May ’23 at-a-glance … taxes, tariffs & trade

300+ new sanctions and restrictions introduced against Russia

The U.S. levied a new round of more than 300 sanctions and restrictions on Russia and third-parties allegedly helping Russia evade sanctions, aligned with the G7 commitment to support Ukraine. The departments of Commerce, State and Treasury all acted against individuals and organizations. Complete details are in the press release from the Department of the Treasury. “It continues to become increasingly important to understand every link, even the most minor, in your supply chain,” said Christine Sohar Henter, NAFEM legal counsel, Barnes & Thornburg.

Proposed act would require Congressional approval of unilateral, presidential trade actions

Introduced by Republican Senators, the Global Trade Accountability Act would require both chambers of Congress to approve any unilateral trade actions by the president before they would take effect. This includes any increases in tariffs or duties, tightening of tariff-rate quotas or quantitative restrictions on imports, and other restrictions or prohibitions on imports. The act would allow for national-emergency exceptions for 90 days, after which the president would still have to obtain approval from both chambers of Congress.

Section 301 litigation decision appealed

The lead case in the litigation challenging the Section 301 tariffs was appealed to the U.S. Court of Appeals for the Federal Circuit in mid-May. This follows the decision by the U.S. Court of International Trade (CIT) affirming the rationale the U.S. Trade Representative (USTR) utilized in imposing the tariffs. The opening brief is due July 17, and the government will have 45 days to file its response brief.

Customs and Border Protection updates

Several items of interest to members were recently announced by U.S. Customs and Border Protection (CBP):

  • 200% import duties on aluminum and derivative articles that are products of Russia were delayed from April 10 to May 10 to give CPB time to update their software.
  • Importers are no longer required to email information to CBP to activate approved Section 232 exclusions in the agency’s Automated Commercial Environment (ACE). CBP now directly processes approved Section 232 exclusions based on weekly lists provided by the U.S. Department of Commerce (DOC). Importers can check every Friday to determine if a Section 232 approved product exclusion is active in ACE. Importers have 100 days to request a refund of Section 232 duties paid on previous imports of the same goods granted an exclusion.
  • As a reminder, in implementing the Uyghur Forced Labor Prevention Act (UFLPA) CBP makes the presumption that any items manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China are produced using forced labor and not entitled to entry to the U.S. CBP’s new dashboard provides statistics on shipments subjected to UFLPA reviews and enforcement actions. According to Louis Arandia, NAFEM legal counsel, Barnes & Thornburg, CBP has seized more than $45 million in trade so it’s critical to know every step in your supply chain.

Section 232 news: Tariff negotiations underway with EU, industry working toward uniform steel emissions reporting, Supreme Court will not hear legal challenge

  • The U.S. – EU agreement that replaced Section 232 tariffs with tariff rate quotas (TRQ) on steel and aluminum expires in October. If a new agreement is not reached, the U.S. will reimpose 25% tariffs on steel and 10% tariffs on aluminum imports from the EU. The EU would then place retaliatory tariffs on a range of U.S. products. Instead, the Biden Administration is pressing the EU to agree to a “green steel alliance” against China’s coal-blast furnaces.
  • The Global Steel Climate Council (GSCC), an international group of steel manufacturers, urged the U.S. and EU to adopt a single standard for global emissions that would favor use of electric arc furnaces over traditional blast furnaces. The GSCC is drafting a technology-agnostic global Steel Climate Standard to measure and report steel carbon emissions.
  • The U.S. Supreme Court denied a petition from steel importers challenging the DOC report that led to the Section 232 tariffs on steel and aluminum. The Supreme Court’s refusal to hear the case solidifies a Federal Circuit ruling that dismissed claims arguing that President Trump ordered the duties based on a DOC report that showed no impending threat to U.S. national security. The Supreme Court last year refused to hear a separate challenge by steel companies to President Trump’s 2018 decision to double tariffs on steel imports from Turkey, also on national security grounds.