International Trade Law: Duties, Tariffs, Restrictions

International trade law not only encompasses exports from the US but imports coming into the US. Almost all US exports and imports are characterized in some regulation to determine if a US export license or exception is required on export from the US, and to determine the restrictions or duty/tariff applicable on the import of products or material into the US. This article focuses on US import issues, particularly the Harmonized Tariff Schedule of the US (HTSUS).

In order to determine if a restriction on import, or if a duty/tariff must be paid on the import of a product or material into the US, a description of that class of product or material appears in a column on the HTSUS and next to that described class the amount of import duty/tariff, etc. will be noted.

Every five (5) years the US International Trade Commission (USITC) revises the HTSUS to update restrictions, duties/tariffs based on world economic conditions, US economic conditions, US and world inflation and geo-political issues affecting the US. If the revisions to the HTSUS are acceptable to the sitting US President, then by Presidential Proclamation, those revisions are adopted and made law. Revisions to the HTSUS were submitted to the US President in December of 2021 and proclaimed as in effect by Presidential Proclamation 10326 on January 27, 2022. The HTSUS will be revised again in five (5) years.

What does this mean? As an example, a product which a client produces and imports into the US might not have a duty/tariff on import in 2021 but may be subject to an import duty/tariff or an increased or reduced duty/tariff in 2022 considering the revisions.

As important, anti-dumping and countervailing duties may be radically increased on certain imports like aluminum or steel after a HTSUS revision depending on world geo-political and US economic issues. An anti-dumping duty sometimes at 100% of the value of the import might be applicable to unfinished aluminum and then drop to 20% after revision of the HTSUS. The same for countervailing duties. A US anti-dumping or countervailing duty is levied on a product or material imported into the US in order to keep US companies who sell the same product or material competitive—to avoid an unfair competitive advantage by a foreign company.

A countervailing duty is levied on a product imported into the US because a foreign government subsidizes the production of a product making it difficult for a US company to compete when selling that product in the US. Both anti-dumping and countervailing duties are imposed to attempt to level the playing field for US companies competing with foreign companies selling similar products in the US.

Each five (5) years, a US company can price a product and sell it in the US knowing that a foreign company must build into its price a duty/tariff to sell the same product in the US. There is some uncertainty because the duty/tariff can be revised by the USITC in five (5) years if those changes are accepted by the sitting president by proclamation.