Customs Duty

For Chinese goods already on their way to the U.S., 25 percent tariffs on $200 billion of Chinese goods that were to have taken effect at 12:01 a.m. Friday (see 1905060028), "the 10 percent duty rate will still apply," said Customs and Border Protection in updated "guidance" Thursday. That was in keeping with Office of the U.S. Trade Representative instructions a day earlier. CBP's new guidance was to correct the agency's errant system update tariffing all Chinese goods at 25 percent if they entered U.S. ports after 12:01 a.m. Friday, regardless of when they left China, in direct contradiction to USTR's instructions, blogged trade lawyer Paula Connelly Thursday. The discrepancy was likely causing "quite a bit of confusion," she said. USTR soon will publish the terms of this List 3 exclusion process, said Thursday's Federal Register notice making the tariff increase legally binding. U.S. importers “should move quickly to assess the impact" of the higher duty rate and "consider whether to prepare an exclusion request,” advised Covington & Burling Wednesday.

Industry reacted against President Donald Trump’s surprise tweets Sunday threatening to hike to 25 percent the Section 301 tariffs currently at 10 percent on $200 billion in Chinese imports, effective this Friday. The uproar overshadowed industry’s response to Trump’s accompanying threat to impose 25 percent tariffs “shortly” on $325 billion more in Chinese goods previously “untaxed.” That would cover virtually all remaining imports to the U.S. from China.

Comments are due on or around May 17 on an Airbus-OneWeb application to the Commerce Department's Foreign Trade Zone Board to OK a satellite production facility in Brevard County, Florida, says a notice for Tuesday's Federal Register. It says production in the foreign trade zone would mean exemption from customs duty payments on foreign-status components.

FCC Chairman Ajit Pai said the April 12 commissioners’ meeting will focus on 5G for a second straight month. It includes the public notice for the auction of the 37, 39 and 47 GHz bands and a plan for sharing the 37 GHz band between industry and DOD. 5G is “the next big thing in wireless,” Pai blogged. He plans votes on nixing a rural telco USF rate floor and granting part of a USTelecom forbearance petition seeking ILEC relief from certain structural-separation and reporting duties. And there's a media modernization item, among others in the pipeline (see 1903210072).

Plastic iPad 2 “Smart Cover” cases are classifiable in the Harmonized Tariff Schedule as articles of plastic dutiable at 5.4 percent, not as duty-free accessories for automatic data processing machines, said the Court of International Trade in a decision made public Tuesday. Apple argued for the case’s duty-free classification as an accessory because it also functions as a stand. But the court agreed with a Customs and Border Protection ruling that the cases are explicitly excluded from that classification. Apple didn’t comment.

Last week's terrorist attack in New Zealand puts more pressure on lawmakers to regulate online platforms, some experts said. Even before that, 70-80 proposals for regulating platforms were under consideration globally, Hogan Lovells preliminarily found in an ongoing six-month survey. Early results show "by far the most proposals we tracked come from the government," emailed Hogan Lovells (Brussels) competition lawyer Falk Schoening.

Recent supply-chain “activity” emanating from tariffs on Chinese goods “ebbed and flowed” among clients of contract electronics manufacturer Jabil, said CEO Mark Mondello on a Q2 call Thursday. “We've been very helpful to a significant amount of our customers in terms of game plans” for shifting supply chains outside China, he said. “Some have been proactive and some are taking a wait and see.” For customers seeking to modify supply chains to escape or reduce duties exposure, “we are very well-positioned to accommodate them,” he said. “It's kind of a wait and see for a lot of us in the next six to eight weeks” as U.S.-China trade talks move toward some unknown conclusion, he said. The U.S. "before too long" will have either "a good result or we’re going to have a bad result,” U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee Tuesday (see 1903130036)

Privacy advocates said a Washington state law sought by Microsoft and other tech companies provides too little protection to consumers. The House and Senate privacy bills lack teeth and cede too much control to companies, American Civil Liberties Union and Consumer Reports officials said in interviews. State Sen. Reuven Carlyle (D) responded that his bill is “the strongest, meaningful privacy measure that is on the table.” House Innovation Committee Chair Zack Hudgins (D) has appeared more open to making changes in response to concerns, telling us his chamber’s bill is a “work in progress.”

Senate Commerce Committee Chairman Roger Wicker, R-Miss., said Wednesday he favors reauthorization of the Satellite Television Extension and Localism Act, one of several communications policy issues the committee is “intent on moving” on this year. Wicker said during an Incompas event he is bullish about advancing privacy legislation but less certain about prospects for bills on net neutrality and improving conditions for 5G. Other federal officials meanwhile noted there's no 5G "killer app" yet.

Delaying the increase to 25 percent on the 10 percent Section 301 tariffs on $200 billion in Chinese imports will require a “presidential proclamation” or publication of a Federal Register notice before the midnight Friday deadline to avert an automatic rate hike, emailed customs law expert Ted Murphy of Baker McKenzie Monday. President Donald Trump, for the second time since December, postponed the rate hike in a pair of tweets Sunday, citing “substantial progress” in U.S.-China trade talks (see 1902250001).