Importer Says Speaker Entries Illegally Denied In-Transit IEEPA Tariff Exclusion
CBP improperly denied importer Software Brokers of America, doing business as Intcomex, the temporary exclusion from International Emergency Economic Powers Act tariffs on China for in-transit merchandise, the importer argued in a Dec. 5 complaint at the Court of International Trade (Software Brokers of America d/b/a Intcomex v. United States, CIT # 25-00381).
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Intcomex's lawsuit concerns six entries of Bluetooth speakers that were made in Hong Kong by JBL. Each entry was loaded onto a shipping vessel in China and shipped on Jan. 9, 2025, and entered the U.S. on March 5, 2025, the complaint said. CBP liquidated the goods subject to a 20% IEEPA tariff on China.
Initially, in February, the Trump administration imposed a 10% IEEPA tariff on China that included an exclusion for in-transit goods. The exclusion specifically applied to goods "loaded onto a vessel at the port of loading or in transit on the final mode of transport prior to entry into the United States" before Feb. 1 and entered for consumption into the U.S. before March 7.
CBP created a secondary subheading in the Harmonized Tariff Schedule, subheading 9903.01.23, for importers to certify in-transit merchandise as IEEPA tariff-free. On March 6, the China IEEPA tariff was upped to 20%, though the exception remained. Finally, on March 7, CBP issued a notice that the exception had ended.
Intcomex said its entries clearly fall within the bounds of the exception. All six entries "left the port of origin on January 9, 2025," which is before Feb. 1, and entered the U.S. on March 5. Each entry summary declared that the goods were classified under subheading 9903.01.23.
"Intcomex thus complied with the President’s and CBP’s requirements to certify entitlement to IEEPA tariff-free treatment," the brief said.
Nevertheless, the entries were hit with a 20% IEEPA tariff. Intcomex protested the imposition of the tariffs, but CBP denied the protest, stating that the "determining date is the date the goods are entered for consumption or withdrawn from warehouse for consumption. Not the date when the good left the foreign port or in-transit."
"CBP nowhere explained why it was treating merchandise that entered the United States before the March 7 cutoff date as if it were merchandise that entered on or after the cutoff date," the complaint said.