The Office of the United States Trade Representative (“USTR”) has recently initiated a statutory four-year review of the two actions taken under Section 301 of the Trade Act of 1974, as amended, in the investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.  The two specific actions under review are the imposition of additional tariffs under Section 301 on products on List 1(covering $34 billion in imports as of 2018) and List 2 ($16 million in imports), which were subsequently modified by the imposition of List 3 and List 4A.

This “review of necessity” is being conducted pursuant to 19 U.S.C. § 2417(c), which obligates USTR to revoke any action taken under Section 301 after four years unless parties that benefit from that action requests its continuation.  If continuation is requested, USTR is then required to evaluate the “effectiveness in achieving the objectives of Section 301” and the “effects of such actions on the United States economy, including consumers” for any action taken under Section 301.

Continue Reading USTR Starts “Review of Necessity” of Section 301 Tariffs

On April 18, 2022, the Office of Management and Budget (OMB) published new guidance related to the implementation of the Build America, Buy America (BABA) provisions in the Infrastructure Investment and Jobs Act (IIJA). The BABA provisions, which passed in November 2021, require that any infrastructure projects receiving federal assistance – not only those infrastructure projects funded by the IIJA – must use iron, steel, manufactured products, and construction materials that are produced in the US. The new guidance describes how federal executive departments and agencies should implement the “Buy America” preference for federally-financed infrastructure projects and a “transparent process to waive”  the preference, when necessary.  Although the OMB guidance reflects an “initial” approach to implementation, and additional guidance may follow, there are several important takeaways for companies interested in pursuing or currently performing federally-funded infrastructure projects. Continue Reading New “Buy America” Guidance for Infrastructure Projects Released

Following Russia’s military invasion of Ukraine on February 24, 2022, the United States and other major global economies have taken a range of actions to impose economic costs on Russia and Russian interests.  These actions initially consisted of economic sanctions targeting Russian companies and individuals, but have been expanded to include trade in goods.

On March 11, 2022, the G7 (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States), as well as the European Union, issued a statement announcing their intention to impose additional economic costs on Russia in response to its military invasion of Ukraine, including with respect to trade in goods.  The joint statement included a range of commitments aimed at isolating Russia from the world’s major economies and global financial institutions, including revoking Russia’s “Most Favored Nation” (MFN) status, which affords Russian imports access to favorable tariff rates among World Trade Organization (WTO) members, and imposing additional restrictions on exports and imports of “key goods and technologies” to Russia.

As discussed below, the United States, the European Union, and the United Kingdom have each taken steps to effectuate the G7 statement.  In addition to revoking Russia’s MFN status, thereby increasing the cost of Russian imports generally, these jurisdictions have all imposed certain product-specific restrictions on the importation and/or exportation of specific goods from and/or to Russia.  In certain instances, these measures have also been extended to cover trade with Russia’s ally Belarus.

  Continue Reading Major Global Economies Take Aim at Trade with Russia Following Military Invasion of Ukraine

In October 2021, President Biden announced the United States’ intention to pursue an “Indo-Pacific Economic Framework” (IPEF) as a means of strengthening U.S. ties in the Asian region.  Substantive discussions on the IPEF have not yet begun, and indeed, there has not yet been an announcement how the negotiations will be conducted or which nations will be involved.  Nevertheless, enough about this proposed framework of agreements has been announced that companies in the region can begin to prepare for the process.  This article will discuss what is known about the IPEF, why the current administration is taking this approach, and how countries in the Asian region may be affected by this new agreement.

By way of background, in February 2016, after years of negotiations, the Trans-Pacific Partnership (TPP) was signed.  The TPP covered 12 countries, including the United States, and was described as a high-standard “21st Century” trade agreement.  However, one of then-President Trump’s first actions in office was to withdraw the United States from the TPP.  The remaining TPP countries renegotiated the agreement without the United States (essentially removing certain elements of the agreement the United States alone had backed), and ultimately entered into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).  Since President Biden’s inauguration in January 2021, pressure has been building for the United States to reengage with Asia on economic and commercial matters.  The IPEF is the United States’ current policy response.

Continue Reading The Indo-Pacific Economic Framework: How the United States Intends to Re-Engage with Asia on Trade

Following the invasion of Ukraine, the United States government has imposed numerous economic sanctions and export controls affecting trade with Russia.  In order to stay up to date on all sanctions-related matters, visit Steptoe’s “Sanctions Against Russia: Implications for Business and International Trade” resource page.

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It is generally known that EU anti-dumping and anti-subsidy measures are usually imposed for a period of five years, and that they can be (and usually are) extended for further five-year periods further to expiry review investigations. Similarly, operators facing trade defense measures will typically be aware that the repeal or the reduction of the duties can be obtained with interim review investigations or duty refund procedures. It is instead far less known that there is another, temporary, and, until very recently, long unexploited solution available to EU importers and end-users to ease the pressure of EU trade defense measures, namely the suspension thereof. This tool can be particularly relevant to EU importers and end-users of goods that are currently suffering from supply chain disruptions.

Continue Reading Duty Suspension: An Interim Relief from EU Trade Defense Measures

On February 10, 2022, the Department of Commerce (“the Department”) published a Federal Register notice requesting public comments on the process for seeking exclusions from the Section 232 steel and aluminum tariffs.  Comments are due on March 28, 2022.

The Department is soliciting comments with regard to two areas in particular.  First, as directed by the recent Presidential Proclamation regarding the U.S.-EU steel deal, the Department has requested feedback regarding the responsiveness of the exclusion process to “market demand and enhanced consultation with U.S. firms and labor organizations.”  Second, the Department noted that it would also be open to receiving comments on specific aspects of the Section 232 exclusion process, including potential changes regarding the information being requested, how the process proceeds, the standard of review, General Approved Exclusions (“GAEs”), and the transparency of the system.  The notice lists the following issues and possible changes as areas for comment as well:

  • How to reduce the volume of submission errors and rejected filings in the Section 232 Exclusions Portal
  • How to address the time for processing of exclusion requests, including but not limited to reducing length or type of attachments
  • Requiring public summaries of any confidential business information in exclusion requests and objections, similar to the existing requirement for rebuttal and surrebuttals
  • Requiring public disclosure of delivery times on the Exclusion Request and Objection Forms
  • Requiring recent (i.e., from the last quarter or 90 days) evidence supporting claims made in a Request or Objection
  • Streamlining the online forms or otherwise reducing administrative burden; and
  • Assessing the GAEs criteria and identification of specific products

For companies that have been using the Section 232 exclusion process, this is an excellent opportunity to raise any issues or problems that have been encountered.  In addition, although not mentioned in the request, this could also be an opportunity for companies to comment on the extended exclusions that were issued as part of the U.S.-EU agreement, since the Department did not provide the public any opportunity to address how it intended to manage that process.

On December 23, 2021, and following strong bipartisan support in Congress, President Biden signed the Uyghur Forced Labor Prevention Act (“UFLPA” or “Act”) into law.  P.L. 117-78 (2021).  The UFLPA builds on previous congressional and executive branch actions aimed at responding to allegations of forced labor and other human rights concerns in China’s Xinjiang Uyghur Autonomous Region (“XUAR”).  In particular, the UFLPA introduces a rebuttal presumption that “any goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in” the XUAR were made with forced labor and are therefore ineligible for entry into the United States.  In addition, the UFLPA details Congressional expectations for a whole of government enforcement strategy with respect to allegations of XUAR-related forced labor and expands economic sanctions introduced under the Uyghur Human Rights Policy Act of 2020 to cover “{s}erious human rights abuses in connection with forced labor” in the XUAR.

In recognition of the compliance challenges related to the above-described rebuttable presumption, the Forced Labor Enforcement Task Force (“FLETF”) is soliciting comments on how best to ensure that “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China are not imported into the United States.”  These comments are due no later than March 10, 2022.  As discussed further below, importers should consider submitting comments to the FLETF concerning this set of issues, which will ultimately inform the enforcement strategy employed by U.S. Customs and Border Protection (“CBP”) at the border.  Additionally, importers should begin top-to-bottom reviews of their supply chains to ensure compliance with the newly-introduced rebuttable presumption prior to its implementation in June of this year.

Continue Reading Understanding the Uyghur Forced Labor Prevention Act and What Comes Next

On February 8, 2022, Auxin Solar Inc. (“Auxin”) filed a request that the U.S. Department of Commerce (“the Department”) determine whether the antidumping duty and countervailing duty (“AD/CVD”) orders on crystalline silicon photovoltaic (“CSPV”) cells and modules, i.e., solar cells and panels, from China are being circumvented.  Auxin alleges that certain Chinese CSPV producers are circumventing these AD/CVD orders by performing most of the manufacturing for CSPV cells and modules in China, and then completing them in Southeast Asia.  These allegations are similar to those in a petition that was filed in September 2021 by a coalition called the American Solar Manufacturers Against Chinese Circumvention (“A-SMACC”).  The Department ultimately rejected A-SMACC’s request because the coalition refused to disclose the names of its members publicly.

Although Auxin’s request is similar to the prior petition in many respects, there are a couple key differences.  Auxin has alleged that circumvention is occurring in Cambodia, Malaysia, Vietnam, and Thailand; the prior request did not include Cambodia.  More importantly, A-SMACC only asked for anticircumvention inquiries into certain companies, whereas Auxin is requesting that the Department conduct a country-wide circumvention inquiry into each of the four subject countries.  If the Department agrees, this may mean that all imports of CPSV cells and modules from these four countries will be presumed to be subject to the China CSPV AD/CVD orders. Normally, when the Department imposes such a presumption, it will also design a certification process that will allow U.S. importers to demonstrate that merchandise coming into the U.S. is not circumventing the order, and thus not subject to AD/CVD duties.

The Department will have until March 10, 2022 to decide whether or not to initiate a circumvention inquiry.  It can extend this deadline by 15 days if necessary.  If an inquiry is initiated, under new regulations that were issued last year, the Department must issue its final determination within a year from the date of initiation.

In 2021, the United Kingdom (UK) exited the EU’s legal regime to become an independent entity for trade purposes – given this, the year witnessed the operation of the Trade and Cooperation Agreement (TCA) which governs the relationship between the UK and the European Union (EU), the negotiation of at least two other free trade agreements (FTAs) ( the UK-Australia FTA and the UK-New Zealand FTA), an application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) along with the establishment of the Trade Remedies Authority (TRA) and the issuance of its first decisions.  The present note summarises these key developments (and more) in UK trade over the past year.

Continue Reading UK Trade: A Summary of Developments in 2021