Recent Trade & Tariff Perspectives

August 31, 2022  |  Anahi Czeszewski  Product Development Manager

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The Latest Developments on the Customs and Trade Front

As we approach the end of the month, it’s time to reflect on the numerous customs and trade developments. From the upcoming changes to customs user fees to the recent commencement of trade negotiations between the United States and Taiwan—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.

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Upcoming changes to customs user fees

Effective October 1, 2022, U.S. Customs & Border Protection (CBP) will adjust certain customs user fees and corresponding limitations. The 18.629% increase comes as a result of CBP’s annual determination as to whether the fees and limitations must be adjusted to reflect inflation.

As outlined in the General Notice, some of the fees that will be changing include:

  • Merchandise Processing Fee (MPF): For formal entries, the minimum will change from $27.75 to $29.66, the maximum will change from $538.40 to $575.35. The ad valorem rate of 0.3464% will not change.
  • Informal Entry/Release Fee: Automated and not prepared by CBP personnel (class code 311a) will change from $2.18 to $2.37.
  • Customs Broker Permit User Fee: Will change to $163.71

Ensure you analyze your historical import data to understand the impact these changes will have on your customs landed cost and overall bottom line.

New Automated Commercial Environment (ACE) Portal report available soon

Beginning August 29, 2022, CBP will make available a new report in the ACE Portal, allowing ACE account users to electronically view and track any outstanding refund statuses and history for all refunds processed after the deployment date. Navigating through duty refund status updates can be quite cumbersome—especially those refunds associated with the recently reinstated Section 301 China duty exclusions that have been retroactively reinstated to October 12, 2021. This new report will certainly be very beneficial for the trade community in keeping a close watch on these duty refunds, which we know can be significant for many companies.

Learn how the ACE Portal can improve your overall trade compliance program today.

Warning from the Consumer Product Safety Commission (CPSC)—higher penalties for violations

In an effort to more robustly enforce laws surrounding timely reporting of CPSC product defects, the agency recently made clear it will be “more aggressive in the future.” Furthermore, importers, manufacturers, retailers, and others in the industry have been warned by the agency—significant civil and potentially criminal penalties have been put on the table for parties who do not meet their obligation and immediately report any product defects as soon as discovered.

As a U.S. company has recently been issued a $7.5 million civil penalty for such violations, if your company has product governed by CPSC, now is the time to ensure CPSC compliance is included within your overarching compliance program.

Higher export compliance penalties—a mechanism to heighten enforcement efforts

The Bureau of Industry and Security (BIS) is urging companies to implement robust and effective export compliance programs proactively, as failure to do so can prove to be costly—not just from a monetary standpoint, but also from a reputation standpoint. In order to send a powerful message, the BIS affirmed it will not hesitate to issue hefty monetary penalties for export violations. Additionally, potential denial of export privileges may be another consideration.

Furthermore, the BIS recently began to make administrative charging letters public as soon as they are filed, rather than after the matter is resolved (which can be a yearlong journey). This latest change can expose many noncompliant companies and encourage others to “modify their own behavior to prevent a similar outcome,” according to the BIS.

Trade talks between the United States and Taiwan

This month, the United States and Taiwan agreed to commence trade negotiations on the U.S.–Taiwan Initiative on 21st Century Trade, which are expected to take place early this fall. The trade areas to be addressed—as per the negotiating mandate—are as follows:

  • Trade facilitation
  • Good regulatory practices
  • Strong anti-corruption standards
  • Supporting and enhancing small- and medium-sized enterprise (SME) trade
  • Deepening agriculture trade
  • Removing discriminatory barriers to trade
  • Digital trade
  • Robust labor and environment standards
  • Addressing distortive practices of state-owned enterprises and non-market policies and practices

According to Deputy United States Trade Representative Sarah Bianchi, “We plan to pursue an ambitious schedule for achieving high-standard commitments and meaningful outcomes covering the eleven trade areas in the negotiating mandate that will help build a fairer, more prosperous, and resilient 21st century economy.”

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.

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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.

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