Fashion Intel & Analysis
Today, in a joint statement, the United States and the European Union announced an agreement on tariff reductions. Under the agreement, the EU will eliminate tariffs on imports of live and frozen lobster products (valued at $111 million in 2017) and the U.S. will reduce tariffs by 50% on certain products including prepared meals, crystal glassware, surface preparations, propellant powders, and cigarette lighters and lighter parts (valued at $160 million annually). The tariff reductions begin retroactively on August 1, 2020. According to the statement, these tariff reductions are the first U.S.-EU negotiated reductions in duties in more than two decades. U.S. Trade Representative Lighthizer and EU Trade Commissioner Hogan said " We intend for this package of tariff reductions to mark just the beginning of a process that will lead to additional agreements that create more free, fair, and reciprocal transatlantic trade."
This week U.S. Customs and Border Protection (CBP) released updated Textile Enforcement Statistics for the third quarter of FY 2020 (April - June 2020). his data reports on the various CBP enforcement activities related to textile and apparel products.
There is an impact on the enforcement activities due to the slowdown in trade in response to COVID-19. During this time period, the number of non-IPR seizures (including smuggling) decreased from 182 to 65 and the value of these seizures fell from $1.5M to $1M. The total number of IPR-related seizures decreased from 1,745 ($5.3M in value) to 621 ($4.9M in value). CBP issued no commercial fraud penalties and 62 cases of liquidated damages for textile shipments.
One of the key indicators of textile enforcement are the findings from the foreign factory visits by Textile Production Verification Teams (TPVTs). During this time period, CBP did not visit any countries. Earlier in 2020, CBP visited 3 countries, 29 factories, and found 59% discrepant.
The CBP statistics also report fewer cargo examinations and fewer audits. Finally, CBP reports that they collected $536M in textile-related Section 301 duties, which is a substantial decrease from the 301 duties collected earlier in FY2020. The textile enforcement statistics can be found here on CBP’s website.
In a Federal Register notice, the Office of the United States Trade Representative (USTR) announced modifications to several product exclusions from List 3 of the China 301 tariffs. The product exclusions modified in the notice apply from September 24, 2018 to August 7, 2020. According to USTR, the amendments in the notice are retroactive to the date the original exclusions were published and do not extend the period for the original exclusions. U.S. Customs and Border Protection (CBP) will release instructions on entry implementation. The following textile and apparel products were included.
U.S. note 20(aaa) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS) is modified by inserting the following exclusion: Wallets, whether or not with wrist straps, of reinforced plastics, each measuring at least 17.5 cm long by 2 cm wide by 11 cm high and not more than 19 cm long by 2 cm wide by 11 cm high (described in statistical reporting number 4202.32.1000)
U.S. note 20(ll)(17) to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States, is modified by deleting “Imitation leather fabrics, of manmade fibers impregnated, coated, covered or laminated with 75 percent polyvinyl chloride (PVC) by weight” and inserting “Imitation leather fabrics, of manmade fibers impregnated, coated, covered or laminated with a minimum of 60% polyvinyl chloride (PVC) and 75% plastics by weight” in lieu thereof (described in statistical reporting number 5903.10.2090)
In a message (CSMS #43666933) U.S. Customs and Border Protection (CBP) announced updates to the suggested template for certificates of origin to include the U.S. – Japan Free Trade Agreement and the U.S. – Mexico – Canada Agreement (USMCA). The updated template is available here.