Taxing Imports, One At A Time (NPR - Audio Clip, very funny)

All Things Considered, June 25, 2009 ·

Listen to this broadcast by clicking below.  Highly recommended!

Every time a car or a T-shirt or an apple comes into the U.S., it’s taxed. And determining how much each product gets taxed is quite complicated.

An old and enormous book reveals how much — and the people who know and understand it are called “import specialists.”

Bret Ewing, one of these specialists at the Port of Seattle, has dealt with a “lot of issues” in categorizing wood flooring. He debates whether it falls under category 4409 or 4412, which depends on its construction.

Ewing has a cubicle, a computer and the enormous book called The Harmonized Tariff Schedule Of The United States. He checks that international importers are declaring their goods in the correct way. Big importers like Target or Wal-Mart have to declare everything, and the rates the goods are taxed vary. A toy might be taxed 3 percent on its appraised value, a car 5 percent — all depending on the category it falls under.

It may seem easy, but the massive book that classifies merchandise has 99 chapters.

“I’d say it’s kind of like our bible,” says Jim Henderson, who works with Ewing. “This is what we work from.”

Every day, these guys take an item that has come into the country, flip through the book and rule out every category it is not.

An iPod docking station sits on Ewing’s desk. But categorizing it is tricky. He knows it’s not an orange, not livestock, not an optical instrument, not a toy. So he can rule out a lot of the book — 84 chapters of it.

“I would first look at Chapter 85,” he says. “Beginning of Chapter 85 is for electric motors. That’s not right … shavers, hair clippers … loudspeakers.”

Read more of Chana Joffe-Walt’s report at NPR.org

Comparitive Classification of HS Codes - Indian Customs, Indian Excise and World Customs

ISLAMABAD: 25% regulatory duty on iron, steel export withdrawn

By Ijaz Kakakhel

ISLAMABAD: The government has withdrawn 25 percent regulatory duty on export of iron and steel scrap products to promote exports, official documents available with Daily Times revealed on Saturday.

The duty was imposed on export of waste/scrap of ferrous and non-ferrous substances as their export was causing shortage for the local industry based on the same raw material, thereby, increasing the cost of iron and steel construction materials.

Subsequently, exporters of non-ferrous substances started converting their copper/brass scrap into ingots to change HS nomenclature to avoid regulatory duty.

To check this practice, scope of regulatory duty was extended to ingots, bars, slabs and billets. According to the documents, due to this levy, exports of these value added items became unfeasible putting local exporters at a disadvantageous position in the international market. To provide competitive environment to local manufacturers of these items, the government withdrew 25 percent regulatory duty on export of iron and steel scrap products.

For protection of local industry, the government increased import duty from 5 percent to 10 percent on import of hydrogen peroxide in the budget 2009-10.

Hydrogen peroxide being an essential raw material for a number of local industries including textile and paper was confronting 5 percent import duty. The current demand of the country for this item is about 55,000 metric tonnes. According to the budget document, the local industry had sufficient production capacity to meet this demand. In order to protect the local industry, the government increased the rate of import duty on hydrogen peroxide (PCT code 2874.0000) from existing 5 percent to 10 percent.

Read More

Customs service probes codes - South Korea

The Korea Customs Service is planning to create a special force to look into the issues surrounding an internationally-shared system for classifying traded products.

The Harmonized Commodity Description and Coding System , or HS, is a basis for applying import duties.

It acts as an invisible trade barrier as many countries grant HS on imports with which they can try to impose higher duties.

But conflicts surrounding HS codes are on the rise.

A good example is a Digital Multimedia Broadcasting, or DMB, mobile phone. Germany classifies the item as a television.

The import duty the country imposes on an imported TV is 14 percent. Yet no duty is paid on a mobile phone.

Exporters are forced to find ways to avoid paying high import duties. For instance, agricultural product exporters to Korea add sugar or salt to their products because Korea slaps lower duties on processed goods.

A Korean company that has exported dump trucks to South Africa since 2004 is another example. The high speed of the trucks, however, has worked against the company. In South Africa, dump trucks are perceived as vehicles that run slowly around construction sites.

But the dump trucks imported from Korea were so fast they could drive on the highway.

So the country handed out HS code 870410, normally given to other types of trucks.

Continue reading at the source  http://joongangdaily.joins.com

AGRICULTURE DEPUTY SECRETARY MERRIGAN ANNOUNCES U.S. – CANADA AGREEMENT FOR ORGANIC TRADE EQUIVALENCE

Costa Rica and EU ‘near trade deal’

osta Rica and the European Union are said to be close to finalising an agreement of association, which would include bananas

Costa Rica and the European Union are reportedly close to finalising the terms of an agreement of association, under which Europe is said to have offered to lower its controversial import tariff for the Latin American country’s bananas.

The two sides are currently meeting in Brussels with the aim of reaching a deal over the terms of the agreement, which would cover sugar and coffee as well as bananas, during a further round of talks that are scheduled to start of 6 July.

One of the key issues to be resolved during the forthcoming round of talks will be the European Union’s banana import tariff for Latin American products, which currently favours imports from ACP (African, Caribbean and Pacific) countries.

European negotiators have reportedly offered to reduce the tariff for Costa Rican banana imports from €176 per tonne to €95 per tonnes within 10 years.

However, according to Costa Rican daily La Nación, Costa Rica is said to be unwilling to accept the proposal, arguing that a similar reduction had already been offered to the World Trade Organisation (WTO).

Costa Rica’s chief negotiator, Roberto Echandi, told the publication that there remained some “very hard obstacles” to resolve in the forthcoming round of talks, but he said that the country would sign the deal once a “balanced and advantageous” deal was reached.

Source:  www.fruitnet.com

Possible Plan for Tariffs on Imports From China Remains Alive in House Climate Bill

A House committee working on sweeping energy legislation seems determined to make sure that the United States will tax China and other carbon polluters, potentially disrupting an already-sensitive climate change debate in Congress.

The Ways and Means Committee’s proposed bill language (pdf) would virtually require that the president impose an import tariff on any country that fails to clamp down on greenhouse gas emissions.

Directed primarily at China, the United States’ biggest manufacturing competitor, the provisions aim to protect cement, steel and other energy-intensive industries that expect to face higher costs under a federal emissions cap. But associations that represent importers and multinational corporations are raising red flags, warning that the language could lead to trade wars, hurt the United States’ ability to export low-carbon technology and harm consumers.

“This is a sleeper issue that lawmakers have not been paying enough attention to,” said Jake Colvin, vice president for global trade issues at the National Foreign Trade Council, which represents multinational corporations like Boeing Co. and Microsoft Corp. advocating for an open international trading system.

Read the rest of this article at its original source  NYT.com

India imposes import tariffs to protect domestic producers

As the Indian economy recovered from the global recession with the Index of Industrial Production (IIP) growth rates just 2% below the highs of last year, it sought to impose extensive import tariffs on Chinese toys and other goods. According to the reports of the Indian government, imports from China rose by 55% to $27bn (€19.3bn, £16.4bn) in the financial year to April 2008 and again in the year just ended but particularly took over the toy industry with a majority of the $2.5bn market this year. India and China have been disputing with each other for many months with China threatening to take the case to the World Trade Organisation (WTO).

It is not the import of toys alone, but that of other items including steel, which India wants to limit. Imports of Hot rolled coils (HRC) have surged 300%. According to India’s Director of Foreign Trade, no anti dumping cases have yet been imposed yet. But with many overseas markets applying import tariffs on Indian steel it will probably not be long before Indian domestic steel industry starts imposing tariffs.

Moreover, in March, India imposed 35% duty rates on Chinese aluminum sheets and 22% on aluminum foils, mostly at the request of domestic producer Hindalco, which already enjoys 55% of the domestic foil market and 70% of the flat rolled market according to the business website, domain-b.com.

Even though, lawmakers across the financially slumping trading world have done well in resisting the imposition of import tariff, India appears to be an exception among them.

Source:  http://iitrade.ac.in/news-archive.asp?news=825

Initiating a tariff 
investigation – step three

Last week, I highlighted Trade 
 Insight (www.trade-
 insight.co.za) and Tariff Book (www.tariffbook.co.za) – what I consider to be the second step in a tariff application. Once you have obtained the desired trade (import and export) statistics, which provide additional substantiation and reasoning for an application, you are now in a position to progress to step three.

The third step is that of 
obtaining a customs tariff amendment application form and a copy of the tariff investigations regulations. Though their names might suggest differently, the application form and the 
regulations are, indeed, applicable to one and the same thing – tariff investigations.

To clarify, tariff investigations can be initiated in respect of an increase in the rate of customs duty (duty), a reduction in the rate of duty, the creation and/or amendment of the rebate of a duty (also called a rebate facility), 
the creation (also called insertion) or a tariff subheading, and the deletion (also called removal) of a tariff subheading.

Once you have decided on the type of tariff investigation you intend to apply for, you will need to study both the application form and the regulations in great 
detail, as compliance will be of the essence, since noncompliance could place your application at risk and could have a negative impact on your business.
In next week’s instalment, I will deal with the application form and the regulations in more detail.

Revenue Laws Amendment Bills – Comment Due
Last week, the National Treasury released two Revenue Laws Amendment Bills for public comment, and comment is due by June 26.

The amendments proposed 
include the following amendments to the Customs and Excise Act of 1964: provisions empowering the withdrawal or amendment of a decision, notice or communication; provisions regulating the removal of goods in bonds; provisions regulating the exportation of goods from a customs and excise warehouse; special provisions regarding the storage and clearance of stores, spares and equipment supplied to foreign-going ships and aircraft; provisions specifying circumstances in which ‘goods free of duty’ may be entered under a rebate item of Schedule No 4; provisions under which a penalty may be mitig-
ated or remitted; the insertion of provisions in respect of schemes for purposes of avoiding liability for duty or reducing amounts of duty payable; provisions regulating the payment of outstanding amounts and interest; and provisions empowering the making of rules for purposes of modernising customs administration.
Tariff Investigations – Comment Due

Read the rest of this article at its source www.engineeringnews.co.za

Initiating a tariff investigation – step two

Last week, I highlighted tariff history (www.tariffhistory.co.za), which I consider to be the first step in a tariff application. Once you have the tariff reports and notices, which provide the true reasoning behind, and motivation for, the existence of a tariff dispensation – in other words, the prevailing rate of customs duty – then you are ready to progress to step two.

In South Africa, one of the most over- looked aspects of international trade is analysing import and export statistics, more commonly know as trade statistics. It is critical for any business to account for goods entering or leaving South Africa. How else do you account for international competition? If you leave it to the market to alert you to international competition, you might find yourself losing business much sooner that you are prepared for. Trade Insight (www.tradeinsight.co.za) provides trade statistics in respect of the value (in South African rands), the quantity, the unit price (also in South African rands) and the country of origin or the destination.

Once you have such information at your disposal, you are able to manipulate such information to derive maximum benefit from it. As an example, you could determine the amount of customs revenue that govern- ment collects for products falling under a given tariff subheading. All you need to do, depending on the type of duty, is to consi- der the quantity and value of the imported product. The prevailing rate of duty can be determined by consulting the tariff book (www.tariffbook.co.za). By performing a relatively simple calculation, you can determine the amount of customs revenue collected by government. Such information will be a vital part of the information in a tariff investigation…. Continue reading at  www.engineeringnews.co.za