In August of last year a bipartisan group of United States Senators and one United States Representative wrote to the Government Accountability Office requesting a GAO review of the Foreign-Trade Zones Board's process for evaluating Foreign-Trade Zone applications.
They specifically requested that the GAO conduct a review of FTZ Board processes and implementation of the regulations in cases involving textile inputs. Early in December the GAO accepted the request, and the work is expected to get underway in the next few months.
The members urged the GAO to undertake the review after Coleman Inc. asked the FTZ Board for production authority using textiles in a sub-zone at its factory in Sauk Rapids, MN, which makes personal flotation devices.
The GAO decision comes while it is already in the process of reviewing the FTZ program and visiting various FTZ projects around the country. It is not yet clear whether the two investigations are related, will be combined, or will remain independent.
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CNN reported late last month that President-elect Trump's transition team is discussing a proposal to impose tariffs as high as 10% on imports. The new tariff rates could be implemented via executive action, or as part of a sweeping tax reform package pushed through Congress.
Such a move would raise up to $100 billion in new revenue and deliver on the "America First" campaign theme, but risks driving up the cost of consumer goods in the US. House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady have instead proposed a ‘border adjustment tax’ to encourage exports over imports. This sets up an immediate challenge for the incoming administration to find compromise with the Republican majority in Congress.
Business leaders are concerned the unilateral tariff increase would lead to retaliation against US industries heavily dependent on exports. China in particular has been quite vocal on the impact US companies would face there in the event tariffs were raised on goods from China.
State and local tax issues can complicate the FTZ application process in Texas, Louisiana, Kentucky, and Arizona. This is because Texas, Louisiana and Kentucky have ad valorem taxes on business inventories. These taxes are eliminated on inventory inside an active Foreign-Trade Zone, and the concurrence of impacted local officials is required before an FTZ application will be approved. A similar situation exists for real property taxes in the state of Arizona. The FTZ Board therefore takes special precautions to ensure local officials either accept the tax loss or that other arrangements have been made to ensure the revenue.
Trump transition team spokesman Jason Miller made clear last month that most US trade policy decisions would be steered by Wilbur Ross, President-elect Donald Trump’s pick for Commerce Secretary.
"Mr. Ross not only has negotiated some very good deals over his lifetime, he's also the person who worked closely with the president-elect on crafting his trade policy over the administration," Miller told reporters during a daily transition briefing. "Mr. Ross will be playing a big role in any trade particulars in this administration."
Ross made a good part of his fortune by investing in distressed steel companies that benefited from stiff import tariffs imposed by former President George W. Bush. This experience may also explain the rationale behind the Administration’s proposal to raise import tariffs— as a cover to spur investment in US manufacturing operations, at least in the short term
Late last month, President-elect Trump met with Jovita Carranza about the open position of USTR. Carranza was deputy administrator with the Small Business Administration in the George W. Bush White House, and would be the first Hispanic selection for the new Administration.
President-elect Trump has also discussed the USTR job with Robert Lighthizer, a former deputy USTR during the Reagan administration, and Dan DiMicco, former CEO of steel producer Nucor Corp
Transferring the role of top trade advisor to the Commerce Secretary could make the USTR job less attractive to potential candidates. With the Trans Pacific Partnership nixed and a free trade agreement with Europe unlikely to reach completion, the most prominent role for USTR in the Trump administration may be the negotiation of changes to NAFTA.
Black and Decker (U.S.), Inc. submitted a notification of proposed production activity for additional finished products and components for power tools within Subzone 38E in Fort Mill, South Carolina(More)
Gulf Island Shipyards, LLC received authorization of production activity, with restrictions on steel materials, for shipbuilding within FTZ 279 in Houma, Louisiana (More)
AGRU America Charleston, LLC submitted a notification of proposed production activity for HDPE pipe in Site 5 of FTZ 21 in North Charleston, South Carolina(More)
Romark Global Pharma, LLC received approval to operate their Manati, Puerto Rico facility as Subzone 7P (More)
Carrier InterAmerica Corporation received authorization of production activity for heating, ventilation, and air conditioning systems in Site 3 of FTZ 281 in Miami, Florida(More)
Wacker Polysilicon North America LLC’s request for authorization of production activity for polysilicon was not approved in FTZ 134 in Charleston, Tennessee, and a full application will be required (More)
Brake Parts Inc. submitted a notification of proposed production activity for kitting automotive parts within a new subzone of FTZ 24 in Hazleton, Pennsylvania (More)
Brake Parts Inc. submitted a notification of proposed production activity for kitting automotive parts within Site 14 of FTZ 226 in Patterson, California(More)
Volkswagen Group of America-Chattanooga Operations, LLC submitted a notification of proposed production activity for additional finished products and components for automobiles within Site 3 of FTZ 134 in Chattanooga, Tennessee (More)
Greater Kansas City Foreign Trade Zone, Inc. received approval to expand the Alternative Site Framework Service Area of FTZ 17 to include Atchison, Jefferson, and Franklin Counties, Kansas (More)
The Virginia Port Authority received approval to expand the Alternative Site Framework Service Area of FTZ 20 to include Elizabeth City, North Carolina and the Counties of Camden, Chowan, Currituck, Gates, Hertford, Pasquotank and Perquimans, North Carolina (More)
The March Joint Powers Authority received approval to expand the Alternative Site Framework Service Area of FTZ 244 to include a portion of the City of Lake Elsinore, California (More)
The Triangle J Council of Governments received approval to expand the Alternative Site Framework Service Area of FTZ 93 to include Wilson County, North Carolina (More)
Brake Parts Inc. applied to operate their 28 acre facility in Hazleton, Pennsylvania as a Subzone of FTZ 24 (More)
TopShip, LLC has applied to operate their 114.23 acre facility in Gulfport, Mississippi as a Subzone of FTZ 92 (More)
Loop LLC received approval to expand Subzone 124D to include an additional parcel in Cut Off, Louisiana (More)
Valero Refining Company received approval to expand Subzone 122J to include an additional parcel in Corpus Christi, Texas (More)
Thor Industries, Inc. has applied to expand Subzone 100D by adding 3.88 acres to Site 1 and 6.53 acres on a second site in Jackson Center, Ohio (more)
Southern Lithoplate, Inc. received authorization of production activity, with restrictions on pigments, paints, and varnishes, for aluminum printing plates within Site 10 of FTZ 189 in Grand Rapids, Michigan (More)
AxisCare Health Logistics, Inc. has applied to operate their 7.59 acre facility in Toa Baja, Puerto Rico as a Subzone of FTZ 163 (More)
Danos & Curole Marine Contractor’s, LLC has applied to operate their 367.5 acre facility in Morgan City, Louisiana as a Subzone of FTZ 124 (More)
Comments or suggestions on our publication? The editorial staff of the Foreign-Trade ‘Zine, the eMagazine of FTZ News would love to hear from you.
The FTZine Staff hopes everyone had a safe and enjoyable holiday break. The New Year will get off to a fast start as your Nation’s Capital prepares to inaugurate the 45th President of the United States in just a few weeks. Health care and tax reform have been discussed as initial priorities. As you’ll see below, there have also been proposals directly impacting the international trade community which you too will want to keep your eyes on.