Industry News

Section 301 Imports from France Postponed

Section 301 Imports from France Postponed

Trade Truce between France and U.S.

The United States and France have been in minor trade talks in Switzerland this week and agreed to a “trade truce” for the moment.  Although, it has not been announced officially by the USTR or the White House. According to CNN, “The White House said Monday that Trump spoke with French President Emmanuel Macron and ‘agreed it is important to complete successful negotiations on the digital services tax,’ though did not confirm his decision to hold off on tariffs for now.”

France’s Digital Taxes on U.S. Postponed

Moreover, Sandler, Travis, and Rosenberg state, “U.S. and French officials meeting in Switzerland this week have reportedly agreed to a truce in which France will suspend its collection of the tax until the end of the year to give the Organization for Economic Cooperation and Development time to conclude an international agreement on digital taxes.”

Ad Valorem Duties of 100% Postponed

In early December 2019, The Office of the U.S. Trade Representative determined that the Digital Services Tax that will be imposed by France is unreasonable or discriminatory and burdens or restricts U.S. commerce.  As a result, the Section 301 committee held hearings to determine which products from France may be subject to additional duties of up to 100% of the dutiable value to compensate for this action by France.  As of now, those ad valorem duties are postponed until at least the end of 2020.

Section 301 Imports from France Postponed

Public hearings were held on January 7, 2020.  The due date for rebuttal comments is January 14, 2020.  The preliminary list includes 63 products with an estimated import trade value of $2.4 billion in 2018.

Some of the products include:

  • yogurt
  • whey protein
  • butter
  • cheese
  • make up
  • soap
  • handbags
  • household chinaware
  • cast iron household items
  • manicure and pedicure preparations
  • wine

[*side note: The USTR has been imposing additional tariffs of 25% on more than 150 goods imported from various European Union members, including France, since October 18, 2019.]

View the full USTR announcement to see the full list with HTS numbers.

View USTR Announcement

Background

On July 24, 2019, France signed into law a 3% Digital Services Tax (DST) on revenues that certain companies generate from providing certain digital services to, or aimed at, persons in France.  As a result, USTR initiated an investigation of the French DST pursuant to section 302(b)(1)(A) of the Trade Act of 1974, as amended (the Trade Act), and evidence shows that the DST is unreasonable and discriminatory towards U.S. commerce.  To read more details, please read the USTR announcement.   Pursuant to sections 301(b) and (c), the U.S. Trade Representative proposes to determine that action is appropriate and that appropriate action would include the imposition of additional ad valorem duties of up to
100 percent on certain products of France.

Consulting

Scarbrough is offering a FREE 30-minute consultation to any importer affected by the Section 301 Tariffs. Email consulting@scarbrough-intl.com or fill out the form below.

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Other ways to Learn More about Duty Savings

If the Section 301 tariffs are affecting your company, watch this webinar recording to learn more.  Scarbrough’s President and COO, Adam Hill, along with Patrick Caulfield, an attorney at GDLSK, an international trade and customs law firm, talk about legal opportunities to recover or avoid paying duty to CBP.  This is an interactive webinar set up as a question/answer forum.

 

Resources

To read more about Section 301, visit USTR.gov