Recent Trade & Tariff Perspectives

March 2, 2022  |  Anahi Czeszewski  Product Development Manager

warehouse worker scanning barcode on a shipment 

Latest Developments on the Customs and Trade Front

The new year progresses with significant customs and trade developments—both for the U.S. import and U.S. export trade communities. From the recently passed America COMPETES Act of 2022, to the Russian sanctions levied by the United States regarding Ukraine—there is no dispute these developments warrant a closer review. Read on to understand the effects these changes can have on your supply chain and identify the steps you should take now to mitigate risk and maximize cost-savings opportunities.

Watch this week's Trade & Tariff Perspective:

 

America COMPETES Act and U.S. Innovation and Competition Act (USICA): A breakdown

In a response to the Senate’s U.S. Innovation and Competition Act (USICA), the U.S. House of Representatives released the America COMPETES Act of 2022 in late January. Both bills aim to increase U.S. economic competitiveness with China and address the global semiconductor shortage. However, several differences—which must be reconciled before a final bill can be signed into law—include:

Comparison of the USICA bill and America Competes Act 

Explore a more in-depth look into this new legislation.

The Import Security and Fairness Act

Also introduced in January was the Import Security and Fairness Act, addressing de minimis shipment activity in the United States—where more than two million small packages arrive daily. Currently, the United States has a de minimis threshold value of $800. During a single day, one can import shipments valued at not more than $800 without having to pay duties and taxes to U.S. Customs and Border Protection (CBP)—including punitive tariffs, such as the Section 301 (China) additional tariffs.

Significant changes proposed within this legislation include, but are not limited to:

Uyghur Forced Labor Prevention Act

The Uyghur Forced Labor Prevention Act (UFLPA)—signed into law on December 23, 2021—prohibits goods from being imported into the United States that are either produced in China’s Xinjiang province or by entities that source materials from anyone identified in the imminent UFLPA enforcement strategy—unless the importer can provide clear and convincing evidence that the goods were not produced with forced labor.

As published in the Federal Register January 24, 2022, a request for public comment was announced, and comments will be accepted until March 10, 2022. Interested parties should follow the instructions in the Federal Register notice to submit comments. Thereafter, a public hearing will be held by the Forced Labor Enforcement Task Force, and a strategy for supporting enforcement of section 307 of the Tariff Act of 1930, as amended, will be developed. Additionally, the Department of Homeland Security and CBP will issue guidance for importers.

As the ban is set to become effective June 21, 2022, use this time to review the entirety of your supply chain to ensure you are prepared.

Sanctions on Russia have been levied by the United States and global allies

The crisis in the Ukraine continues and remains a very fluid situation.

  • The United States Office of Foreign Asset Controls (OFAC) announced on February 24, 2022, a broad range of sanctions against multiple Russian financial institutions and their subsidiaries that target "core infrastructure of the Russian financial system," including all of Russia's largest banks. This move will impact the ability of Russian state-owned and private entities to raise funds from the global financial system. These sanctions target nearly 80 percent of all banking assets in Russia.
  • In addition, OFAC has sanctioned a number of Russian and Belarus entities and individuals.
  • The Bureau of Industry and Security (BIS) announced on February 24, 2022, a broad range of restrictions on exports to Russia as well.
  • BIS said, “Russia’s access to cutting-edge U.S. and partner country technology will halt. Its defense industrial base and military and intelligence services will not be able to acquire most Western-made products. Even most products made overseas using sensitive U.S. technology will be restricted for export to Russia.”

As this situation evolves, stay in the know by subscribing to our Client Advisories.

Changes for U.S. export filings proposed

The U.S. Census Bureau—an agency responsible for collecting, compiling, and publishing export trade statistics for the United States—proposed "country of origin" data element when the foreign origin indicator is selected under the Foreign/Domestic Origin Indicator field in the Automated Export System (AES). As indicated in the Federal Register Notice, foreign trade statistics, “Do not provide insight sufficient to identify the gaps in domestic product and supply, evaluate supply chains, or address trade imbalances.”

If adopted, exporters would be required to declare specific country of origin for items. The period for public comments from interested parties closed on February 14, 2022. Comments will now be reviewed, and a public hearing will follow.

Review our recent Client Advisory to learn more about these proposed changes.

How can C.H. Robinson help?

The current trade climate is extremely complex and there are no signs of this slowing down or getting easier. Whether it is understanding what certain pending legislation means to your business or how recently implemented tariffs will affect your landed costs, we break down what’s happening each week for the trade community. Subscribe to our Client Advisories and Trade and Tariff Insights to be notified when changes take place, or connect with one of our trade policy experts to learn even more.

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