October 2017

Winter May Be Coming, But Trade Stays Hot

Summer officially ended this past month, but the temperature in U.S. trade discussions shows no signs of abating. In addition to the recent rancor during NAFTA renegotiation talks, a 220% tariff has been added to Bombardier aircraft from Canada, like the regional jet above on final approach into DC’s Reagan National Airport. The announcement could more than triple the price of aircraft scheduled to be delivered to Delta next year.

Top Story - CBP Releases New In-Bond Regulations For FTZs

After more than five years, U.S. Customs and Border Protection finally published the new in-bond regulations it had announced in 2012. FTZs and other importers have just 60 days to adapt to the new rules, or at least demonstrate significant progress in that direction to CBP. Significant changes include elimination of the paper form 7512, all transportation modes (except barge) are subject to a 30-day time limit for completion of in-bond moves, and quantities must now be reported in the smallest external packaging unit. Contact us here for a synopsis of the changes that take effect on November 27, 2017.

Commerce Secretary Continues Tough Talk on Chinese Trade

This past week Commerce Secretary Wilbur Ross called for a dramatic shift in the U.S. trade relationship with China. “We do need major change, and I hope and I believe that we’ve made that clear to the Chinese government, because the relationship is too lopsided at present,” Secretary Ross said in a media briefing after a visit to Beijing, where he met with Premier Li Keqiang and other finance and economic officials.

Tension between the United States and China has mounted in recent months. In a rare move, the Trump administration this month blocked a China-backed investor from buying Lattice Semiconductor, an American company, citing national security concerns. And the President has criticized China, one of North Korea’s main economic partners, for failing to do more to restrain North Korea’s nuclear ambitions.

During his meetings with officials in Beijing, Secretary Ross said he raised concerns about the imbalance of trade and investment relations, the need to protect intellectual property and lower tariffs.

NAFTA Negotiations Getting Ugly, Punitive Tariffs Begin

While President Trump has reserved his harshest words on trade for Mexico and China, Canada, one of America’s closest allies, has emerged as a major pressure point on trade, with the countries’ leaders trading barbs over lumber, dairy products, airplanes, and even magazine paper.

In the latest move, the Trump administration imposed a huge tariff on a new aircraft made by Montreal’s Bombardier to compensate for what it deemed unfair subsidies by Canadian governments.

The sheer volume of trade with Canada makes it an easy target for actions against individual companies or industries. And the economy’s relatively small size, along with its economic and military dependence on the United States, gives Canada little strength for punching back.

The United States has imposed duties on softwood lumber, one of Canada’s most iconic exports, while weighing measures that would clamp down on Canadian exports of steel, aluminum and solar panels.For Bombardier, the decision to impose tariffs of more than 200 percent on the CSeries aircraft creates huge uncertainty for a company that was betting on the product to improve its fortunes.

The duties could be increased or ultimately eliminated in a series of rulings in the coming months. But they go into force immediately, tripling the jet’s price in the United States and most likely chilling future sales in the market it was meant to serve.

The Bombardier ruling heightened tensions at the NAFTA renegotiation talks. Even before the decision, Canadian officials appeared frustrated by American negotiators’ failure to put forward specific text on some of the president’s proposals.

USTR Robert Lighthizer said that the United States had discussed all of its goals with Canada and Mexico and was preparing in the next round to propose specific wording on more difficult topics, like requiring more goods to be made in the United States.

214 Transfer to ACE Delayed at Last Minute

One of the most important forms to FTZ operators, the e214 admissions document, was finally slated to be moved to ACE in the middle of last month. Just before the September 16th planned rollout date, Customs announced that the move of admissions functionality from ACS to ACE would be postponed until December 9th.

U.S. Foreign-Trade Zones Board Activity

Ackerman North America LLC/dba Amann USA submitted an application to operate its .07 acre Broomfield, Colorado facility as a subzone of FTZ 123 (more)

McFarland Cascade Holdings, Inc./Stella-Jones Corp. received approval for export-only production activity of treaded Canadian softwood lumber, plywood, agriculture posts, and landscape timbers within Subzone 86H in Tacoma, Washington (more)

Bell Sports, Inc. received approval for production of sports equipment within Subzone 114F in Rantoul, Illinois (more)

Hans-Mill Corp. received approval for production of household trash cans and plastic storage totes within Site #1 of FTZ 39 in Dallas, Texas (more)

Mercedes Benz USA, LLC received approval for accessorizing automobiles within Site #2 of FTZ 144 in Brunswick, Georgia, subject to a restriction that carpets of man-made fibers would be admitted to the FTZ in privileged foreign status (more)

Mercedes Benz USA, LLC received approval for accessorizing automobiles within Site #41 of FTZ 50 in Long Beach, California, subject to a restriction that carpets of man-made fibers would be admitted to the FTZ in privileged foreign status (more)

Mercedes Benz USA, LLC received approval for accessorizing automobiles within Site #6 of FTZ 74 in Baltimore, Maryland, subject to a restriction that carpets of man-made fibers would be admitted to the FTZ in privileged foreign status (more)

Valeo North America, Inc. submitted a notification of proposed production activity for automotive clutch and compressor assemblies and applied for subzone designation of its 12 acre Winchester, Kentucky facility under FTZ 47 (more)

Lockheed Martin Corp., Space Systems Co. submitted an application to operate their 86.35 acre Littleton, Colorado facilities as a subzone of FTZ 123 (more)

Lam Research Corp. received approval to expand Subzone 18F in Fremont and Livermore, California (more)

Mitsubishi Chemical Carbon Fiber and Composites, Inc. received approval to expand Subzone 143D in Sacramento, California (more)

BGM America, Inc. received approval to operate their Marion, South Carolina facility as Subzone 127C (more)

LT Autos, LLC, received approval to operate their Ponce, Puerto Rico facility as Subzone 163J (more)

Cummins, Inc. submitted a notification of proposed production activity for production of diesel and gas engines within Subzone 23D in Lakewood and Jamestown, New York (more)

Plaza Warehousing and Realty Corp. submitted an application to operate their 15.5 acre Caguas, Puerto Rico facility as a subzone of FTZ 61 (more)

Nisshinbo Automotive Manufacturing, Inc. submitted a notification of proposed production activity for automotive brake linings, pads, and disc pads assembly and production within Site 33 of FTZ 26 in Covington, Georgia (more)

Estee Lauder Inc. submitted a notification of proposed production activity for skin care, fragrance, and cosmetic products for a new site within FTZ 35 in Bristol and Trevose, Pennsylvania (more)

Gulfstream Aerospace Corp. submitted an application to operate their 20.2 acre Dallas, Texas facility as a subzone of FTZ 168 (more)

Mead Johnson and Co., LLC, d/b/a Mead Johnson Nutritional received approval of production activity for infant formula and nutritional products within Subzone 43B in Zeeland, Michigan (more)

MSD International GMBH (Puerto Rico Branch), LLC received approval of production activity for pharmaceuticals within Subzone 7G in Las Piedras, Puerto Rico (more)

Ekornes Inc. submitted an application to operate their 2.25 acre Somerset, New Jersey facility as a subzone of FTZ 44 (more)

voestalpine Texas, LLC submitted a notification of proposed production activity for an additional component of hot briquetted iron within Subzone 122T in Portland, Texas (more)

Hitachi Automotive Systems Americas, Inc., received approval to expand Subzone 29F in Berea, Kentucky (more)

Pinellas County, Florida received approval to expand and reorganize FTZ 193 under the Alternative Site Framework (more)

DNP Imagingcomm America Corp. received approval of production activity for coatings and lamination on semi-completed coated paper within Subzone 57C in Concord, North Carolina, subject to a five-year time limit on certain inputs (more)