Articles Posted in International Trade

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If the International Trade Commission (ITC) determines that an article is being imported into the U.S. in such increased quantities as to be a substantial cause of serious injury or the threat thereof, to the competitive domestic industry, the President “shall take all appropriate and feasible action ... which the President determines will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs, 19 U.S.C. 2251(a). A U.S. manufacturer requested that the President protect U.S. solar manufacturers against foreign imports of crystalline silicon photovoltaic cells. The ITC made an affirmative serious injury determination; the Commissioners were divided with respect to relief. The ITC reported on imports from Canada under the NAFTA Implementation Act, finding that Canada contributed roughly 2% of the relevant imports during the applicable period. Imports from Canada declined in 2015-2016. ITC found that Canadian imports did not “contribute importantly” to the serious injury. In 2018, the President announced a four-year safeguard, including a 30- percent tariff on solar products, whether assembled as cells or modules; finding that imports from Canada accounted for a substantial share and contributed importantly to the serious injury or threat, he did not exempt Canadian imports. Canadian manufacturers and a U.S. importer filed suit. The Federal Circuit affirmed the denial of a preliminary injunction, holding that the President’s actions here were lawful, so there was no probability of success on the merits as required for a preliminary injunction. View "Silfab Solar, Inc. v. United States" on Justia Law

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The Department of Commerce published antidumping and countervailing duty orders on certain crystalline silicon photovoltaic cells imported from China (CSPV Orders). Sunpreme, a U.S. company, imports solar modules produced in China that are composed, in part, of solar cells designed, developed, and tested at Sunpreme’s California facility. Sunpreme’s solar modules had been imported as entry type “01,” ordinary consumption entries not subject to any antidumping or countervailing duties. In April 2015, Customs requested that Sunpreme file its entries under type “03,” entries subject to duties. Sunpreme provided Customs with lab results from an independent third party and invited Customs to its California facility to observe its production process, arguing that its products were not within the scope of the CSPV orders. Customs performed its own laboratory testing. Sunpreme sought relief in the Trade Court. Commerce initiated a formal scope inquiry. The Trade Court issued a preliminary injunction, holding that Customs acted outside its authority in its unilateral interpretation of the scope language of the CSPV Orders to include Sunpreme’s solar modules. Commerce issued its final scope determination concluding that Sunpreme’s products fall within the scope of those Orders. The Federal Circuit reversed, holding that the Trade Court lacked jurisdiction under 28 U.S.C. 1581. Sunpreme was required to exhaust administrative remedies by a scope ruling inquiry and scope ruling determination. View "Sunpreme Inc. v. United States" on Justia Law

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The Commerce Department's duty orders concerning aluminum extrusions from China cover “aluminum extrusions” described as "parts for final finished products that are assembled after importation.” The scope “includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise” but “excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry.” The orders also exclude goods containing aluminum extrusions that are entered unassembled in a “finished goods kit, a packaged combination of parts that contains all of the necessary parts to fully assemble a final finished good without further finishing, such as cutting or punching, for assembly “as is” into a finished product, except that “[a]nimported product will not be considered a finished goods kit "merely by including fasteners such as screws, bolts.” Whirlpool requested a scope ruling concerning its kitchen appliance door handles with end caps. Commerce found that the handles were within the Orders’ scope. The Federal Circuit held that substantial evidence supports Commerce’s Scope Ruling. The exception for fasteners unambiguously applies only to the finished goods kit exclusion and not to the finished merchandise exclusion; because the finished goods kit exclusion is inapplicable to Whirlpool’s assembled handles, so is the fasteners exception to the finished goods kit exclusion. The court remanded for a determination of whether Whirlpool’s assembled handles meet the requirements for the finished merchandise exclusion. View "Whirlpool Corp. v. United States" on Justia Law

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The U.S. Department of Commerce determined that certain extruded aluminum door handles for kitchen appliances that are packaged with two plastic end caps and two screws were within the scope of antidumping and countervailing duty orders applicable to aluminum extrusions from China. The duty order describes imports from China of aluminum extrusions that are shapes and forms, produced by an extrusion process, made from specified aluminum alloys, and possessing “a wide variety of shapes and forms” in “a variety of finishes.” Subject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation, including, but not limited to, window frames, door frames, solar panels, curtain walls, or furniture. The scope includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies. On remand, Commerce determined, under protest, that the subject products are not included in the scope of the orders. The Federal Circuit reversed. The Trade Court impermissibly substituted its judgment for that of Commerce to conclude that the plastic end caps rendered the handles “assemblies” excluded from the general scope language. The order's scope as a whole supports Commerce’s treatment of the end caps as fasteners. The scope language does not limit fasteners to non-plastic components, but rather provides examples of common fasteners. View "Meridian Products, LLC v. United States" on Justia Law

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Income earned by Americans typically is taxed in the U.S., regardless of where it is earned. European countries only tax income earned within their borders. To address possible “double taxation” the U.S. generally provides credits for taxes paid to foreign governments; European systems typically exempt from taxation income earned abroad. Congress, believing that the exemption method puts American companies at a trade disadvantage, has enacted various tax regimes, then received push-back from its European trading partners, who claimed each was an effective export subsidy. The 2000 ETI Act, intended to ease the burden of the tax revisions on domestic producers, was rejected in the World Trade Organization (WTO). Congress responded with the 2004 American Jobs Creation Act (AJCA), 118 Stat. 1418. Section 101 repeals the ETI provision that excluded extraterritorial income from taxation, effective for “transactions after December 31, 2004.” Section 101(d), provides: In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection. In 2005, WTO found that the ACJA improperly maintained prohibited ETI subsidies through transitional and grandfathering measures. Congress repealed section 101(f), effective for “taxable years beginning after” May 17, 2006. It did not repeal or revise section 101(d). Pursuant to a 2006 Agreement, DWA recognized qualifying extraterritorial income for 2006, invoked section 101(d), and excluded 60% from gross income. The IRS allowed the exclusion. DWA subsequently sought refunds for 2007-2009, claiming the section 101(d) exclusion. The Federal Circuit, disagreeing with the IRS and the Claims Court, held that section 101(d) unambiguously provides transitional relief for all extraterritorial income received from transactions entered into in 2005 and 2006, even income received in later years. View "DWA Holdings LLC v. United States" on Justia Law

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The Department of Commerce investigated imports of oil country tubular goods (OCTG). To make OCTG, steel is made into “green tube,” which must be finished to meet specifications for oil and gas well applications. The finishing process includes heat treatment, threading, coating, and other processes. Commerce issued duty orders on OCTG from China, covering "OCTG . . . whether finished (including limited service OCTG products) or unfinished (including green tubes and limited service OCTG products), whether or not thread protectors are attached .... also ... OCTG coupling stock. Excluded from the scope of the order are casing or tubing containing 10.5 percent or more by weight of chromium; drill pipe; unattached couplings; and unattached thread protectors. Customs later determined that OCTG made with unfinished OCTG from China, but finished in Korea or Japan, had a country of origin of Korea or Japan because “heat treating has been held to substantially transform green tubes into oil well tubing.” Commerce addressed the issue in a 2014 Scope Ruling. After remands, the Trade Court concluded that the Orders do not include OCTG finished in third countries and that OCTG finished in third countries does not meet the requirements for circumvention (19 U.S.C. 1677j). The Federal Circuit vacated. The Trade Court improperly proscribed Commerce from using the substantial transformation analysis to determine the country of origin for imported OCTG. View "Bell Supply Co, LLC v. United States" on Justia Law

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The merchandise “consists of three varieties of wet-cooked and/or roasted, salted, flavored, and/or unflavored sunflower seeds in unbroken shells: All Natural Flavor, Spiced Flavor, and Coconut Flavor” for human consumption and not for the extraction of oils or fats. After initial processing and selection, the sunflower seeds are heated in an oven. Salt is added, the seeds are cooled, and those in unbroken shells are packaged into bags sold for consumption and imported. The subject merchandise is not interchangeable with: raw sunflower seeds; sunflower seeds that only undergo heat treatment to preserve them, to inactivate antinutritional factors, or to facilitate their use; or sunflower seeds that are not roasted, salted, and flavored. Customs classified the merchandise under HTSUS Subheading 2008.19.90 at a duty rate of 17.9 %. That Subheading covers “[f]ruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: [n]uts, peanuts (groundnuts) and other seeds, whether or not mixed together: [o]ther, including mixtures: [o]ther.” The importer argued that the merchandise should enter at a duty-free rate under HTSUS Subheading 1206.00.00, which covers “[s]unflower seeds, whether or not broken.” The Trade Court and Federal Circuit upheld Customs’ classification. View "Well Luck Co., Inc. v. United States" on Justia Law

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In 2009-2010, WWRD imported decorative ceramic plates and mugs from its “Old Britain Castles” dinnerware collections; decorative ceramic plates and gravy boats from its “His Majesty” dinnerware collection; and crystal flutes, punch bowls, and hurricane lamps from its “12 Days of Christmas” collection. All were decorated with holiday motifs and intended to be used during Thanksgiving or Christmas dinner. Customs classified the articles based on their constituent materials, placing the various goods in subheadings 6912.00.39, 7013.22.50, 7013.41.50, and 9405.50.40 of the Harmonized Tariff Schedule of the United States (HTSUS). WWRD filed multiple protests, arguing the articles should be classified in 9817.95.01, which provides duty-free status for “[a]rticles classifiable in subheadings 3924.10, 3926.90, 6307.90, 6911.10, 6912.00, 7013.22, 7013.28, 7013.41, 7013.49, 9405.20, 9405.40, or 9405.50 ... meeting the descriptions … Utilitarian articles of a kind used in the home in the performance of specific religious or cultural ritual celebrations for religious or cultural holidays, or religious festive occasions, such as Seder plates, blessing cups, menorahs or kinaras.” The Trade Court and Federal Circuit upheld the classification, reasoning that imported items were not used for specific rituals. View "WWRD US, LLC v. United States" on Justia Law

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ThyssenKrupp imports corrosion-resistant carbon steel flat products (CORE) from Germany. In 1993, the Department of Commerce imposed an antidumping duty on such imports. Between February 14-July 2012, ThyssenKrupp made eight such entries. Customs assessed ThyssenKrupp’s antidumping duties at the prevailing rate: 10.02%. Meanwhile, in January 2012, the International Trade Commission instituted its required sunset review of the 1993 order; in 2013, the ITC informed Commerce that revocation of that order would not likely lead to material injury to a domestic industry. Days later, under 19 U.S.C. 1675(d)(2), Commerce published notice of the revocation of the order for CORE, effective February 14, 2012. In April 2013, Commerce instructed Customs that “all unliquidated entries” should be liquidated without regard to antidumping duties. ThyssenKrupp filed administrative protests, asserting that its CORE entries occurred after the February 14 effective date, and sought refunds of the duties. Customs denied ThyssenKrupp’s protests, interpreting the April instructions’ “unliquidated entries” phrase as not covering the eight entries. The Trade Court dismissed ThyssenKrupp’s suit as untimely under 28 U.S.C. 1581(a), leaving the entries subject to the antidumping duty, even though the entries were made when duties were no longer legally warranted. The Federal Circuit reversed the dismissal of the claim; the entries were “unliquidated” within the meaning of the April instructions implementing the results of the sunset review. View "ThyssenKrupp Steel North America, Inc. v. United States" on Justia Law

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GRK imported into the U.S. three types of screw fasteners, used to mate dissimilar materials and made with corrosion-resistant, case-hardened steel. Customs classified the screws as “other wood screws” under subheading 7318.12.00 of the Harmonized Tariff Schedule of the United States (HTSUS), subject to an import duty of 12.5%. GRK claimed that the screws should be classified under subheading 7318.14.10 as “self-tapping screws,” with a 6.2% duty. The Court of International Trade granted GRK summary judgment. The Federal Circuit remanded, instructing the court to consider use in interpreting the HTSUS terms. On remand, the Trade Court ordered pretrial discovery limited to the issues of “intended use,” “principal use,” and “actual use” and found that the screws are “self-tapping screws” because they are capable of cutting a mating thread in non-fibrous materials, are made of case-hardened carbon steel or stainless steel, and meet minimal torsional strength requirements. The Federal Circuit affirmed the application of classification subheading 7318.14.10 for “self-tapping screws,” and summary judgment in favor of GRK. View "GRK Canada, Ltd. v. United States" on Justia Law