One recurring theme in multiple panels was President Trump’s controversial tariffs on steel and aluminum and the effects of expected retaliation by affected nations. Another common topic was export regulations and sanctions on foreign entities doing business with the U.S. Keynote addresses were delivered each day by Rich Ashooh, Assistant Secretary for Export Administration, and Kevin McAleenan, Commissioner of U.S. Customs and Border Protection.
U.S. 232 Tariffs and Retaliation
Targeting Republicans’ Constituencies
Export Control – CFIUS
Because of the globalization of business transactions, it has been challenging for the U.S. government agencies that comprise the CFIUS to review the large volume of potentially interesting cases. New legislation called the Foreign Investment Risk Review Modernization Act of 2017 (FIRRMA) is currently in U.S. Congress to help speed up the notification process, help block Chinese acquisition of land adjacent to critical U.S. defense and intelligence facilities, as well as Chinese acquisition of small Silicon Valley companies producing technologies such as artificial intelligence.
Department of Commerce, Export Control
Dolan discussed how CBP was looking to coordinate with the World Customs Organization (WCO) on their recently released framework of standards for e-commerce. The U.S. is seeking to have more input when the refined framework is scheduled to be released later this summer. Because the U.S. has a higher de minimis ($800) and a much higher volume of small packages below that threshold for requiring duty and data submission, CBP’s e-commerce challenges are magnified.
Ms. Magnus criticized the extent of the de minimis increase in February 2016 with the enactment of the Trade Facilitation and Trade Enforcement Act. She stated that an increase to $500 would’ve been more in line with inflation than $800. She also critiqued CBP for not being prepared, as the increase had been in discussion between lobbyists and Congress for several years.
During the Friday lunch keynote, U.S. CBP Commissioner McAleenan discussed e-commerce as the number one challenge facing CBP’s trade mission. Increases in small packages shipping to the U.S. has drastically increased in recent years; from 2016 to 2017 alone, the increase in small packages crossing the U.S. border went from 1.2 million per day to 1.7 million per day. These small packages increase risk for shipment of dangerous narcotics, such as fentanyl, counterfeit consumer goods, and health and safety hazards, such as unregulated pharmaceuticals.
CBP has created a Small Business and E-Commerce Branch within its Office of Trade. Initiatives in this area for CBP include: 1) Legal and regulatory enhancements, such as collecting more data on small shipments; 2) Adapting operations and staffing- as traditionally low volume, low-staffed ports are being overwhelmed with small packages amidst a nationwide Officer staffing shortage; 3) Creating incentives for businesses involved in e-commerce to cooperate with CBP- such as a trusted trader program for e-commerce; 4) Engage with e-commerce internationally- through the public and private sector abroad.
Recently, there has been expanded engagement with China and other countries by the U.S. Postal Service and CBP on collecting electronic advance data for international mail shipments prior to their arrival in the U.S. Previously, there were no advance data requirements for international mail. As a result, fentanyl seizures from China have increased significantly.
The AAEI Expo provides a great opportunity for trade community members from the U.S. and abroad to discuss important new and ongoing issues with each other as well as a small number of Government representatives. As the United States trade environment navigates uncertain times, it is essential to have events like this where industry members can speak freely about the problems and potential solutions to keeping the U.S. a prosperous, free, and appropriately regulated economy.