Expected reduction in duties for China Section 301 list 4a duties and update on US Mexico Canada Free Trade Agreement (USMCA)

As per our previous Industry newsletter, the US and China signed the “Phase One” trade deal. Today the U.S. Trade Representative released its draft Federal Register notice indicating that the new, lower rate will apply to merchandise entered or withdrawn for consumption as of 12:01 AM on February 14, 2020. Entries filed before that date will, therefore, remain subject to the higher 15% duty rate (so the reduction is not retroactive). We can delay making entry on shipments arriving prior to February 14^th, subject to list 4a, if there is no IT date (meaning it will move in bond to an inland point prior to release of cargo).  The IT date which is normally date of arrival in first port will apply (so if prior to 2/14/2020 we will have to process with the full 15% duties.    Please contact your Western Overseas representative if you have any questions. List 4b duties remain suspended.

The U.S. Senate voted to approve the USMCA (new NAFTA) implementation bill. The USMCA implementing legislation now heads to the White House for signature. In the interim, the original NAFTA in force since 1994 remains in effect. Even once the White House signs off on the implementation bill, Canada must also approve implementing legislation. Once that happens, it is anticipated that the new USMCA will take effect approximately 90 to 120 days after the last NAFTA country approves the new USMCA. Specifically, per the Protocol to the USMCA, it will enter into effect on the first day of the third month after the last country notifies its approval.