. Consumers should unplug the electric blanket, cut the electrical cord and submit a photo of the blanket’s cut cord and labeling on the blanket to the firm at support@luxewillow.com as proof of destruction and to receive the refund or $50 voucher. After submitting proof of destruction to the firm, consumers should dispose of the recalled blanket. The firm is contacting all known purchasers directly.

Incidents/Injuries: The firm has received three reports of the blankets overheating, including one report of a burn to a consumer’s wrist. One consumer reported seeing flames.

Sold At: T.J. Maxx, Urban Outfitters and other stores nationwide from January 2022 through March 2022 for about $40.

Importer(s): MWA LLC, of New York

Manufactured In: China

Recall number: 22-123

More information and photos HERE.

The Red League Recalls Children’s Pajamas Due to Burn Hazard

Description: This recall involves three styles of children’s sleepwear garments; one-piece, long-sleeve top and footed pajamas, two-piece, long-sleeve top and pant traditional pajama sets, and two-piece, long-sleeve top and pant pajama sets.

The one-piece, long-sleeve top and footed pajamas are red, have wooden buttons located at the back of the neck and were sold with a matching red beanie hat. The pajamas were sold in sizes 6-12 months and 12-18 months and are made of 80% cotton and 20% polyester.

The two-piece, long-sleeve top and pant traditional pajama sets are red with white piping trim, two front pockets and wooden buttons on the center front. The pajama sets were sold in children’s sizes 2, 3, 4, 5, 6, 8, 10, 12 and 14 and are made of 80% cotton and 20% polyester.

The two-piece, long-sleeve top and pant pajama sets are yellow and have a bear embroidered onto the tops’ chest. The pajama sets were sold in children’s sizes 2, 3, 4, 5, 6, 8, 10, 12 and 14 and are made of 95% cotton and 5% spandex.

“The Red League” and the size are printed on a sewn-in fabric label at the neck of the recalled garments. “Made in China,” size, fiber content and washing instructions are printed on a sewn-in, side-seam label.

Remedy: Consumers should immediately take the recalled pajamas away from children and contact The Red League to receive a pre-paid mailer and instructions on how to return the garment(s) for a full refund. The firm is also contacting consumers who purchased the pajamas directly from The Red League to provide them a prepaid mailer to return the garment for a full refund.

Incidents/Injuries: None reported

Sold At: Online at https://theredleague.com/ and at Elle Ella Boutique stores in California and JellyBeans stores in New York from November 2020 through February 2022 for between $38 and $40, depending on the style.

Distributor(s): The Red League, of Brooklyn, New York

Manufactured In: China

Recall number: 22-124

More information and photos HERE.

Thursday, April 21, 2022

Homeland Procurement Reform (HOPR) Act

On February 4, 2022, the House passed H.R. 4521, the American COMPETES Act. It was an almost strictly party-line vote, with just one Democrat, Stephanie N. Murphy (Florida, 7th) voting Nay and one Republican, Adam Kinzinger (Illinois, 16th) voting Yea.

Sec. 50101 of the House-passed bill is the Homeland Procurement Reform (HOPR) Act, which expands on the current domestic sourcing preference for DHS (the "Kissel Amendment")

On March 28, 2022, the Senate passed its version of COMPETES.

All Democrats voted Yea. Most Republicans opposed, but 19 crossed over to vote Yea: Capito (R-WV), Cassidy (R-LA), Collins (R-ME), Cornyn (R-TX), Crapo (R-ID), Daines (R-MT), Grassley (R-IA), McConnell (R-KY), Moran (R-KS), Murkowski (R-AK), Portman (R-OH), Risch (R-ID), Romney (R-UT), Rounds (R-SD), Sasse (R-NE), Sullivan (R-AK), Tillis (R-NC), Wicker (R-MS), Young (R-IN).

The Senate did not include HOPR. The bill(s) are now in a House-Senate conferrence to resolve differences, including the inclusion, or not, of HOPR.

There are several covered articles of interest to the U.S. textile, apparel, and footwear industries, including much of the footwear, uniforms, and several kinds of protective-wear. In addition to the enumerated list, the Secretary of Homeland Security may add other items of clothing or protective equipment. HOPR covers footwear, which is not covered by Kissel.

HOPR covers nine agencies within DHS, while Kissel applies to TSA and Coast Guard, not the other seven -- CBP, ICE, Secret Service, Federal Protective Service, FEMA, Federal Law Enforcement Training Centers, and the Cybersecurity and Infrastructure Security Agency.

HOPR requires that, to the maximum extent possible, at least one-third of the funds for the procurement of uniforms and protective equipment covered by the HOPR Act be used to purchase goods manufactured by entities that qualify as a U.S. small business. Note, that American small businesses employ nearly fifty percent of the private sector workforce, but they received less than twenty-six percent of Federal government contracts in fiscal year 2019.

However, HOPR does not mandate domestic sourcing. It reforms the way DHS procures uniform and protective equipment to support the needs of mission-critical agencies in the Department.

HOPR incentivizes the procurement of higher-quality uniforms and equipment issued to the men and women charged with protecting the homeland.

HOPR requires vendors be registered in SAM.gov and in compliance with ISO 9001:2015, which specifies requirements for a quality management system when an organization:

a) needs to demonstrate its ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements, and

b) aims to enhance customer satisfaction through the effective application of the system, including processes for improvement of the system and the assurance of conformity to customer and applicable statutory and regulatory requirements.

HOPR Strengthen supply chain security by mandating locked storage, reports of stolen goods, and the destruction of defective or unusable items for any item bearing official DHS insignia not manufactured in the U.S.

HOPR provides for a waiver in the case of national emergency.

HOPR ensures uniforms and protective equipment are purchased at fair and reasonable prices, consistent with existing regulations.

HOPR directs the Secretary to provide an annual briefing on instances in which vendors have failed to meet deadlines for delivery of covered items and corrective actions taken.

HOPR directs the Secretary of Homeland Security to conduct a study of the adequacy of uniform allowances provided to Department frontline personnel to determine what improvements can be made to current uniform allowances, including increasing allowances.

HOPR requires the Secretary to report recommendations for establishing a stable demand for protective equipment to support investments made in reshoring domestic manufacturing for critical supplies.

AAFA Urges Inclusion of Homeland Security Provision in America Competes Bill

The American Apparel and Footwear Association joined a multi organization letter to congress urging the inclusion of the Homeland Procurement Reform Act – a measure to strengthen supply chain and procurement protocols for critical national security uniforms – in a the final version of a comprehensive trade and competitiveness bill.

Division F, Section 50101 in the House-passed America COMPETES Act, ensures that key components of the Department of Homeland Security can procure critical uniforms and protective equipment developed and manufactured in the United States to execute their security, enforcement, and investigative missions. This bipartisan, bicameral initiative was originally introduced by Senators Shaheen, Moran, Hassan, and Rounds as S.1009, the Homeland Procurement Reform (HOPR) Act. Companion legislation was also introduced as H.R.2915 by House Representatives Correa, Mast, McGovern, Pappas, and Thompson.

Read the letter HERE.

Army Poly/Wool Uniform Dress Coat Contract Awarded

Fechheimer Brothers Co., Cincinnati, Ohio, has been awarded a maximum $15,721,200 modification (P00005) exercising the first one-year option period of a one-year base contract (SPE1C1-21-D-1466) with four one-year option periods for men’s uniform dress coats. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Locations of performance are Ohio and Illinois, with an April 26, 2023, ordering period end date. Using military service is Army. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Wednesday, April 20, 2022

CPSC Safety Requirements for Children’s Apparel, Sleepwear, and other Textile Products Training Webinar

On April 26, 2022, at 4:30pm EDT, Will Cusey, the CPSC Small Business Ombudsman, in conjunction with the Small Business Majority, will host a webinar on CPSC safety requirements for children’s apparel, sleepwear, and other textile products. The webinar will provide an overview of the CPSC’s testing, labeling, and certification requirements in place for these product categories for interested small business stakeholders. The registration link for the webinar is available here

Friday, April 15, 2022

Army and Air Force Trouser Contract Awarded

M&M Manufacturing LLC, Lajas, Puerto Rico, has been awarded a maximum $8,388,900 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for Lot 01 Layer 6 trousers. This was a competitive acquisition with nine responses received. Additional contracts are expected to be awarded under this solicitation (SPE1C1-20-R-0157). This is a one-year base contract with three one-year option periods. Location of performance is Puerto Rico, with an April 14, 2023, ordering period end date. Using military services are Army and Air Force. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-22-D-1519).

Thursday, April 14, 2022

China 301 Exclusion Reinstatement Functionality in CBP's ACE Scheduled to Become Operative April 17

The functionality for the acceptance of Harmonized Tariff Schedule of the United States (HTSUS) 8536.50.9065 for the Section 301 China reinstatement of certain product exclusions under HTS classification 9903.88.67 will be available in the Automated Commercial Environment (ACE) on April 17, 2022.

Wednesday, April 13, 2022

Monday, April 18, 2022, is Patriots' Day in Massachusetts

Monday, April 18, 2022, is Patriots' (plural possessive) Day in Massachusetts and Patriot's (singular possessive) Day in Maine. It is the day we remember that first "shot heard round the world." For the past two months we have witnessed the bravery of the Ukrainian patriots defending their land from Russian invasion. Just as in 1775, we see are witnessing a battle pitting the local population against a larger and better-equipped foreign power. Persons who know military and geo-political affairs better than I, can speculate on what course this war will take. If our own history is a guide, the Ukrainians are in for a long fight.

"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 -- 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.

God bless America, and Buona Pasqua!

Proposed Revocation Of One Ruling Letter Relating Tariff Classification of Men’s Vest/Sleeveless Jacket

In HQ 964512 and NY G80065, CBP classified men’s vests/sleeveless jackets in heading 6211, HTSUS, specifically in subheading 6211.33.00, HTSUS, which provides for, “Track suits, ski-suits and swimwear; other garments: Other garments, men’s or boys’: of man-made fibers: Vests: Other.” CBP has reviewed HQ 964512 and NY G80065 and has determined the ruling letters to be in error. It is now CBP’s position that men’s vest/sleeveless jacket is properly classified, in heading 6201, HTSUS, specifically in subheading 6201.93.60, HTSUS, which provides for “Men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of manmade fibers: Other: Other: Other: Other, Water resistant.”

Read the proposal in Customs Bulletin Vol. 56, No. 14. beginning on Page 54.

Comments are due by May 13, 2022.

Customs Rules of Eligibility of Certain Bed Linens for U.S.-Israel Free Trade Agreement

In New York Ruling Letter (“NY”) N313390, dated August 21, 2020, CBP classified a bed linen set containing a pillow sham, duvet cover, flat sheet, fitted sheet, and pillowcases in heading 6302, HTSUS, specifically in subheading 6302.21.90, HTSUS, which provides for “Bed linen, table linen, toilet linen and kitchen linen: Other bed linen, printed: Of cotton: Other: Not napped” and in subheading 6302.31.90, HTSUS, which provides for “Bed linen, table linen, toilet linen and kitchen linen: Other bed linen: Of cotton: Other: Not napped.” CBP has reviewed NY N313390 and has determined that it classified the wrong bed linen set composition and failed to address the eligibility of the bed linen products for preferential tariff treatment under the U.S.-Israel FTA. It is now CBP’s position that the bed linen set containing a flat sheet, fitted sheet, and pillowcase does not qualify as a set under the HTSUS and must be entered individually. Additionally, the bed linen set containing a flat sheet, fitted sheet, and pillow sham does qualify as a set under the HTSUS and may be entered under one subheading. Classification remains in 6302.21.90, HTSUS, or 6302.31.90, HTSUS. Furthermore, it is now CBP’s position that the flat sheet, fitted sheet, duvet cover, and the set containing sheets and pillow shams are not eligible for preferential tariff treatment under the U.S.-Israel FTA. The pillowcase and pillow sham, when entered individually, are eligible for preferential tariff treatment under the U.S.-Israel FTA.

Read more in Customs Bulletin Vol. 56, No. 14. beginning on Page 2.

Proposed Modification of Ruling Letter Would Triple the Duty on Men’s Full Zip Hoodie (Jacket)

In NY N316817, CBP classified men’s full zip hoodie (jacket) in heading 6110, HTSUS, specifically in subheading 6110.20.20 (rate of duty 5%), HTSUS, which provides for “Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: Of cotton: Other: Other: Other: Men’s or boys’: Other.” CBP has reviewed NY N316817 and has determined the ruling letter to be in error. It is now CBP’s position that men’s full zip hoodie (jacket) is properly classified, in heading 6101, HTSUS, specifically in subheading 6101.20.20 (rate of duty 15.9%), HTSUS, which provides for “Men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles, knitted or crocheted, other than those of heading 6103: Of cotton: Men’s.”

Read the proposal in Customs Bulletin Vol. 56, No. 14. beginning on Page 14.

Comments are due by May 13, 2022.

FTC charges battery maker in first case under Made in USA Labeling Rule

According to the FTC, Lithionics and General Manager Steven Tartaglia used phrases and American flag images to convey a Made in USA marketing message for their battery, battery module, and battery management system products. But don’t wave Old Glory just yet. As the FTC’s first action under the new Made in USA Labeling Rule alleges, the lithium ion cells Lithionics used were actually made in China. The proposed settlement includes a civil penalty of $105,319.56 and requires changes in how the company makes Made in USA claims.

Read more HERE.

Tuesday, April 12, 2022

Navy Dress Trouser Contract Awarded

Bernard Cap LLC,* Hialeah, Florida, has been awarded a maximum $8,070,516 fixed-price, indefinite-delivery/indefinite-quantity contract for men’s dress trousers. This was a competitive acquisition with six responses received. This is a one-year base contract with four one-year option periods. Location of performance is Florida, with an April 11, 2023, ordering period end date. Using military service is Navy. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-22-D-1544).

*Small business

Air Force Dress Shirt Contract Awarded

Ashland Sales and Services Co., Inc., Olive Hill, Kentucky, has been awarded a maximum $16,488,900 modification (P00002) exercising the first one-year option period of a one-year base contract (SPE1C1-21-D-1465) with four one-year option periods for men’s long sleeve dress shirts. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Locations of performance are Kentucky and Georgia, with an April 15, 2023, performance completion date. Using military service is Air Force. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

Authorization of FTZ Production Activity; CGT U.S., Ltd. (Polyvinyl Chloride (PVC) Coated Upholstery Fabric Cover Stock)

On April 12, 2022, the Foreign Trade-Zone Board published in the Federal Register (87 FR 21611 ) [B-84-2021] Foreign-Trade Zone (FTZ) 80--San Antonio, Texas, Authorization of Production Activity; CGT U.S., Ltd. (Polyvinyl Chloride (PVC) Coated Upholstery Fabric Cover Stock), New Braunfels, Texas.

The FTZ Board authorized the production activity described in the notification, subject to the FTZ Act and the Board’s regulations, including Section 400.14. The foreign-status material (100% polyester woven weft pile fabric—dyed) may only be admitted in privileged foreign status (19 CFR 146.41).

There will be no inverted tariff relief for the fabric admitted in priviledged foreign status.

Notice of Continuation and Request for Nominations for the Industry Trade Advisory Committees

On April 12, 2022, the Office of the U.S. Trade Representative published in the Federal Register (85 FR 21690) Notice of Continuation and Request for Nominations for the Industry Trade Advisory Committees.

The U.S. Trade Representative and the Secretary of Commerce (Secretary) have established a new four-year charter term ending in February 2026 for the Industry Trade Advisory Committees (ITACs) and are accepting applications from qualified individuals interested in serving as members. The ITACs provide detailed policy and technical advice, information, and recommendations to the Secretary and the U.S. Trade Representative regarding trade barriers, negotiation of trade agreements, and implementation of existing trade agreements affecting industry sectors, and perform other advisory functions relevant to U.S. trade policy matters. There currently are opportunities for membership on each ITAC and we will accept nominations throughout the charter term.

Renewal of the United States Manufacturing Council

On April 12, 2022, the Department of Commerce published in the Federal Register (85 FR 21639) Renewal of the United States Manufacturing Council.

SUMMARY: On March 23, 2022, the charter of the United States Manufacturing Council (Council) was renewed for a two-year period, ending March 23, 2024. The Council is a federal advisory committee under the Federal Advisory Committee Act. For further information on the Council charter renewal, please visit: https://www.facadatabase.gov/FACA/apex/FACAPublicCommittee?id=a10t0000001gzmbAAA.

DATES: All applications for immediate consideration of appointment must be received by 5:00 p.m. Eastern Daylight Time (EDT) on May 27, 2022. After this deadline, applications will be accepted under this notice on a rolling basis for the remainder of the charter term to fill any vacancies that may arise.

Monday, April 11, 2022

Maritime Armor Systems Contract Awarded

Slate Solutions LLC,* Davie, Florida, is awarded a $10,017,191 firm-fixed-priced modification to previously awarded contract (N61331-20-D-0009) for maritime armor systems, to support the Antiterrorism Afloat Equipage Program. Work will be performed in Pompano Beach, Florida, and is expected to be completed by May 2023. If all options are exercised, performance will be completed May 2025 and not exceed $17,348,059. No funding will be obligated at time of award. The Naval Surface Warfare Center Panama City Division, Panama City, Florida, is the contracting activity.

*Small business

Friday, April 8, 2022

The EU Strategy for Sustainable and Circular Textiles was published on March 30, 2022.

The European Union (EU) will be putting forward several pieces of legislation in 2022 to achieve its circular economy transition. One initiative, the Sustainable Products Initiative (SPI) will focus on “key product value chains” (including textiles) that the Commission sees as requiring “urgent, comprehensive and coordinated action” to jumpstart the transition to circularity. The EU Strategy for Sustainable and Circular Textiles was published on March 30, 2022. For more information, see the EU Strategy for Sustainable Textiles webpage

Read more on the OTEXA website.

Counterfeit Scarves Worth Over $285K Seized

U.S. Customs and Border Protection (CBP) officers at the Alexandria Bay Port of Entry seized designer scarves worth more than $285,000, due to trademark violations.

Earlier this month, a shipment that was manifested as "clothing" was seized after a thorough examination determined the contents to be counterfeit scarves. A total of 588 scarves were seized by CBP, as they violated Intellectual Property Rights (IPR) of the Louis Vuitton trademark. This week, CBP officers determined that the scarves had a total Manufacturers Suggested Retail Price (MSRP) value of approximately $285K dollars.

Read more HERE.

Navy Apparel Contract Awarded

Kandor Manufacturing,** Arecibo, Puerto Rico, has been awarded a maximum $9,814,703 modification (P00026) exercising the third one-year option period of an 18-month base contract (SPE1C1-19-D-1163) with three one-year option periods for Navy working uniform blouses and trousers, maternity blouses and Army combat uniform trousers. This is a firm-fixed-price, indefinite-delivery/indefinite-quantity contract. Location of performance is Puerto Rico, with an April 6, 2023, ordering period end date. Using military services are Navy and Army. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.

**Small-disadvantaged business in historically underutilized business zones

Safety Boot Contract Awarded

Belleville Shoe Manufacturing Co.,* Belleville, Illinois, has been awarded a maximum $11,188,445 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for safety boots. This was a competitive acquisition with three responses received. This is a one-year base contract with two one-year option periods. Locations of performance are Illinois and Arkansas, with an April 7, 2023, ordering period end date. Using military services are Army, Navy, Air Force and Marine Corps. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-22-D-1541).

*Small business

$5.5 million total FTC settlements with Kohl’s and Walmart challenge “bamboo” and eco claims, shed light on Penalty Offense enforcement

For consumers shopping for textiles for the home, products promoted as made from bamboo are a popular draw. But the FTC says some items advertised by global retailers Kohl’s and Walmart as “bamboo” were actually made of rayon. According to separate FTC settlements, the companies’ misleading representations violated the FTC Act and the Textile Act. In addition, the FTC says Kohl’s and Walmart engaged in greenwashing by making deceptive eco-friendly claims for those products. And even businesses that don’t have anything to do with textiles should take note of these settlements. Why? Because they use the FTC’s revived Penalty Offense Authority to support a $2.5 million civil penalty from Kohl’s and a $3 million civil penalty from Walmart for violating the Textile Act when they were on notice that improper labeling and advertising of textile products could subject them to civil penalties.

The complaint against Kohl’s charges that the company falsely represented that sheets, pillows, bath rugs, and towels advertised as made wholly or in part from bamboo were, in fact, made of rayon. What’s more, the company described them with terms like “sustainable,” “highly renewable,” and “environmentally friendly.” Kohl’s also advertised some of the products online with a “Cleaner Solutions” seal that linked people to a “Sustainability at Kohl’s” webpage describing initiatives suggesting that the company “care[s] about the planet.”

According to the complaint against Walmart, the company also made false bamboo claims in promoting sheets, towels, blankets, and nursing bras. In addition, Walmart marketed the items with phrases like “eco-friendly & sustainable” and “renewable and environmentally sustainable”

So what’s the real story about bamboo? And how does the FTC know that Kohl’s and Walmart were aware of the truth about bamboo before the companies made those deceptive claims to market the products? That’s where the story gets interesting.

As the complaints explain, under the Textile Act and Rules, rayon is the generic name for a type of fiber made from cellulose through a manufacturing process that uses chemicals like sodium hydroxide that are hazardous to the environment. Although the cellulose could come from bamboo fiber, “hazardous air pollutants (HAP) emitted from cellulose products manufacturing operations” include – according to the Code of Federal Regulations – carbon disulfide, carbonyl sulfide, ethylene oxide, methanol, methyl chloride, propylene oxide, and toluene.

If you think back to high school chemistry, sodium hydroxide is also known by some more evocative names, including “lye” and “caustic soda” – facts that belie the “green” impression conveyed by the word “bamboo.”

Under the Textile Act and Rules, ads for products that reference or imply fiber content must disclose the generic fiber names recognized or established by the FTC and can’t misrepresent fiber content. Therefore, marketing materials for manufactured textile products composed, in whole or in part, of regenerated cellulose fiber must use the generic fiber name – in this case, “rayon” or “viscose.”

How can the FTC be so sure that Kohl’s and Walmart knew that? Because the FTC told them in January 2010 Warning Letters sent directly to those companies and others. FTC staff explained in detail why selling rayon products as “bamboo” was against the law. In addition, the letters enclosed a “synopsis” we now call them Notices of Penalty Offenses – expressly stating that the FTC was putting the company on notice that “the failure to correct improper labeling or advertising of textile products could subject the company to civil penalties.”

The complaints against Kohl’s and Walmart charge them with making false or unsubstantiated claims, in violation of Section 5 of the FTC Act. According to the FTC, they misrepresented that the products were made of bamboo and that they provided environmental benefits when, in fact, the rayon manufacturing process uses toxic chemicals and emits hazardous pollutants. The complaints also allege violations of the Textile Act and Rules.

Companies that follow what’s up at the FTC have been wondering how the agency would use its recently revived penalty offense authority. Count III in the Kohl’s and Walmart complaints may help to answer that question. Citing Section 5(m)(1)(B), the FTC alleges the companies had actual knowledge that falsely or deceptively advertising textile products would subject them to civil penalties.

Read more HERE.

Statement by Ambassador Katherine Tai Following Congressional Vote on Russia and Belarus’ Permanent Normal Trade Relations Status

On April 8, 2022, U.S. Trade Representative Katherine Tai issued the following statement.

"Over the last several weeks, President Biden has united our allies and partners to impose severe economic costs on Russia for its premeditated and unprovoked attack on Ukraine. The Biden Administration has initiated crippling sanctions on Russia’s financial, energy and military sectors and curtailed its access to certain technologies. As a result, the Russian economy has cratered and hundreds of companies have announced plans to leave the country.

'Yesterday, the U.S. Senate voted unanimously to cut off permanent normal trade relations with Russia and Belarus. Combined with a similar, overwhelming vote in the House of Representatives, this swift action shows our determination to isolate Russia from the global economy and multilateral institutions. Additionally, Congress voted overwhelmingly to ban energy imports from Russia, which will complement the Executive Order President Biden signed last month and further restrict Russia’s economy.

"I want to thank Senate Finance Committee Chairman Wyden and Ranking Member Crapo – as well as Ways & Means Chairman Richard Neal and Ranking Member Kevin Brady in the House of Representatives – for coming together to reach this agreement.

"USTR will continue work with Congress and our trading partners as we build a broad coalition in opposition to Russia’s unjust actions."

This action will move merchandise from Belarus and Russia from relatively low "Column 1" tariffs to much higher "Column 2" tariffs.

See also this Agathon Associates report of the significance of this action as regards Russia.

Wednesday, April 6, 2022

Update on China Section 301 Tariff Lawsuits

In September 2020, HMTX Industries LLC, a U.S.- based importer, brought the first of these lawsuits to the CIT. The company, as well as several of its affiliates, challenged the List 3 tariffs, and later amended its complaint to challenge List 4A. Subsequently, approximately 6,000 importers of various goods from China filed similar challenges to the Lists 3 and 4A tariffs as well as List 4B, seeking a refund of duties paid. Collectively, these lawsuits represent the first domestic court challenges to Section 301 tariffs. Not only is this legal challenge unprecedented, but the number of cases is as well. The CIT generally receives a few hundred cases per year; the Section 301 cases, in conjunction with other 2020 filings, increased its caseload by 1,546% from 2019 to 2020.

The CIT has taken several procedural steps reflecting the scope and potentially significant legal implications of these challenges. First, the court assigned all cases to a three-judge panel and created a single “master case” titled In re Section 301 Cases, under which the parties must file all relevant documents. Second, the court decided to manage the disputes by selecting a representative sample of claims, which would be used to assess the legal challenges’ viability and potentially suggest how the court should address the remaining cases. While the test case is considered, all other cases are stayed.

The HMTX case, whose claims served as a model for many subsequent claims, was selected by the CIT to serve as the test case. In their amended complaint, the HMTX plaintiffs contend that (1) the USTR violated procedural requirements for imposing Section 301 tariffs; and (2) the Agency exceeded its statutory authority when imposing the tariffs.

On April 1, 2022, the CIT issued an opinion on the merits. The court first ruled that USTR acted within the authority provided by Section 307 when it imposed additional tariffs under Lists 3 and 4A. Specifically, the court found a “clear connection” between China’s retaliatory actions (i.e., imposition of tariffs on U.S. goods) and USTR’s determination that these retaliatory actions increased the burden on U.S. commerce resulting from China’s unfair acts, policies, and practices such that USTR could rely on Section 307(a)(1)(B) to modify the action.

Although the CIT found that USTR acted within its statutory authority to modify the Section 301 action, it next ruled that USTR violated the Administrative Procedure Act (APA) (5 U.S.C. § 551 et seq.) by failing to respond adequately to public comments in its final action. In particular, the court faulted USTR for failing to explain how USTR arrived at its decision to raise tariffs on particular products despite the numerous public comments contesting the appropriateness of imposing new tariffs and the inclusion or exclusion of particular products. Based on these procedural violations, the court remanded Lists 3 and 4A to USTR for reconsideration or further explanation, but decided to allow the tariffs to remain in place given the “disruptive consequences” of removing them during remand, stating: “For now, the court declines to try to unscramble this egg.”

If USTR chooses to reconsider or provide further explanation, it must submit its decision to the CIT by June 30, 2022. Alternatively, USTR and the plaintiffs may seek to appeal the CIT’s ruling.

Agathon Associates raised questions about the legality of the List 3 tariffs in this September 18, 2018 blog.

USTR Releases 2022 National Trade Estimate Report on Foreign Trade Barriers

On March 31, 2022, United States Trade Representative Katherine Tai released the 2022 National Trade Estimate Report on Foreign Trade Barriers (NTE Report), providing a comprehensive review of significant foreign barriers to U.S. exports of goods and services, U.S. foreign direct investment, and U.S. electronic commerce in key export markets for the United States.

“The President’s Trade Agenda detailed a bold vision for supporting America’s working families and businesses by promoting fair competition and inclusive economic growth,” said Ambassador Tai.  “The 2022 NTE Report identifies a range of important challenges and priorities to guide the Biden Administration’s effort to craft trade policy that reflects our country’s values and builds a better America.”

Published annually since 1985, the NTE Report covers significant foreign trade barriers in over 64 markets which together account for 99 percent of U.S. goods trade and 85 percent of U.S. services trade.

The NTE Report covers significant trade barriers in areas, including:  (1) import policies; (2) technical barriers to trade; (3) sanitary and phytosanitary measures; (4) government procurement; (5) intellectual property protection; (6) services barriers; (7) barriers to digital trade and electronic commerce; (8) investment barriers; (9) subsidies, especially export subsidies; (10) competition; (11) state-owned enterprises; (12) labor; (13) environment; among others.

Examples of these significant obstacles include:

Agricultural Trade Barriers:  The 2022 NTE Report highlights a number of cross-cutting barriers affecting U.S. agricultural trade, including (1) opaque and burdensome facility registration requirements, such as China’s Decree 248 and 249, and Indonesia’s facility registration requirements for dairy, meat, and rendered products; (2) sanitary and phytosanitary (SPS) measures that are not based on science, are maintained without sufficient scientific evidence, or are applied beyond the extent necessary to address SPS issues, such as Turkey’s onerous procedures and requirements for agricultural biotechnology approvals, Mexico’s decisions on agricultural biotechnology applications and its decree providing for a phase-out of agricultural biotechnology corn, and the EU’s burdensome certification requirements for animal products and non-science-based policies affecting innovative crop technologies; and (3) import licensing requirements and non-transparent import licensing administration restricting the flow of U.S. agricultural exports to a number of countries, including Angola, Ecuador, Egypt, and Indonesia. USTR will continue to engage foreign governments on barriers that hamper the ability of U.S. farmers, ranchers and food processors to access markets worldwide. 

Digital Trade Barriers:  The 2022 NTE Report details restrictive data policies in China, the EU, India, Indonesia, Korea, Russia, Turkey, and Vietnam, among other countries.  For example, India’s proposed regulations on digital trade and electronic commerce include data localization requirements and restrictions on cross-border data flows that could serve as a barrier for a wide range of bilateral goods and services trade.  Separately, EU leaders have promoted “technological sovereignty” or “digital sovereignty” as a policy objective.   USTR will continue monitoring the execution of this policy to ensure that it does not pose a form of unfair competition.  USTR will continue to engage foreign governments on policies that significantly affect U.S. exporters of digital products and services and undermine U.S. manufacturers’ and service suppliers’ ability to move data across borders. 

Industrial PoliciesChina’s state-led, non-market approach to the economy and trade drives its pursuit of industrial policies that provide unfair competitive advantages to Chinese companies and actively seeks to displace foreign competitors and technologies in order to dominate domestic and global markets.  China deploys numerous types of interventionist and discriminatory measures and actions in pursuit of its industrial policies, which can heavily distort and disrupt markets and often lead to the creation of severe and persistent excess capacity, as evidenced by the ongoing situations in steel, aluminum, and solar, among others.  Newer targets for China’s industrial policies include numerous industries in advanced manufacturing, high-technology, and other key economic sectors where China is setting and pursuing production and market share objectives that can only be achieved through non-market means.  USTR is determined to pursue all available domestic trade tools to protect the competitiveness of U.S. workers and businesses and to work closely with like-minded trading partners on the shared challenges posed by China’s harmful practices.

Labor:  The U.S. Government has identified concerns related to labor rights in several countries, including with respect to:  employment discrimination and freedom of association in Bahrain; acceptable conditions of work and freedom of association in Bangladesh; forced labor and other human rights abuses in the Xinjiang Uyghur Autonomous Region of China; freedom of association and collective bargaining in Colombia; acceptable conditions of work, child labor, forced labor, freedom of association, and collective bargaining in the Dominican Republic; freedom of association, collective bargaining, and acceptable conditions of work in Guatemala; freedom of association, collective bargaining, child labor, and acceptable conditions of work in Honduras; freedom of association in Peru; and freedom of association and other worker rights concerns in Thailand.
 
Technical Barriers to Trade:  Technical regulations or conformity assessment procedures are a legitimate form of regulation, but in some cases can be used to unnecessarily restrict trade or curb the movement of innovative products risk lost opportunities to capitalize on America’s leadership in science and high-technology manufacturing, services, and agriculture.  For example:

  • Burdensome technical regulations or conformity assessment procedures hamper the ability of American producers to export high quality U.S. food and agricultural products to certain markets. Examples include Mexico’s draft conformity assessment procedures for cheese, and Panama’s technical regulations for onions and potatoes.
  • Egypt requires foreign entities that export finished consumer products to Egypt to register their trademark and their manufacturing facilities with Egypt’s General Organization for Exports and Imports. Registration can take several months, adding costs and uncertainty to the export process, which may discourage exports to Egypt over time.
  • The NTE highlights how several countries have implemented automotive safety standards that effectively exclude vehicles built to conform to the U.S. Federal Motor Vehicle Safety Standards (FMVSS), which provide a high level of protection that matches or exceeds that of other countries. Over the coming year, USTR will continue its engagement with foreign government and authorities, to ensure that U.S. exports of FMVSS-compliant vehicles are able to access their markets, including Colombia, Egypt, Mexico, Morocco, Philippines, and Taiwan.

The NTE also highlights progress on removing barriers by continuing to work with our trade partners.  For example:

  • Following Japan’s imposition in March 2021 of a safeguard on U.S. beef exports, under which U.S. beef exports temporarily did not benefit from preferential treatment under the United States–Japan Trade Agreement (USJTA), the United States and Japan reached an agreement in principle to increase the USJTA beef safeguard trigger level, and greatly reduce the probability of the safeguard increasing tariffs again.  The United States will focus work in 2022 to finalize the text of the agreement and complete domestic procedures. 
  • The United States and Vietnam signed an agreement that addresses U.S. concerns in the Section 301 investigation into Vietnam’s acts, policies, and practices relating to the import and use of illegal timber.  The agreement secures commitments that will help keep illegally harvested or traded timber out of the supply chain and protect the environment and natural resources.  USTR will monitor Vietnam’s implementation of its commitments.

You can view the report here.

The release of the 2022 NTE Report follows the March 1, 2022 release of the 2022 President’s Trade Agenda and 2021 Annual Report.  USTR plans to release its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights by April 30, 2022.
 

UPDATE: Section 301 China Reinstatement of Certain Exclusions

p>CSMS #51515097 - UPDATE: Section 301 China Reinstatement of Certain Exclusions

This is an update to CSMS #51469298, issued March 31, 2022. The functionality for the acceptance of the Section 301 China reinstatement of certain product exclusions under Harmonized Tariff Schedule of the United States (HTSUS) classification 9903.88.67 will be available in the Automated Commercial Environment (ACE) as of 7 a.m. eastern standard time, April 12, 2022.

Reminder: importers, brokers, and/or filers should refer to CSMS 39587858 (Entry Summary Order of Reporting for Multiple HTSUS when 98 or 99 HTSUS are required) for guidance when filing an entry summary in which a heading or subheading in Chapter 99 is claimed on imported merchandise.

Questions from the importing community concerning ACE entry rejections involving product exclusions should be referred to their CBP Client Representative. For questions related to Section 301 entry-filing requirements, please refer to CSMS message 40969690 Information on Trade Remedy Questions and Resources.

Related CSMS Messages: 51166038, 50980729, 50967853, 46607637, 45318223, 44450418, 44451479, 44243021, 44198137, 44016918, 43600625, 43534641, 43400564, 43401456, 43134617, 43044185, 43043838, 42839255, 42837261, 42693720, 42566220, 42355914, 42203908, 42219187, 42181055, 42180527, 42048963, 41955151, 42049352, 48134749, 40003027, 40002982, 40001360, 19-000052, 41702837, 41179115, 41052773, 41538917, 40984510, 40901928, 49710742, 40330403, 40208881, 40969690, 40564257, 39587690, 39587858, 39473933, 39268267, 39169565, 38840764, 19-000332, 19-000260, 19-000244, 19-000238, 19-000236, 19-000212

Evrnu Unveils Recyclable Material Made from 100% Textile Waste

Textile innovations company Evrnu has developed what it calls the world’s first high-performance, recyclable lyocell material made entirely from cotton textile waste.

Read more HERE.

Tuesday, April 5, 2022

Burlington Awarded $11 Million Contract for Air Force Fabric

Burlington Apparel Fabrics, Greensboro, North Carolina, has been awarded a maximum $10,951,579 letter contract for poly/wool serge cloth. This was a sole-source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a one-year contract with no option periods. Location of performance is North Carolina, with an April 4, 2023, ordering period end date. Using military service is Air Force. Type of appropriation is fiscal 2022 through 2023 defense working capital funds. The contracting activity is the Defense Logistics Agency Philadelphia, Pennsylvania (SPE1C1-22-D-1534).