Trade Update: Vietnam Section 301 |
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The Trump Administration recently launched a Section 301 investigation into Vietnam over allegations of currency manipulation. The President previously used his Section 301 authority in 2018 and 2019 to hit Chinese-made goods, including footwear, with new added tariffs. The Administration has also launched 301 investigations into EU subsidies on large civil aircraft, France's digital service tax, and digital service taxes in 10 separate countries. We encourage FDRA Members to submit Comments for the Vietnam 301 process (due November 12th), and we have a template for companies to use. We will discuss the Comment process and the latest developments on Vietnam during the next FDRA Weekly Check-In Call on October 27th.
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FDRA is holding the Footwear Tariff & Customs Digital Conference (FTDC) on November 12th for key trade updates, discussions with U.S. Customs & Border Protection (CBP), and a virtual sample review with the footwear National Import Specialist. Register here:
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Developments on the Uyghur Situation in China |
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CBP Detained Gloves Under Recent WRO: CBP held 1900 pairs of gloves at the Ports of LA and Long Beach last week under a recent Withhold Release Order (WRO) targeting apparel from the Chinese manufacturer Yili Zhuowan Garment Manufacturing Co., Ltd. The gloves will not necessarily be seized, and the importer will be allowed to export the gloves. The WRO was one of five WROs the Administration released on September 14th over allegations of forced labor involving China's minority Uyghur population. The Administration has not issued a broad WRO applying to cotton or apparel from the Xinjiang region, but it could still issue such an order at a later date. If there is a suspected WRO violation, U.S. Customs and Border Protection (CBP) will detain the import unless a company can prove it is not violating the text of the order. Read more on the glove seizure here.
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Uyghur Legislation: The House passed two bills last month in response to serious human rights allegations in China's treatment of its minority Uyghur population. With limited time on the congressional calendar, the Senate will likely wait until after the 2020 Election to consider either bill. Senator Marco Rubio (R-FL) is working to advance his bill (The Uyghur Forced Labor Prevention Act, S. 3471/H.R. 6210), which passed the House in September with an overwhelming vote of 406 to 3. It would ban imports from the Xinjiang Autonomous Region, unless companies can provide clear and convincing evidence the product is not made with forced labor. It would also require publicly traded companies to disclose information about their supply chains under certain circumstances. Separate disclosure legislation (The Uyghur Forced Labor Disclosure Act, H.R. 6270) passed the House along mostly party lines and is less likely than the Rubio bill to become law.
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XPCC Sanctions: Last month, the Treasury Department announced an extension of the deadline for U.S. companies to end transactions with subsidiaries of the Xinjiang Production and Construction Corps (XPCC) in compliance with recent sanctions. The new deadline is November 30th. FDRA joined a number of associations in a letter urging the Administration to extend the deadline in order to give companies time to complete the necessary due diligence. Companies conducting due diligence have significant challenges since XPCC may have tens of thousands of subsidiaries according to some press reports.
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Other Footwear Trade Issues |
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It has been a busy couple of weeks in D.C. when it comes to international trade policy. Here are a few quick updates:
Miscellaneous Tariff Bill (MTB): Congress is currently drafting legislation based on the MTB Report from the U.S. International Trade Commission (ITC). MTBs provide temporary tariff relief for products that are not available in the U.S. like certain chemicals, machinery, equipment, footwear, and apparel. The 65 current footwear MTBs will expire at the end of the year unless Congress acts, and FDRA filed a number of requests on behalf of Member companies to extend and expand the current MTBs. The Final MTB Report, released in August, advanced more than 130 footwear MTB petitions to Congress. With limited time on the congressional calendar, a vote on MTB legislation could take place after the 2020 Election or in 2021.
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Generalized System of Preferences (GSP): Rep. Albio Sires (D-NJ) has introduced a resolution (H. Res. 1178) in the House to oppose any inclusion of footwear, apparel, or textile in the Generalized System of Preferences (GSP) program. If Congress passes the resolution, it will not have the force of law. However, Members of Congress who sign on to it will be on record in opposition to GSP expansion. FDRA has long supported expanding GSP to cover footwear, and we are working hard to push back on this resolution. The GSP program expires at the end of the year. and Congress will try to pass an extension of the program without modifications to prevent GSP from lapsing.
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Haiti Trade Preference Extension (H.R. 991): On October 10th, President Trump signed into law an extension of the Caribbean Basin Economic Recovery Act, which provides duty-free treatment for goods made with U.S. textiles in Haiti and other Caribbean countries. The renewal extends the trade preference program through September 30, 2030. Even with the current political environment on trade, extending the program had strong support in Congress, passing the House by voice vote and the Senate unanimously.
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Past FDRA Member Weekly Check-In Call Recordings |
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FDRA Members can view past FDRA Member Weekly Check-In calls here: FDRA Intel Center (You need to register and create a password to access).
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