Since the beginning of 2018, President Trump has issued three proclamations to address an imbalance in unfair trade practices. While mainly targeted at China, the second of the three actions has taken a protectionist stance on a global basis for the U.S. steel and aluminum industry. Heavy tariffs have been levied against many steel and aluminum products u
nder Section 232 of the Trade Act of 1974 with more coming under, the now pending, Section 301 duties.
Proclamations Affect More than Steel and Aluminum
So, what does this mean to the importer? The direct impact, of course, will be added duty costs associated with the importation of affected product from countries subject to the “special duties.” On the surface, it may seem a simple matter to some, pay the duties, pass the cost along to consumers, and live to fight another day. The extent to which these proclamations may affect importers goes much deeper though. President Trump called out countries in the Section 232 proclamations on steel and aluminum to police their own supply chains to ensure the transshipment of materials does not occur. It has already become evident that U.S. Customs and Border Protection (CBP) is taking this very seriously with increased scrutiny at ports of entry reviewing documentation and country of origin marking for affected products.
Increased CBP Scrutiny via Requests for Information
As the trade war continues to heat up, we can also expect to see CBP increase the number of requests for information via CBP Form 28. Customs is likely to review origin claims under free trade agreements, such as NAFTA, and request invoices and payment information to confirm values declared at time of entry. The latter targeted to ferret out attempts at duty evasion by under reporting the entered value. Customs and importers alike may find themselves reviewing products to ensure they are properly classified under the HTSUS, either placing them within or outside the scope of the proclamations.
Principles of Reasonable Care & Compliance More Important than Ever
Clearly, the principles of reasonable care and compliance will become more important than ever. Staying abreast of changes in regulations and ensuring goods are properly declared for entry will be paramount. A close partnership with your Customs broker will make certain that you are informed of how the changes will affect you, and the best practices to mitigate any upcoming changes. Please feel free to contact the A.N. Deringer, Inc. Compliance Department at (518) 298-8281 to discuss these changes or your compliance concerns.
