June 20, 2018 | Industry Insights
Bond Sufficiency Alert: Consumption Goods from China
By: Colleen Clarke – Vice President, Surety Trade Relations
As announced by the U.S. Trade Representative in Docket Number USTR-2018-0018 on June 15, 2018, the White House announced that the U.S. will impose retaliatory duties of 25% on goods valued at $34 billion covering 800 tariff numbers where the country of origin is China and the goods are entered for consumption, or withdrawn from warehouse for consumption, on or after July 6, 2018.
In our notice dated June 4, 2018 we advised customs brokers to be aware of the impact on bond sufficiency of the Section 232 duties on steel and aluminum. We advise the same alertness to sufficiency for these Section 301 duties.
The 25% duties on Chinese goods will affect your importer clients’ bond amounts. As you know, one of CBP’s priority trade issues is Revenue Collection. The Office of Finance in Indianapolis is tasked with ensuring the government is protected and they perform monthly sufficiency reviews to guarantee such protection.
Although it is understood that it is the importer’s responsibility to ensure its bond is sufficient under informed compliance requirements, Roanoke understands that customs brokers strive to assist their importing clients to meet this requirement. To ensure your clients’ bonds are not rendered insufficient, we highly recommend that you be proactive and work with your clients to forecast the amount of duty they will be paying in the coming months.
Remember that the bond amount is calculated based on 10% of the total duties, taxes and fees (including ADD/CVD) paid OR payable in the last 12 months. The effective/anniversary date of the bond has no bearing on the calculation.
We are committed to assisting the customs brokerage community and are vocal with our government leaders in explaining the harm these high tariffs will cause the trade industry and consumers. We expect these barriers to trade to continue and will voice our concerns as they arise.
Roanoke Trade assists customs brokers and their clients to procure a variety of surety products including U.S. Customs Bonds. The importing landscape is constantly changing and it is critical to have a partner in place to keep you informed of new regulations and potential exposures.