Fashion Intel & Analysis

President Trump has announced the U.S. and China have reached a “very substantial phase one deal,” according to White House reporters.  Treasury Secretary Steven Mnuchin confirms what the media had been suggesting would be part of the deal – the increase in tariffs that was scheduled for Tuesday, October 15th, will not go into effect.  That increase would have raised the additional tariff on products covered by Tranches 1, 2 and 3 to 30%.   There are no additional details at this point, and it may be a while since the White House says the agreement will be written in the next few weeks.  According to press reports, the deal will cover financial services, agriculture, and some intellectual property issues. President Trump suggested the deal could be signed as early as next month when he and President Xi Jinping meet for the Asia Pacific Economic Cooperation (APEC). We will keep USFIA members updated as additional information becomes available.

The U.S.-China trade negotiations are going on right now in Washington DC.  President Trump tweeted that China is eager to make a deal. “Big day of negotiations with China. They want to make a deal, but do I?”, read the tweet. Trump added that he is scheduled to meet with Chinese Vice Premier tomorrow. 

The tweet comes at the same time as media reports of a possible interim trade deal involving increased purchases of U.S. agricultural products, currency, and intellectual property. We will keep USFIA members updated as more information becomes available. 

While the trade talks seem to be more positive this week, Trump Administration officials have acknowledged that they are working on an Executive Order to increase inspections on imports from China.  In the Financial Times, Peter Navarro, the White House trade and manufacturing policy advisor, says “Options are being evaluated through the inter-agency process to address a significant problem that steals our intellectual property, harms our manufacturers and workers, and kills Americans with deadly drugs.”  In other press reports, the Administration is also raising concerns about abuse of the Section 321 provision covering de minimus shipments.  According to Pro Publica U.S. Customs & Border Protection reports the number of small packages coming into the U.S. increased 46% in fiscal year 2018 and the agency is processing 1.8 million items per day. 

The U.S. Department of Labor has released the 18th annual report on its 2018 Findings on the Worst Forms of Child Labor. The report, prepared by the Department’s Bureau of International Labor Affairs (ILAB), assesses the progress and efforts made by U.S. trade beneficiary countries and territories to eliminate child labor through legislation, enforcement mechanisms, policies, and social programs.  

This year, the report found 12 countries – including Colombia, El Salvador, Guatemala, and India- have met the criteria to reach ILAB’s highest assessment of “Significant Advancement”, which requires a broader baseline of legal and policy labor standards to be met. The report suggests more than 1,900 actions to be taken to reduce child labor, and over 60% of the suggestions relate to the need to strengthen child labor laws or improve the enforcement of such laws. “By focusing on adoption of strong legislative frameworks and better enforcement of national laws, governments can create a strong foundation of protections for vulnerable children and families from child labor and other labor abuses,” according to the report.   One country that is attracting new apparel business, Burma, receives the lowest ranking.

The 2019 Miscellaneous Tariff Bill (MTB) cycle is slated to begin this week. The U.S. International Trade Commission (ITC) will open its portal and begin accepting MTB petitions at 8:45 AM ET on October 11, 2019 and the portal will remain open for 60 days, until December 10, 2019. Under the MTB process, U.S. importers may petition for duty-free or reduced-duty treatment of certain imported products by submitting an MTB petition to the ITC. If you filed MTB petitions back in 2016 you may be familiar with the process and ready to submit a renewal. Regardless, ITC has published a handful of resources to help you prepare for the 2019 process. 

Background: What Is the MTB? 

The Miscellaneous Tariff Bill (MTB) Act temporarily reduces or suspends the import tariffs on specified products that are not available domestically.  U.S. importers may petition for duty-free or reduced-duty treatment of certain imported products under the MTB process. In general, MTB requests should be “non-controversial”, meaning there should be no domestic U.S. production or opposition from domestic U.S. producers and requests should not create substantial revenue losses for the United States. 

How To Prepare Your Petition 

Before you sit down to submit your petition, it’s important to have gathered all the required information, because you must complete your petition in a single session. Click here to see ITC’s full petition checklist. Crafting specific article descriptions is critical for success during the MTB process. ITC encourages you to check CROSS rulings for your tariff heading and seek an e-ruling from CBP to include with your petition. In addition, the petition requires information on the product and the market for the product, domestic production, and an estimate number of imports and market share. Finally, prepare early and file early. Time and resources permitting, if ITC spots an issue with an early filing, they can contact the petitioner to address the issue. 

Again, as you prepare to write an article description, know where Customs classifies your product and look at the tariff line’s coverage and descriptive language. Plan to create a verbal snapshot that distinguishes your product, considering visible physical characteristics and using precise language. For additional guidance, you can access ITC’s training sessions, including a workshop on writing an article description for textiles, apparel, footwear, and headwear articles and writing a description for travel goods, handbags, sporting goods, and overlapping article descriptions

If you want to renew a MTB that is already in effect, remember that anyone can file for a renewal.  The request to renew need not be from the 2016 petitioner. The renewal is of the 9902 provision not the prior petition and undergoes the same review process. 

If you filed in 2016, you can expect a similar process this year, though anticipate some MTBPS enhancements and updated guides from ITC. One important thing to note is that this year’s petition requires additional information from domestic producers for comments on petitions.  Here is the list of accessories, textiles, home textiles and apparel products that currently are eligible for MTB benefits.  

Additional MTB information and guidance can be found on ITC’s website.  USFIA will also be hosting a webinar on October 21st to help prepare for the MTB cycle, stay tuned for more details and registration.