CBP says most of that money has come from Section 232 steel and aluminum duties.
U.S. Customs and Border Protection has collected more than $2.5 billion in Section 201, Section 232 and Section 301 duties since those trade remedies were respectively implemented, CBP Commissioner Kevin McAleenan said Tuesday during the CBP 2018 Trade Symposium in Atlanta.
So far, CBP has collected $2 billion worth of Section 232 duties on steel and aluminum, $477 million worth of Section 301 duties on various goods from China and $263 million worth of Section 201 duties imposed on solar cells and washing machines, including washer parts, CBP Executive Director for Trade Policy and Programs John Leonard said during a session with the media at the symposium Tuesday.
Section 232 metal duties took effect for most countries on March 23, expanding to include Canada, Mexico and the EU on July 1; $34 billion worth of Section 301 duties on China started on July 6, with $16 billion more to be imposed starting Aug. 23 and another $200 billion planned; and Section 201 tariff-rate quotas (TRQs) on solar cells and modules and washing machines and washer parts started on Feb. 7.
The TRQ for washer parts has been filled since July 23, according to CBP’s most recent quota status report, released on Monday.
Leonard said CBP is looking into transshipment in the context of Section 301 duty evasion, noting that enforcing against such actions is difficult and requires vast resources.
“China is subject to the tariff,” he said. “A country like Malaysia is not — or Thailand. So what they’ll do is take the Chinese good and transship it through Malaysia, remark the goods — it might stay in a Malaysian free trade zone or port for a couple weeks — and then they ship it to America and say it’s country of origin Malaysia and avoid paying the duty. However, we know it’s country of origin China.”
Depending on the importance of the case, CBP will conduct in-country verifications as part of its enforcement activities. Yet it’s too early to definitively comment on any trends in Section 301 duty evasion, Leonard said. “But it’s something we’re prepared to have enforcement on.”
CBP conducts Enforce and Protect Act (EAPA) investigations to investigate whether goods are being transshipped to evade duties, but EAPA only applies to antidumping and countervailing duty evasion and not evasion of other duties, Leonard said.
The agency is implementing a Section 232 duty-exclusion process through the Automated Commercial Environment (ACE), whereby filers transmit a number based on an importer of record number, which shows CBP that a shipment is not subject to duty.
“It adds extra work and complexity because we have to make sure that it’s legitimate and are you the one that really has this [exclusion] letter, and we’re taking steps to do that,” Leonard said.
“We really haven’t started this in earnest yet; it’s just begun. So we’ll see how it plays out,” he added.
The Commerce Department leads the executive branch’s product-exclusion process for Section 232 duties and issues letters to applicants upon determining a product’s exemption.
McAleenan noted that, as the agency that operationally implements trade remedies, CBP intensively works to inform the White House about the potential tariff impacts, including the effects on downstream manufacturers.
“We’ve been working hard to explain how this works in terms of changing a tariff or making a tariff-rate quota, putting that in place, or establishing an absolute quota and what that means in terms of our system implementation, the timelines necessary, the communication with the trade that’s required,” he said. “We have to have that shared understanding with the policymakers about what’s going to be entailed in this.”
Tariff revenue totals over $2.5 billion
