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On February 27, 2020, President Trump announced that he would not impose duties on imports of titanium sponge pursuant to his authority under Section 232 of the Trade Expansion Act of 1962, a statute that allows for the imposition of duties where imports threaten to impair the national security.  The decision was well-received by much

Late last Friday evening, President Trump issued a proclamation imposing duties on imports of certain derivatives of steel and aluminum articles that have been found to threaten the national security.  The proclamation specifically identified products that were subject to the new duties (effective February 8, 2020), but it was unclear whether two yet-to-be-released Annexes would

On Friday, January 24, 2020, President Trump issued a proclamation expanding duties imposed on steel and aluminum articles pursuant to Section 232 of the Trade Expansion Act, commonly referred to as “Section 232 duties,” to certain downstream steel and aluminum “derivatives.”

Application of 232 duties to “derivative articles” is authorized by statute.  Indeed, while the

On November 7, the United States Government Accountability Office (“GAO”) released a report assessing actions the U.S. Department of Commerce (“Commerce”) and U.S. Customs and Border Protection (“CBP”) have taken to address weaknesses in the process for collecting antidumping (“AD”) and countervailing (“CV”) duties.

The report noted the following facts:

  • For bills issued in fiscal years 2001 – 2018, CBP collected over $20 billion in uncollected AD/CV duties.
  • For bills issued over the same period, $4.5 billion in AD/CV duties remained uncollected as of May 2019.
  • Only 20 importers accounted for $1.93 billion (or 43.3 percent) of the $4.5 billion in AD/CV duties with the remaining $2.52 billion (or 56.7 percent) in uncollected duties accounted for by 1,118 importers.

The report also notes that one cause for concern at Commerce is the significantly increased workload, with a lack of corresponding increase in staff.  The report explains that from fiscal years 2012 to 2018, the total number of AD/CV duty orders enforced by Commerce has increased from 280 to 457, with the number of case analysts increasing only from 118 to 127.  Commerce has sought to address the increased workloads by implementing a variety of internal procedures and establishing a training unit.

CBP has also undertaken variety of measures to address uncollected duties.  Perhaps most interesting is CBP’s use of new statistical models to identify key risk factors associated with nonpayment.  As noted above, with only 20 importers accounting for more than 43 percent of the value of billed but uncollected duties, identifying high risk importers would appear to be a prudent step.

The report also identified the United States’ retrospective system of duty assessment as one factor contributing to complexities in duty collection faced by both agencies.  The retrospective system is widely viewed as a net positive, however, which leads to more accurate duty assessment over time.  The report concludes that while the two agencies have undertaken measures to address weaknesses in the process for collecting duties, more can be done.
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The Enforce and Protect Act (“EAPA”), signed into law as part of the Trade Facilitation and Trade Enforcement Act of 2015, established procedures for a wide variety of stakeholders to submit allegations of evasion of antidumping and countervailing duties to U.S. Customs and Border Protection (“CBP”).  After several years, it appears this new tool for addressing evasion of duties has started to take off.

CBP’s Trade and Travel Report for Fiscal Year 2018 relates a significant uptick in the agency’s investigative work stemming from EAPA allegations.  In particular, CBP received nearly double the allegations in fiscal year 2018 that it received in fiscal year 2017.  The agency also issued final determinations in 12 investigations, up from only 1 the year before.  Despite the uptick in work, CBP touts having “met every statutory deadline for all EAPA investigations,” even rendering decisions ahead of statutory deadlines in some cases, and proclaims that this process has “proven to be a success{}.”  CBP’s bullish outlook should encourage even more stakeholders to come forward with allegations and to participate in the process.
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Last April, the United States Trade Representative (“USTR”) initiated an investigation to enforce U.S. rights stemming from a World Trade Organization (“WTO”) ruling concerning the European Union’s (“EU”) provision of illegal subsidies on the manufacture of large civil aircraft.

In the notice initiating that investigation, USTR proposed imposing additional ad valorem duties of up to

Following President Trump’s announcement of his decision to delay the March 1, 2019 deadline to increase tariffs from 10% to 25% on $200 billion of Chinese goods (i.e., List 3 items), Ambassador Lighthizer testified before the House Ways and Means Committee about the progress that has been made on concluding a binding executive agreement with

Introduction

On 11 January 2019 and 18 January 2019, the United States Trade Representative (“USTR”) and the European Commission (“Commission”) released their respective negotiating objectives for a U.S.-EU trade agreement, potentially marking a new phase in the transatlantic trade relationship.  The release follows from the joint agenda agreed to in July 2018 by European Commission President Jean-Claude Juncker and U.S. President Donald Trump to work together toward “zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” increased cooperation on regulatory issues and standards, and protecting European and U.S. companies from unfair global trade practices.  The release could also signify an important expansion of market opportunities for EU and U.S. companies.

The road ahead is fraught with obstacles, however, as the EU and U.S. negotiating positions differentiate substantially.  The USTR’s summary of specific negotiating objectives seeks a broad free trade agreement with the EU, including on sticky issues such as agriculture, while the Commission aims to limit trade negotiations to reciprocal commitments on conformity assessment and industrial goods. This makes any future transatlantic trade negotiations challenging at best and raises the question of whether the two sides will be able to arrive at an agreement at all. The situation is further complicated by the Trump administration’s ongoing 232 investigations on imports of certain automobiles and parts, as the EU stands ready to suspend any trade talks and retaliate with duties on U.S. exports should the investigation lead to the imposition of tariffs on certain EU automotive products.

EU Perspective

EU Commissioner for Trade, Cecilia Malmström, has clearly stated that the EU is “not proposing to restart a broad free trade agreement negotiation with the US,” referring to the breakdown of negotiations, five years ago, of the Transatlantic Trade and Investment Partnership (TTIP).  On 30 January 2019, the Commission published a progress report concerning the joint agenda agreed to in July 2018.  The report indicates that talks between the parties have so far focused on potential regulatory cooperation initiatives.  The EU has also taken some measures to avoid the escalation of trade tensions with the United States.  
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As we previously reported, the United States, Canada, and Mexico have reached agreement on the United States-Mexico-Canada Agreement (“USMCA”) to replace the North American Free Trade Agreement (“NAFTA”), which has governed trade between the three countries since 1994.  Article 32.10 of the agreement requires each country to notify the others of any intention to negotiate a free trade agreement with a “non-market country.”  The provision defines a “non-market country,” as any country that: (1) one or more USMCA member countries has determined to be a non-market economy for purposes of the USMCA member country’s trade remedy laws; and (2) none of the USMCA member countries has a free trade agreement with.

Last year, as a result of the expiration of certain language in China’s World Trade Organization (“WTO”) Protocol, the U.S. Department of Commerce conducted a review of its designation of China as a non-market economy country for purposes of the U.S. antidumping laws.  The Department announced the results of its review of China’s status on October 26, 2017, concluding that China continued to be a non-market economy country.  Further, none of the USMCA member countries have a free trade agreement with China.  As a result, China would be considered a “non-market country” for purposes of the USMCA.

Article 32.10 requires a USMCA member country seeking to negotiate a free trade agreement with China, or any other “non-market country” to:
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