On August 6, President Trump issued an Executive Order (“EO”) (“Addressing Threats to the United States by the Government of the Russian Federation”) invoking his authority under the International Emergency Economic Powers Act (“IEEPA”) to impose a tariff of 25% on most products imported from India, effective August 27, in
Continue Reading Trump Administration Imposes Secondary Tariffs on India
Status of Section 232 Actions by the Trump Administration
Since taking office in January, President Trump has taken a number of actions under Section 232 of the Trade Expansion Act of 1962 (“Section 232”), a statute that authorizes the President to “adjust” imports—including through application of tariffs, quotas, tariff rate quotas, and license fees—where the Department of Commerce (“Commerce”)
Continue Reading Status of Section 232 Actions by the Trump AdministrationUSTR Seeks Public Comment on Unfair or Non-Reciprocal Trade Practices
On February 20, 2025, the Office of the U.S. Trade Representative (“USTR”) announced that it is seeking public comments on any unfair trade practices and non-reciprocal trade arrangements implemented by foreign trading partners. The comment period is currently open and the deadline for submitting comments is March 11, 2025.
According to the Federal Register notice, comments can be submitted through a portal accessible at https://comments.ustr.gov/s/, under docket number USTR-2025-0001. USTR will accept comments from any interested party, including businesses, individuals, and trade associations, among others. Interested parties are able to include business confidential information in their submissions, which will not appear in the public version of their comments.
USTR’s announcement also stated that the public comment process is not the only opportunity to provide information to the agency on these issues, and that USTR “welcomes ongoing engagement with and information from any interested party.”
This comment period offers a new opportunity for U.S. exporters to seek the Administration’s potential support in eliminating foreign market access barriers. If you are interested in submitting comments to USTR as part of this process, Covington can assist in the preparation and transmission of these comments. We would also be happy to assist in crafting a broader strategy for engaging USTR and other relevant agencies on these or other trade-related issues.
Background
USTR’s launch of this public comment process follows the issuance of the “America First Trade Policy” memorandum by President Trump on his first day in office, which directed USTR to lead a review of unfair foreign trade practices and to recommend appropriate remedies. USTR also linked the comment process to President Trump’s “Reciprocal Trade and Tariffs” memorandum issued on February 13, which directed USTR and the Commerce Department to investigate “the harm to the United States from any non-reciprocal trade arrangements adopted by any trading partners” and to recommend actions in response. Covington’s alert on this memorandum is available here.
Scope of Requested Comments
USTR has invited comments on a country-by-country basis (or also on an economy-wide basis in the case of the European Union) regarding (i) “any unfair trade practice by a foreign country or economy”; or (ii) “any non-reciprocal trade arrangements.” USTR has defined unfair trade practices broadly, to include “policies, measures, or barriers that undermine or harm U.S. production, or exports, or a failure by a country to take action to address a non-market policy or practice in a way which harms the United States.” USTR has also requested that comments quantify the harm caused by such practices—ideally with a corresponding dollar amount—and to explain the underlying methodology used to calculate that figure.Continue Reading USTR Seeks Public Comment on Unfair or Non-Reciprocal Trade Practices
Trump Administration Imposes Tariffs on Imports from Canada, Mexico, and China
On February 1, President Trump issued three executive orders (“EOs”) imposing broad tariffs on U.S. imports from Canada, Mexico, and China, initially to be effective on February 4. Invoking Presidential authority under the International Emergency Economic Powers Act (“IEEPA”), the EOs expand the national emergency declared by
Continue Reading Trump Administration Imposes Tariffs on Imports from Canada, Mexico, and ChinaCPSC Revises Requirements for Certificates of Compliance
On January 8, 2025, the Consumer Product Safety Commission (“CPSC”) published in the Federal Register a Final Rule that significantly changes the requirements for filing certificates of compliance for imported products under the Consumer Product Safety Act (“CPSA”). The publication of the Final Rule followed the CPSC’s vote to approve the Final Rule on December 18, 2024.
The Final Rule is intended to provide the CPSC and Customs and Border Protection (“CBP”) with significantly more information about imported products, which will likely enhance enforcement against noncompliant products. Companies should take proactive measures to ensure that all imported products comply with the CPSA. They should also prepare for increased scrutiny of products upon import, which may result in delays and potential seizures of products, and ensure that they have processes in place for complying with all aspects of the Final Rule.
The Final Rule makes two major changes to existing CPSC requirements for filing certificates of compliance, which will take effect on July 8, 2026 (except that for products entering from a foreign trade zone for consumption or warehousing, the rule will take effect on January 8, 2027).
First, the Final Rule requires that for all imported products subject to a mandatory safety standard under the CPSA, importers must electronically file (“eFile”) the requisite certificate of compliance at the time of entry with Customs and Border Protection (“CBP”), which will then share the certificate with CPSC. Notably, products claiming a de minimis duty exemption under 19 U.S.C. § 1321 (“Section 321”)—i.e., products valued at less than $800—are also subject to this eFiling requirement. By requiring eFiling of certificates of compliance, including for de minimis products, the Final Rule is intended to improve the CPSC and CBP’s ability to collect data on imported products and bolster their monitoring and enforcement capabilities.
Second, the Final Rule newly defines the term “importer” in the CPSC regulations to be synonymous with the importer of record (“IOR”). This change places the responsibility for filing certificates of compliance for most imported products on the IOR. However, if the IOR is a customs broker, the broker is responsible for filing the certificate but can designate the “owner, purchaser, or consignee” as legally responsible for complying with the CPSC’s testing and certification requirements, including for the accuracy and validity of the data submitted on the certificate.
For mail and de minimis shipments, which do not have an IOR, the Final Rule clarifies that the “importer” can be an owner, purchaser, consignee, or authorized customs broker. Similar to products that do not fall under the de minimis exemption, the customs broker may file the certificate for a de minimis shipment but identify the owner, purchaser, or consignee as the party responsible for compliance. Continue Reading CPSC Revises Requirements for Certificates of Compliance
Section 301 Tariffs and Proceedings: Recent and Potential Developments
Alert December 19, 2024
As discussed in our prior client alert, President-elect Trump’s second term is expected to bring important changes to U.S. trade policy, including with respect to U.S. tariffs. Among the tools Trump may use to modify existing U.S. tariffs is Section 301 of the Trade Act of 1974 (“Section 301”), which provided the vehicle for imposition of tariffs against China under the first Trump administration. More recently, the Biden administration has initiated new proceedings under Section 301, while also modifying existing Section 301 tariffs against China. This alert provides an overview of Section 301, explores how Section 301 has been used by recent administrations to increase tariffs on imports from China, and surveys other Section 301 actions, including currently pending investigations. This alert also examines how a second Trump administration could reactivate or modify Section 301 tariffs that were previously announced, but have been suspended or terminated.
Overview of Section 301
Section 301 is an investigative tool under U.S. trade law that allows the Office of the U.S. Trade Representative (“USTR”) to pursue unilateral trade retaliation against countries that impose unfair trade barriers against the United States. USTR may launch Section 301 investigations in response to the filing of a petition submitted by an “interested party,” or upon USTR’s own initiative. Once a Section 301 investigation is launched, the statutory deadline for completion is typically between 12 and 18 months. Under the first Trump administration, USTR often did not use the full period provided under the statute, instead completing certain investigations several months before the statutory deadline.
As part of the investigative process, USTR must request consultations with the foreign government whose conduct is at issue, and it will generally also solicit public comments and hold a hearing as part of its investigation. At the end of the investigation, USTR is authorized to impose duties or other trade restrictions where it has determined:
- that the rights of the United States under any trade agreement are being denied;
- that an act, policy, or practice of a foreign country violates, is inconsistent with, or otherwise denies the United States the benefits of any trade agreement; or
- that an act, policy, or practice of a foreign country is unjustifiable and burdens or restricts U.S. commerce.
Once imposed, Section 301 tariffs must be terminated after four years unless an extension is requested. As explained below, USTR under certain conditions can also modify existing Section 301 duties or reinstitute previously suspended or terminated Section 301 actions.Continue Reading Section 301 Tariffs and Proceedings: Recent and Potential Developments
Trade Policy Under a Second Trump Administration and Implications for Business
November 25, 2024, Covington Alert
The inauguration of President Trump on January 20 is expected to bring important changes to U.S. trade policy that are likely to affect companies that supply international customers, or are reliant on global supply chains. As discussed in our prior client alert, international trade is expected to be a key focus of President Trump, who has repeatedly expressed a preference for using tariffs as a policy tool to create perceived leverage for dealmaking with international partners on both economic and non-economic issues. Recent announcements by the Trump transition team regarding cabinet and staff appointments reinforce the view that trade policy under a second Trump administration could involve significant unilateral U.S. action, including the imposition of substantial new tariffs and a hawkish stance toward China. These new tariffs could be implemented swiftly after Trump takes office, or could alternatively be subject to more extensive investigative and reporting procedures, depending on the legal authority invoked. New tariff measures, as well as other trade actions Trump has proposed, could lead to retaliatory responses by U.S. trading partners, including key U.S. allies. This alert explores how trade policy may be implemented by a second Trump administration, and considers how companies may prepare for and mitigate the risks associated with these developments.
Cabinet Nominations and Other Economic Appointees
In recent weeks, Trump has announced several cabinet and staff appointments for his second administration, including individuals responsible for implementing trade policy. Key among them is Howard Lutnick, chairman and CEO of a Wall Street investment firm and co-chair of Trump’s transition team, whom Trump has selected to be Secretary of Commerce. Echoing Trump’s own views, Lutnick has been a strong advocate for using tariffs as an industrial policy tool and bargaining chip to rebalance U.S. trade, though he has suggested tariff measures under a second Trump administration may be more “targeted” than the universal 10 to 20 percent tariffs proposed by Trump during his campaign. In announcing Lutnick’s forthcoming nomination, Trump noted Lutnick would lead the administration’s “Tariff and Trade agenda,” and that he would have direct responsibility over the Office of the United States Trade Representative (“USTR”). As USTR is a separate agency established by Congress within the Executive Office of the President to lead on trade issues, it is uncertain if the announcement was referring to informal oversight over USTR or a formal restructuring of the agency. Should Trump seek to consolidate USTR within or under the Commerce Department, he may face opposition from Congress, whose approval would be required for such a reorganization. Continue Reading Trade Policy Under a Second Trump Administration and Implications for Business
The Impact of the U.S. Elections on Trade and International Supply Chains
October 28, 2024, Covington Alert
The upcoming U.S. presidential election on November 5 will have important implications for U.S. trade policy that are likely to affect companies reliant on international supply chains. There are important differences in how former President Donald Trump and Vice President Kamala Harris approach the use of trade tools to advance U.S. policies and priorities, including whether such tools should be deployed unilaterally, or as part of a collective action with U.S. allies.
For instance, a victory by Harris will likely signal continuity in the current approach of the Biden administration, in which trade has not been a central policy priority, but has instead taken a backseat to—and been used as a tool to support—other key policies on climate, technology, human rights, and industrial development. While a Harris administration is therefore unlikely to pursue new trade initiatives aimed at increased market access, a Harris administration may consider joint action with U.S. allies and likeminded trading partners, or at least be receptive to input from such partners in pursuing trade-related actions.
In contrast, trade is expected to take center stage under a second Trump administration, with unilateral action expected to be the preferred approach. Trump has repeatedly referred to tariffs as his policy tool of choice, and views tariffs as important in creating leverage for dealmaking with international partners on both economic and non-economic issues. Trump and his economic advisors also view the U.S. trade balance as an important measure of economic performance, and bilateral trade deficits are likely to face scrutiny and provoke potential action.
This alert explores certain key trade issues to be confronted by the next administration, assesses how each candidate may approach these issues differently, and considers how companies may prepare for and mitigate the risks associated with each candidate’s approach.
Divergent Approaches to U.S. Tariffs
While Congress has primary constitutional authority over tariffs and other trade policy matters, the President has broad authority to adjust tariffs and impose other import restrictions under certain statutes, without approval from Congress. The outcome of the U.S. election will determine to a great extent the importance that tariffs will play as a U.S. policy tool over the next four years.Continue Reading The Impact of the U.S. Elections on Trade and International Supply Chains
Increased Tariffs on Certain U.S. Imports from Russia Effective July 27, 2022: What Companies Need to Know
Background
As we previously reported, President Biden and Congress took steps in March 2022 to revoke Russia’s most-favored-nation (or “MFN”) trade status, known as Permanent Normal Trade Relations (“PNTR”) status under U.S. law. As a result of these actions, the Suspending Normal Trade Relations with Russia and Belarus Act (“Suspending NTR Act”) entered into force on April 8, 2022, formally revoking PNTR status for Russia and Belarus. Under the terms of the Act, imports into the United States of products from Russia and Belarus became subject to tariff rates set out in column 2 of the U.S. tariff schedule, rather than the column 1 rates that had previously applied. Column 2 tariff rates are often higher—sometimes much higher—than MFN tariff rates in column 1, and as a result of this change, tariffs on U.S. imports from Russia increased from an average of approximately three percent to 32 percent. In addition to implementing this immediate change in applicable tariff rates, the Suspending NTR Act also temporarily authorized the President, through the end of 2023, to increase even further tariffs applicable to imports from Russia and Belarus.
On June 27, pursuant to the authority granted under the Suspending NTR Act, President Biden issued Presidential Proclamation 10420, announcing that the United States would further increase tariffs applicable to certain categories of imports from Russia, worth approximately $2.3 billion annually. U.S. Customs and Border Protection (“CBP”) recently issued guidance on these tariff increases, which will apply effective July 27, 2022. This alert provides additional information on the forthcoming tariff increases, and discusses potential implications for importers of Russian goods.
Overview of July 27 Tariff Rate Increase on Certain U.S. Imports from Russia
Since revocation of PNTR status in April, products imported into the United States from Russia and Belarus have been subject to tariff rates set forth in column 2 of the U.S. tariff schedule. Under the terms of Presidential Proclamation 10420, however, duty rates of 35 percent ad valorem will apply to 570 categories of Russian products in lieu of column 2 rates, beginning July 27, 2022. These product categories have an estimated value of approximately $2.3 billion annually. The Proclamation does not impact imports from Belarus, which will remain subject to column 2 tariff rates.Continue Reading Increased Tariffs on Certain U.S. Imports from Russia Effective July 27, 2022: What Companies Need to Know
Voluntary Disclosures to CBP: What Importers Need to Know About the Changing Landscape
Importers of merchandise into the United States must use “reasonable care” in the importation process, which includes providing accurate and complete information necessary for U.S. Customs and Border Protection (“CBP”) to process and release the merchandise into the United States.[1] Importers who fail to take this obligation seriously do so at their peril, because catching importer mistakes that result in duty underpayments is an enforcement priority for CBP. If CBP determines that an importer has failed to exercise reasonable care, CBP may impose substantial civil penalties, even if an error was unintentional.[2] However, where importers discover their own import compliance errors before CBP does, they may significantly reduce their exposure to penalties by proactively and voluntarily disclosing such errors to CBP with a “prior disclosure.” This article summarizes the fundamentals of a prior disclosure, and reports on recent efforts by CBP to standardize prior disclosure practices across U.S. ports of entry.
Prior Disclosure Fundamentals
CBP encourages importers to file prior disclosures,[3] and it often makes sense for an importer to do so. The statutes, regulations and procedures that govern the importation of merchandise into the United States are complex and constantly changing, such that even the most experienced and vigilant importers make mistakes. A prior disclosure allows an importer to disclose its violations of Customs laws and regulations to CBP and pay any unpaid duties or fees owed. In exchange, the importer limits exposure to otherwise applicable penalties, by limiting the penalty to the interest owed. CBP benefits as well, receiving prompt payment of duties owed (plus interest) without using internal resources to conduct an investigation of the reported violations and enforce a penalty order. Continue Reading Voluntary Disclosures to CBP: What Importers Need to Know About the Changing Landscape