North American Trade & Tariff Insights

Stay up to date on the latest news, insights, perspectives, and resources from our customs and trade policy experts.

To deliver our market insights to our global audiences in the timeliest manner possible, we rely on machine translations to translate these insights from English.

This Week's Trade & Tariff Perspective

September 21, 2022  |  Carlos Banda  Manager, Account Management

aerial view of container ship being guided out to sea 
What’s the Latest on the Southern Border—An Update on Trade and Transportation Facilitation

Recent developments for our neighboring country to the south warrant a closer review. From the dispute settlements the United States and Canada have initiated with Mexico, to the introduction of a new program intended to streamline import and export transactions along the U.S. and Mexico border—read on to understand the effects these changes can have on your supply chain and identify the steps you should consider now to mitigate risk and maximize cost-savings opportunities.

Listen to this week's Trade & Tariff Perspective (recorded in English):


Dispute settlement initiated under the United States–Mexico–Canada Agreement

The United States and Canada have initiated dispute settlement consultations with Mexico under the United States–Mexico–Canada Agreement (USMCA). The parties have begun what could be a lengthy process of consultations and formal panel proceedings under chapter 31 (Dispute Settlement) of the trade agreement.

If Mexico is found to be in violation of the terms of USMCA, and the parties are unable to come to a resolution, the United States and Canada would be allowed to suspend the application of benefits to Mexico, which could result in the imposition of retaliatory tariffs.

The consultations relate to measures taken by the Mexican government that affect the interests of the U.S. and Canadian energy sector in favor of the Mexican state-owned utility, Comisión Federal de Electricidad (CFE), and oil and gas company, PEMEX.

Mexican Congress’ Energy Reform: A closer look

In 2013, the Mexican Congress passed an Energy Reform, allowing foreign investment into the energy sector, which had been heavily regulated for decades. In 2018, the political landscape in Mexico changed with the election of a new president.

During the transition of the new government, representatives from existing and incoming administrations jointly participated in the final rounds of USMCA negotiations. The new government requested that specific wording be included into Chapter 8 (Recognition of Mexican Ownership of Hydrocarbons), indicating that Mexico retains the right to reform its legal regime and maintains ownership of its hydrocarbons. This wording is now at the center of the dispute.

Since the new administration took office, Mexico has pursued changes in its energy policy. In 2021, Mexico amended the Electric Power Industry Law in order to prioritize CFE-generated electricity over that of private competitors. Mexico also blocked companies from operating renewable energies and restricted the import of electricity and fuel as permitted in 2013 legislation. Most recently in 2022, the government required that national gas operator, Centro Nacional del Control del Gas (CENEGAS), demonstrate that natural gas was sourced specifically from PEMEX.

Potential implications for U.S. and Canadian companies based on dispute

The dispute may have important implications in the North American energy sector. The USMCA’s rules of procedure allow a panel to consider written views submitted by non-government entities during the dispute.

It will be interesting to see if Canadian and American companies participate, given their economic interests in the matter. If no agreement is reached and the United States and Canada impose retaliatory tariffs, these can be imposed on any product exported from Mexico. This could have an impact on many U.S. and Canadian supply chains and total landed cost.

For now, the parties have until October 3, 2022, to resolve this matter through consultations. This week, U.S. Secretary of State John Blinken met with Mexican President Andrés Manuel López Obrador and this topic was most likely on the agenda, given the comments made the following day by the Mexican president during his daily news conference.

Streamlining border transportation crossings on the Southern Border

Mexican authorities rolled out the Aviso de Cruce (AVC) program on August 1, 2022. The program is intended to replace the Documento de Operacion para Despacho Aduanero (DODA) and Proyecto de Integración Tecnológica Aduanera (PITA) options. The program’s objective is to streamline import and export transactions along the U.S. and Mexico border by linking cargo manifests to a transport vehicle using RFID tags.

However, the rollout of the program has not gone smoothly. The two agencies involved—Servicio de Administración Tributaria (SAT) and Agencia Nacional de Aduanas (ANAM)—were initially not sharing complete information via their systems. This caused major problems along the border because transactions were not being matched in the SAT system, the system responsible for revenue collection. Until both agencies are able to coordinate further for a streamlined implementation, the implementation of this program has been placed on hold until further notice.

Stay informed on developments

C.H. Robinson continues to closely monitor all the latest developments. Subscribe to our Client Advisories and Trade and Tariff Insights to be notified when changes take place. Connect with one of our trade policy experts to learn more.


Our information is compiled from a number of sources that to the best of our knowledge are accurate and correct. It is always the intent of our company to present accurate information. C.H. Robinson accepts no liability or responsibility for the information published herein.

Explore all market insights

Review recent perspectives

warehouse employees looking at a clipboard with freight boxes

Have trade or tariff related questions?

Stay in the know with weekly trade and tariff email notifications

Thank you for signing up for trade and tariff updates from C.H. Robinson. Read our global privacy notice.

Trade & Tariff Resources

Get the latest news regarding tariffs and trade that can impact your business. We break down the variables of recent changes into simple, effective summaries you can use to better understand the ever-changing and often complicated trade policy and enforcement environment.

U.S. Tariff Search Tool

Identify duty exclusion eligibility and uncover duty refund opportunities.

Search by commodity using HTS-10 codes and potentially uncover millions of dollars.

U.S. Tariff Search Tool

Section 301: Unfair trade practices

What is it?

Section 301 of the Trade Act of 1974 — Allows the United States Trade Representative (USTR) to suspend trade agreement concessions or impose import restrictions if it determines a U.S. trading partner is violating trade agreement commitments or engaging in discriminatory or unreasonable practices that burden or restrict U.S. commerce.

Background ReportCongressional Research Service – Section 301 of the Trade Act of 1974 – August 2020

Update: May 3, 2022

Statutory review of all Section 301 tranches initiated—The Office of the United States Trade Representative (USTR) announced it would commence its statutory review of all active Section 301 tranches leading up to the four-year anniversary of the Section 301 China tariff actions. Accordingly, representatives of domestic industries were invited to submit their requests for continuation using the USTR’s comment portal.

Upon the closing of each comment period, the USTR will announce in subsequent notices whether it has received a request for continuation from a representative of a domestic industry benefiting from the tariff action. If the USTR receives a request, it will announce the continuation of the associated Section 301 tariff action as it undertakes a formal review.

As described in the statute, a review should cover “the effectiveness in achieving the objectives” of the Section 301 tariff actions. Additionally, other considerations in this review relate to “the effects of such actions on the United States economy, including consumers.” 

Update: March 23, 2022

Certain Section 301 duty exclusions reinstated—The Office of the United States Trade Representative (USTR) announced it would reinstate certain previously expired (and extended) product exclusions. Of the initial 549 eligible exclusions announced in October 2021, USTR has reinstated 352 product exclusions, retroactive to October 12, 2021, and extended through December 31, 2022.

What this means for your business—Uncover potential duty refunds using our U.S. Tariff Search Tool. Instantly search by Harmonized Tariff Schedule (HTS) and review the language within the “USTR Exclusion Extension Potential” section to determine your eligibility for retroactive duty recovery and for participation on a go-forward basis, through December 31, 2022.

Update: October 4, 2021

Reinstatement of Targeted Potential Exclusions — Following United States Trade Representative’s (USTR) announcement on October 4, 2021, the USTR has started a targeted tariff exclusion process. The agency invited public comments on whether to reinstate previously extended exclusions. Of the more than 2,200 exclusions granted, 549 were extended. Most previously expired on December 31, 2020. The USTR will evaluate, on a case-by-case basis, the possible reinstatement of each exclusion. If granted, the USTR will reinstate exclusions retroactively to October 12, 2021, and publish them in the Federal Register.

 

Section 232: National security concerns

What is it?

Section 232 of the Trade Expansion Act of 1962—Allows the president to adjust imports if the Department of Commerce finds certain products are imported in such quantities or under such circumstances as to threaten to impair U.S. national security.

Background ReportCongressional Research Service – Section 232 Investigations: Overview and Issues for Congress – August 2020

 

Section 201: Cause/threat to domestic industry

What is it?

Section 201 of the Trade Act of 1974—Allows the president to impose temporary duties and other trade measures if the U.S. International Trade Commission (ITC) determines a surge in imports is a substantial cause or threat of serious injury to a U.S. industry.

Background ReportCongressional Research Service – Section 201 of the Trade Act of 1974 – August 2018

Incoterms® Tool

Who bears the risk in your transaction, and when does the risk transfer from buyer to seller? Review these shipping terms.
Use the guide


PARS Tracker/Rapid Lookup Service

The Pre-Arrival Review System (PARS) Tracker lets truckload and LTL carriers moving freight from the United States to Canada search for a PARS number—a way to confirm that C.H. Robinson has submitted an entry for release of the cargo from the Canada Border Services Agency (CBSA) and that the entry has been accepted by CBSA. Once an entry has been accepted by CBSA, the carrier may proceed to the border for final processing and crossing into Canada.
Search for a PARS number


PAPS Tracker

The Pre-Arrival Processing System (PAPS) Tracker lets truckload and LTL carriers moving freight from Canada to the United States search for a PAPS number—a way to confirm that C.H. Robinson has submitted an entry for release of the cargo from U.S. Customs & Border Protection (CBP) and that the entry has been accepted by CBP. Once an entry has been accepted by CBP, the carrier can proceed to the border for final processing and crossing into the United States.
Search for a PAPS number


Canadian Logistics Forms and Links

Locate forms and resource links that support freight forwarding, customs brokerage and surface transportation in Canada.
Explore forms and links


Canadian Exchange Rate

This interactive database allows you to view the international customs exchange rates to and from the Canadian dollar for the past year. This can be useful in projecting the cost of shipments to and from various countries.
Look up an exchange rate

More trade topics & resources

Compliance checklists, on-demand webinars, and more from U.S. Customs and Border Protection.

Trade strategies to consider

Weigh speed, cost, capabilities, risks, and returns to determine how to keep your freight moving forward.

Trade & Tariff Client Advisories

Mitigate tariff risk, offset duties, and gain peace of mind.

Trade & Tariff News

Read up on the latest tariff news.

Trade & Tariff FAQs

Q: Are products entered under the Section 321 de minimis exemption (under $800) subject to Section 301 duties?

No, not right now. Goods properly entered under Section 321 are not subject to Section 301 duties. Please note that a formal entry is required if a shipment contains merchandise subject to AD/CVD. Goods subject to AD/CVD do not qualify for Section 321.

Something to keep an eye on: U.S. Customs and Border Protection (CBP) submitted a proposal in early September 2020 to the Office of Management and Budget that would eliminate the $800 de minimis exemption for goods subject to Section 301 tariffs. Additionally, in January 2022, the Import Security and Fairness Act was introduced to address Section 321 shipment activity. Significant changes proposed within this legislation are as follows:

Remember, Section 321, 19 USC 1321 is the statute that describes de minimis. De minimis provides admission of articles free of duty and of any tax imposed on, or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800. The de minimis threshold was previously $200 but increased with the passage of the Trade Facilitation and Trade Enforcement Act (TFTEA).

Q: Can I still apply for exclusions to the Section 301 (China) tariffs?

The time window to submit new exclusion requests is now closed. While the USTR approved, on average, 35% of requests under the first two actions, the approval rates under the third and fourth actions were 5% and 7%, respectively. 3 Be sure to check in with your trusted trade advisors to see if new comment periods open.

Be aware the USTR has completed its evaluation for the potential extension of 549 specific product exclusions granted from Lists 1, 2, 3, and 4. Accordingly, in March 23, 2022, of the 549 specific product exclusions, the USTR reinstated 352 previously expired Section 301 China duty exclusions, as published in the accompanying Federal Register notice. The exclusions were retroactively applied to October 12, 2021, and made valid through December 31, 2022.

Q: If I previously paid Section 301 (China) duties, but an exclusion was later issued by the United States Trade Representative (USTR), can I get my money back?

Yes. You have the opportunity to potentially recover duties paid on previous entry activity. Your customs broker, trade attorney, or trade consultant can submit a refund request via Post Summary Correction (PSC) or Protest as long as the entry has not exceeded the liquidation date plus 180-day time period (roughly 480 days from the original entry date). Remember, your company doesn’t have to be the one that requested the exclusion in the first place. You qualify as long as your product meets the specific description of the exclusion granted by the USTR.

Q: Are products used to support the fight against COVID-19 subject to the additional Section 301 (China) tariffs?

The USTR announced on March 20, 2020, that, prior to the COVID-19 outbreak, the agency had been working with the U.S. Department of Health and Human Services “to ensure that critical medicines and other essential medical products were not subject to additional Section 301 tariffs.” Consequently, the United States had not imposed tariffs on certain critical products, such as ventilators, oxygen masks, and nebulizers.

The USTR has since reviewed requests for exclusions on medical care products, resulting in exclusions granted on basic medical supplies, including gloves, soaps, face masks, surgical drapes, and hospital gowns. Since March 2020, the USTR has exempted certain medical products from Section 301 tariffs in several rounds of exclusions. 3

Q: What is the timing of duty calculations on immediate transportation in bond entries subject to Section 301?

Duties are due on goods that are entered for consumption, or withdrawn from warehouse for consumption, on or after the effective date of the provisional tariffs. For entries covered by an entry for immediate transportation, and with a country of origin of China, and a Harmonized Tariff Schedule (HTS) classification covered by Annex A to the FRN, such entries shall be subject to the duty rates in effect when the immediate transportation entry was accepted at the port of original importation, pursuant to 19 CFR 141.69 (b), which states:

Merchandise which is not subject to a quantitative or tariff-rate quota and which is covered by an entry for immediate transportation made at the port of original importation, if entered for consumption at the port designated by the consignee or his agent in such transportation entry without having been taken into custody by the port director for general order under section 490, Tariff Act of 1930, as amended (19 U.S.C. 1490), shall be subject to the rates in effect when the immediate transportation entry was accepted at the port of original importation.

Q: How much has the U.S. government collected from the various trade remedy measures?

U.S. CBP assesses and collects duties on U.S. imports, including the additional duties imposed as a result of the president’s tariff actions. As of April 27, 2022 U.S. CBP has reported these duty assessments.

Q: Are products of Hong Kong subject to the additional Section 301 duties against China?

No. Additional duties imposed by the Section 301 remedy only apply to articles that are products of the People’s Republic of China (ISO Country Code CN). Imported goods that are legitimately the product of Hong Kong (HK) or Macau (MO) are not subject to the additional Section 301 duties. Please note that Section 301 duties are based on country of origin, not country of export. 2

Q: What are various types of import restrictions that can be imposed by the government?

Tariffs – A tax on imports of foreign goods paid by the importer. Ad valorem tariffs are assessed as a percentage of the value of the import (e.g., a tax of 25% on the value of an imported truck). Specific tariffs are assessed at a fixed rate based on the quantity of the import (e.g. 7.7% per kilogram of imported almonds), and are most common on agricultural imports.

Quotas – A restriction on the total allowable amount of imports based either on the quantity or value of goods imported. Quotas are in place on a limited number of U.S. imports, mostly agricultural commodities, in part due to past trade agreements to remove and prohibit them.

Tariff-Rate Quota (TRQ) –TRQs involve a two-tiered tariff scheme in which the tariff rate changes depending on the level of imports. Below a specific value or quantity of imports, a lower tariff rate applies. Once this threshold is reached, all additional imports face a higher, sometimes prohibitive, tariff rate.

Q: Does U.S. Customs and Border Protection (CBP) pay interest when refunding duties previously paid?

Yes! CBP does pay interest from the date the original money was deposited. The current interest rates are published in the Federal Register on a quarterly basis. Review the most recent Federal Register Notice for the latest rates.

Q: How do I find out if my product is subject to Section 301 tariff duties?

Enter the product’s harmonized tariff schedule (HTS) classification on the USTR website. In addition, you can refer to our U.S. tariff search tool to quickly search both the Section 301 tariff lists, but also identify if there are any exclusion opportunities. Talk to your Trusted Advisor® expert at C.H. Robinson to learn more.

Q: Do Section 301 (China) duties still apply if I ship goods to another country, such as Canada or Mexico, and have them packaged there before entering the commerce of the United States?

Yes. Basic changes/processes such as packaging, cleaning, and sorting would not change the country of origin to be declared in most cases. The origin would still be China and therefore the Section 301 duties would still apply.

Q: Are Section 301 duties eligible for drawback?

As noted in CSMS Message 18-000419, Section 301 duties are eligible for duty drawback. Drawback is the refund of certain duties, internal revenue taxes, and certain fees collected upon the importation of goods. Such refunds are only allowed upon the exportation or destruction of goods under U.S. Customs and Border Protection supervision.

Q: Have U.S. trading partners taken or proposed retaliatory trade actions?

Yes. Some United States’ trading partners subject to the additional United States import restrictions have taken or announced proposed retaliations against each of the three United States actions. The International Trade Administration published an article regarding retaliatory tariffs implemented by United States’ trading partners.

Q: What is a tariff?

Tariffs or duties are taxes assessed on imports of foreign goods, paid by the importer to the U.S. government, and collected by U.S. Customs and Border Protection (CBP). Current U.S. tariff rates may be found in the Harmonized Tariff Schedule (HTS) maintained by the U.S. International Trade Commission (ITC). The U.S. Constitution grants Congress the sole authority to regulate foreign commerce and therefore impose tariffs, but, through various trade laws, Congress has delegated authority to the president to modify tariffs and other trade restrictions under certain circumstances. 1

References

  1. Congressional Research Service – Trump Administration Tariff Actions (Sections 201, 232, and 301): FAQs
  2. Section 301 Trade Remedies Frequently Asked Questions
  3. Congressional Research Service - Section 301: Tariff Exclusions on U.S. Imports from China

Get trade & tariff solutions from C.H. Robinson

Let our experts guide you through the current landscape. Start with a free consultation.

Resources

All content and materials discussed herein are for informational purposes only and do not constitute legal advice. You should always independently check the related Code of Federal Regulations (CFR) and, if needed, consult with the applicable Federal Agency (e.g. CBP, USTR) and/or external counsel where any question or doubt exists. Information on this site is the property of C.H. Robinson. Any transmission or use without C.H. Robinson’s permission and approval is not allowed or authorized.