March 2017
November 10, 2017
May 2017
November 12, 2017
Top Story – CBP Commissioner Nominated
Last week President Trump nominated Acting Deputy Commissioner Kevin K. McAleenan to lead U.S. Customs and Border Protection.
It is the first time in many years someone in active service at CBP (or even the former Customs Service) has been nominated to lead the department.
The Senate must confirm McAleenan as the new commissioner, who has been running the agency since former Commissioner Gil Kerlikowske left at the end of the Obama administration on Jan. 20.
From 2006 to 2008, McAleenan served as the area port director of Los Angeles International Airport, directing CBP’s border security operations at LAX and 17 other airport facilities in one of CBP’s largest field commands. He was promoted to acting assistant commissioner of field operations in December 2011.
Administration Position On NAFTA May Be Softening
While President Trump has threatened to withdraw from NAFTA entirely, a White House draft proposal reportedly calls for only relatively minor tweaks.
The Wall Street Journal reported last Wednesday it had reviewed a copy of the document, and described the proposed NAFTA alterations as "mostly modest changes" that would "keep some of NAFTA's most controversial provisions."
The administration is reportedly not seeking to introduce terms addressing currency policy disputes between the U.S., Mexico and Canada. The draft also doesn't target a controversial arbitration panel that essentially allows companies and investors to sidestep domestic courts in certain cases.
The draft letter, signed by the acting United States Trade Representative, Stephen Vaughn, suggests keeping much of the agreement in place, which would be a significant shift in Administration policy.
Border Adjustment Tax Stirring Strong Conservative Opposition
Much like the effort to repeal the Affordable Care Act, the border adjustment tax is dividing conservatives. Perhaps emboldened by the recent defeat of the ‘repeal and replace’ legislation, conservative groups are rallying to defeat the “border adjustment” tax proposed by Speaker Paul D. Ryan.
Opposition threatens yet another rupture with President Trump, some of whose advisers see the provision as a critical way to bring about tax reform while protecting American manufacturers.
The idea of a border adjustment tax has percolated among academic economists and in think tanks since the 1970s, as the United States has considered ways of harmonizing its tax code with countries that use value-added taxes. Central to the plan is a provision that would tax imports at a rate of 20 percent while exempting exports from taxation. In theory, this would buttress domestic manufacturing, make American products more competitive with foreign goods and encourage American companies to bring home cash they have been parking overseas.
Will Increases In Trade Enforcement Impact FTZ's?
Just last week President Trump signed two executive orders aimed at tackling concerns about trade abuses.
The first order directs the Commerce Department, under Secretary Wilbur Ross, to take the next three months to review the reasons for U.S. trade deficits and all violations of trade rules that harm U.S. workers across every trading partner.
The second order, which is tied to trade enforcement, was part of a customs bill Congress passed last year.
After taking over at Commerce, Ross said he was “horrified” to learn that billions in countervailing duties and antidumping fines had never been collected.
"The reason they have never been collected is because foreign exporters are very clever in setting up shell companies here so when the fine is levied there is no way to collect," Ross said.
Since 2001, $2.8 billion in import taxes have gone uncollected, according to Peter Navarro, director of the National Trade Council.
To remedy the problem, the government will require those firms to provide letters of credit or cash or insurance company bonding so that there is a responsible party when the fine is levied, Ross said. This additional bonding requirement may carry over to impact FTZs.
Did You Know?
More than 35 million years ago, an asteroid 5 to 8 miles in diameter, slammed into earth just south of Washington, D.C. creating the Chesapeake Bay. It left a crater about 52 miles across and 1.2 miles deep, called the Chesapeake Bay Crater. It is the largest known impact site in the United States and the sixth largest in the world. DC restaurants are famous for their Chesapeake Bay crab recipes. And when someone tells you next the crab in DC is out of this world, you’ll know its true!
U.S. Foreign-Trade Zones Board Activity
MSD International GMBH (Puerto Rico Branch) LLC, operator of Subzone 7G, submitted a notification of proposed production activity for an additional pharmaceutical product and component in Las Piedras, Puerto Rico (more)
Brake Parts Inc. received approval for automotive parts kitting within Site 14 of FTZ 226 in Patterson, California (more)
Brake Parts Inc. received approval for automotive parts kitting within Subzone 24E in Hazleton, Pennsylvania (more)
Xerox Corporation submitted a notification of proposed production activity for bulk toner and toner cartridges in Subzone 141B in Webster, New York(more)
Volkswagen Group of America—Chattanooga Operations, LLC received approval for passenger motor vehicle production in Site 3 of FTZ 134 in Chattanooga, Tennessee (more)
Premier Logistics, LLC requested subzone status for their 10 acre facility in FTZ 53 in Tulsa, Oklahoma(more)
Westlake Chemical Corporation requested the expansion of Subzone 87F to add an two additional sites totaling 1,674 acres, including several pipelines in Sulphur, Louisiana (more)
CoLinx, LLC received approval for kitting of bearing units within Sites 2, 6, 8, and 9 of FTZ 148 in Crossville, Tennessee (more)
Bristol-Myers Squibb Holdings Pharma, Ltd. submitted a notification of proposed production activity for additional pharmaceutical products and components within Subzone 7J in Manati, Puerto Rico (more)
ZF Transmissions Gray Court, LLC received approval for production of automatic transmission and powertrain subassemblies and parts, transmission shafts and cranks within Subzone 38K in Gray Court, South Carolina (more)
The Northwest Tennessee Regional Port Authority received approval to expand the ASF service area of FTZ 283 to include the Counties of Fayette, Hardeman and McNairy in West Tennessee (more)
Mead Johnson & Company, LLC dba Mead Johnson Nutrition requested the expansion of Subzone 43B to add 20.5 acres in a new Site #5 in Zeeland, Michigan (more)
Imperial County, California received approval to reorganize FTZ 257 under the Alternative Site Framework with a service area of Imperial County, California (more)
ExxonMobil Oil Corporation received approval to expand Subzone 115B to include an additional site in Jefferson County, Texas (more)
Bauer Manufacturing LLC d/b/a NEORig submitted a notification of proposed production activity for additional components of stationary oil/gas drilling rigs in Site #1 of FTZ 265 in Conroe, Texas (more)
Caribe Rx Services, Inc. requested subzone status for their 2.1 acre facility in FTZ 163 in Caguas, Puerto Rico (more)
Destilería Serrallés, Inc. requested subzone status for their 5.8 acre facility in FTZ 163 in Ponce, Puerto Rico (more)
R.Ortiz Auto Distributors, Inc. requested subzone status for their 1.8 acre facility in FTZ 163 in Caguas, Puerto Rico (more)
Brake Parts Inc. received approval for to operate their Hazleton, Pennsylvania facility as Subzone 24E (more)
Brake Parts Inc. received approval for automotive parts kitting within Subzone 176G in McHenry, Illinois (more)
TopShip, LLC received approval for to operate their Gulfport, Mississippi facility as Subzone 92F (more)
Volvo Car US Operations, Inc. received approval for to operate their Ridgeville, South Carolina facility as Subzone 21F (more)
The Athens Economic Development Corporation submitted an application to reorganize FTZ 269 under the Alternative Site Framework with a service area of the City of Athens, Texas (more)
Not The Spring Blooms We Were Expecting
A blast of arctic air swept though your nation’s capital late last month, dashing hopes for an early spring. The unexpected frost left rows of brown, wilted cherry blossoms in its wake. Trees near the Potomac River fared better, kept just warm enough by the river’s water. That saved the National Cherry Blossom Festival but further from the Tidal Basin there wasn’t much celebrating. Hopefully the temperature in DC will return to normal very soon