Trade

February 2022: Ocean Shipping Reform Bills Moving Through Congress

The bipartisan Ocean Shipping Reform Act (H.R. 4996) passed the U.S. House of Representatives on Thursday, February 3 as an amendment to a larger bill seeking to enhance U.S. competition against China. The House voted 367-59 to include shipping law reform provisions as an amendment to the broader legislation (H.R. 4521), which then passed the House on Friday, February 4.

In September of 2021, NAMM joined more than 150 retail, manufacturing, and agriculture organizations to strongly encourage lawmakers to support and pass HR 4996’s shipping reform provisions to alleviate the current and projected supply chain bottlenecks at U.S. ports. The reforms would, among other things, address the shortage of shipping containers and provide the Federal Maritime Commission (FMC) with more enforcement tools to curtail unfair ocean carrier practices.

Previously, in December, the House approved the Ocean Shipping Reform Act as a free-standing measure. It is now up to the Senate to consider and act on the House-passed free-standing bill, the larger competition measure, or the chamber’s own version of shipping reform legislation.

In the Senate, Sens. Amy Klobuchar (D-MN) and John Thune (R-SD) introduced a bill BOM21CO1, very similar to the House shipping reform bill. The bipartisan legislation, introduced on February 3, has 12 additional cosponsors. Sen. Klobuchar is also the primary sponsor of another shipping reform bill that would establish procedures for shippers and ports to participate in FMC investigative and enforcement matters that involve ocean carriers.

NAMM will continue to monitor this important issue and will provide updates as they are available. Please visit this page regularly.

December 2021: U.S. House of Representatives approves NAMM-supported Ocean Shipping Reform Act; Call to Action.

December 8, 2021, the U.S. House of Representatives passed the Ocean Shipping Reform Act (HR 4996) by a bipartisan vote of 364-60. The bill now moves to the Senate for consideration. The legislation sponsored Rep. John Garamendi (D-CA) and Rep. Dusty Johnson (R-SD), would make improvements to the international maritime system and help address, in part, the supply chain disruptions exacerbated by the COVID-19 pandemic.

NAMM is a member of a coalition comprised of associations, including the National Retail Federation, companies, and other leading supply chain stakeholders, urging Congress to pass this legislation. In September, NAMM was among 152 companies and organizations endorsing the bill in a letter submitted to Reps. Garamendi and Johnson.

It has been more than two decades since Congress passed reforms to provide the Federal Maritime Commission with additional authority to regulate the global ocean shipping industry. In November, the White House indicated support for HR 4996 in a blog outlining the Administration’s efforts to unclog the supply chain.

CALL TO ACTION - It is now up to the Senate to consider and pass the Ocean Shipping Reform Act (HR 4996) or similar legislation. Sens. John Thune (R-SD) and Amy Klobuchar (D-MN) are expected to soon introduce a bill similar to the Ocean Shipping Reform Act.

NAMM urges concerned members to contact your U.S. Senators to urge their support. Find your Senator’s contact information, here.

Suggested message: I am encouraged by the House passage of the bipartisan Ocean Shipping Reform Act (HR 4996) and respectfully request your support of this bill or similar legislation to address supply chain challenges that are having a significant effect on exporters and importers and our nation’s economic recovery. It’s essential for my business, and for music retailers and manufacturers across the country, to get our supply chain moving and reduce port congestion so we can meet the needs of Americans during the holiday season and beyond. Again, I urge you to consider and pass the Ocean Shipping Reform Act or similar legislation.

NAMM monitors trade issues and provides periodic updates on advocacy efforts and pending legislation. Please visit this page regularly.

Shipping Webinar: Delivery delays and other updates

Disruptions in the availability of shipping containers and routes, backlogged ports, trucking shortages, and warehouse storage fees are causing major issues for music, pro audio and live event product manufacturers, distributors, retailers and, ultimately, for consumers who face delivery delays and increased pricing on goods. NAMM Public Affairs gathered a panel of international shipping experts for a webinar to get to the bottom of this complicated and multifaceted crisis. Host Mary Luehrsen, Director of Public Affairs and Government Relations engaged Jonathan Gold, VP Supply Chain and Customs Policy, National Retail Federation, Karyn Booth, Partner and Practice Group Leader, Thompson Hine LLP and general counsel for the National Industrial Transportation League, and Armin Zertor and Carley Jones with Masterpiece International in a conversation that covers the origins of the current shipping backlog, explains where it currently stands, and provides suggestions for how to mitigate delays in receiving products from overseas.

Watch Here

Public Comments Requested on Risks in the Semiconductor Supply Chain; Deadline, Nov. 8, 2021

In February, President Biden issued an Executive Order on “America's Supply Chains,” which directs several federal agency actions to secure and strengthen America's supply chains. With the goal of accelerating information flow across the various segments of the supply chain, identifying data gaps and bottlenecks in the supply chain, and potential inconsistent demand signals, the U.S. Department of Commerce is seeking responses from interested parties including domestic and foreign semiconductor design firms, semiconductor manufacturers, materials, and equipment suppliers, as well as semiconductor intermediate and end-users. 

Concerned NAMM members are urged to submit comments by the Nov. 8 deadline, as follows:  

1. Download a fillable form at https://bis.doc.gov/semiconductorFRN2021    
2. Submit the filled out electronic form in https://www.regulations.gov when submitting comments in response to docket number BIS 2021-0036 or RIN 0694-XC08
3. Note: All comments received, including any personal and company information, will be publicly posted as submitted, open to public inspection online.  It may take several business days before your submission is posted. 

For further information contact David Boylan, Defense Industrial Base Division, Office of Technology Evaluation, Bureau of Industry and Security, at 202-482-7816, SemiconductorStudy@bis.doc.gov

September 17, 2021: U.S. Dept. of Transportation Supply Chain/Shipping Public Comment Deadline, Oct. 18, 2021

On February 24, 2021, President Biden issued an Executive Order directing several Federal agency actions to secure and strengthen America’s supply chains. President Biden also established a Supply Chain Disruptions Task Force to address near term supply chain challenges, with a focus on alleviating bottlenecks and supply constraints in the transportation sector, particularly for ports, rail, and trucking.

The Executive Order requires the Secretary of Transportation to submit, within one year, a report with public input, on supply chains for the transportation industrial base focusing on the freight and logistics sector, with the goal of strengthening resilience among transportation supply chains.

The Department seeks information from the public on the current challenges faced within the freight and logistics sector, including, but not limited to:

• The identification of major infrastructure or operational bottlenecks and chokepoints across all aspects of the freight and logistics supply chain—including shipping/receiving, intermodal transfer, rail/water/truck transportation, warehousing, etc.—that slow or impede efficient cargo movement within the freight and logistics sector, and the most effective investments and management practice improvements that could be made to alleviate those bottlenecks.
• The effects of climate change on transportation and logistics infrastructure and its implications for supply chain resiliency.
• Technology issues, including information systems, cybersecurity risks, and interoperability, that affect the safe, efficient, and reliable movement of goods. Would greater standardization of those technologies help address those challenges?
• Current barriers (including statutory, regulatory, technological, institutional, labor and workforce, management, existing business models/practices issues) that inhibit supply chain performance. For any barriers identified, please address the actors involved and potential outcomes should those barriers be removed.
• Other policy recommendations or suggested executive, legislative, or regulatory changes to ensure a resilient supply chain that DOT/USG should consider, including means to collaborate more effectively across government agencies and suggestions based on state and international models
• Recommended actions by non-Federal entities, including State and local governments, private firms, labor, and other participants in the freight and logistics sector that could be encouraged by DOT/USG.

NAMM Members are urged to submit comments by the Oct. 18 deadline, as follows:

1. Go to http://www.regulations.gov
2. Search by using the docket number (DOT-OST-2021-0106) and follow the instructions for submitting comments
3. Note: All comments received, including any personal and company information, will be publicly posted as submitted, open to public inspection online. It may take several business days before your submission is posted.
4. For further information contact: Ryan Endorf at ryan.endorf@dot.gov or at 202-366-4835.

September 30, 2020: FTC Considering “Made in the USA” Rule

The Federal Trade Commission is considering a proposal to, in effect, codify more than 20 years of enforcement decisions into a broadly-applicable rule setting out when sellers can make unqualified claims that a product is "Made in the USA."

The proposed rule, designed to deter deceptive claims and provide marketers with certainty as to the agency's enforcement approach, would prohibit marketers from making unqualified Made in the USA claims on labels unless (1) final assembly or processing of the product occurs in the US, (2) all significant processing that goes into the product occurs in the US, and (3) all or virtually all ingredients or components of the product are made or sourced in the US. All three criteria must be present to make an unqualified Made in the USA claim.

The new regulation is expected to take effect next year, however at this writing, an implementation date has not been set. NAMM will continue to monitor and report on this issue. Text of the proposed rule.

March 18, 2020: NAMM and the Americans for Free Trade Coalition Urge Swift Tariff Policy Relief

A coalition of 160 retailers, including NAMM and manufacturers and other business groups, hit hard by the tariffs and foreign retaliation, sent a letter to President Trump urging him to take “swift action on a policy that would provide tax relief to millions of American farmers, manufacturers, families, and consumers without having to wait on action from Congress.”

The U.S. still has 7.5 percent and 25 percent duties on more than $350 billion worth of Chinese goods, although the two countries signed a phase one trade agreement in January. Those duties have been left in place as leverage to obtain additional Chinese concessions in a phase two negotiation that has been expected to begin this year — at least before the coronavirus outbreak.

March 2, 2020: The New United States-Mexico-Canada Agreement (USMCA)

On November 30, 2018, the United States reached an agreement with Mexico and Canada in the renegotiation of the North American Free Trade Agreement. While the United States, Mexico, and Canada have completed a new agreement, NAFTA currently remains in effect. Each country must now follow its domestic procedures before the agreement can be ratified and take effect. It is expected that Canada will ratify the USMCA next month.

The Congressional Research Service prepares briefings for Members of Congress. You may access the Congressional Research Service’s ‘NAFTA and the USMCA Summary” to learn more about the agreement.

Of note:

• Pg. 26 Digital Trade
• Pg. 27 Intellectual Property Rights (IPR)
• Pg. 28 Patents
• Pg. 29 Copyrights and Trademarks
• Pg. 30 Trade Secrets and Geographical Indications (GIs)
• Pg. 31 IPR Enforcement and Cultural Exemptions

View the full text of the agreement between the United States, Mexico, and Canada.

View the USMCA webpage.

NAMM monitors trade issues and provides periodic updates on advocacy efforts and pending legislation. Please visit this page regularly.

February 10, 2020: List 4A Reduction CSMS Message, Additional List 3 Exclusions Granted

U.S. Customs and Border Protection has issued a Cargo Systems Messaging Service message regarding the February 14 reduction of the List 4A tariffs from 15% to 7.5%, providing guidance for the updated Customs procedures.

On January 31, 2020, the United States Trade Representative ("USTR") issued a further round of product exclusions pertaining to the Section 301 List 3 currently subject to a 25% tariff. The new list includes 52 specifically crafted product descriptions that cover 117 separate exclusion requests. The products affected include seafood, bicycles and bicycle tires, printed circuit boards, and faucets and valves of various metals. The exclusions are retroactive to when the tariffs were implemented on September 24, 2018 and will expire on August 7, 2020. This is the eighth round of tariff exclusions for List 3.

On February 4,The Wall Street Journal reported that the USTR had granted about 35% of the exemption requests for List 1 and 2 while only 3% of List 3 exemption requests had been granted. NOTE: According to a Mercatus Center update from December, exemption requests for Lists 1 and 2 totaled approximately 14,000, while exemption requests for List 3 totaled over 30,000. According to that report, only 5,000 of the 30,000 List 3 requests had been adjudicated; however, the WSJ’s initial 3% figure reflects those requests easiest to discard such as improperly submitted requests, etc., while more steps are required to arrive at an approval decision.

Current tariff snapshot:

• Products on HTC lists 1, 2, and 3, are currently tariffed at 25%
• Products on HTC list 4A (stringed instruments, pianos, wind instruments, percussion, keyboards, accessories and more) are currently subject to a 7.5% tariff
• Products on HTC list 4B (some stringed instruments, stands and some accessories) are not currently subject to additional tariffs

NAMM will continue to closely monitor this issue. Please check here often for updates and new resources.

NAMM’s Field Report: short conversations with NAMM members engaged in advocacy on issues impacting their business and the music products industry at large.

LISTEN: Mike Kamphuis, managing director of Conn-Selmer’s division of education, speaks about meeting with Mike Dankler, chief of staff to his congressional representative, Jackie Walorski on the topic of future tariffs that will likely affect his business in Elkhart, Indiana.

2020 NAMM Show Policy Forum

Industry experts provide industry-specific policy updates on revised CITES permit requirements, remote sales tax, Prop 65, Chinese tariffs and NAMM Fly-In plans. Moderated by Mary Luehrsen, Director, Public Affairs and Government Relations, NAMM. Panelists: Jim Goldberg, Managing Partner, Goldberg & Associates, PLLC; Heather Noonan, Vice President for Advocacy, League of American Orchestras; Chris Cushing, Managing Director, Federal Strategies, Nelson Mullins Riley & Scarborough; and Leo Coco, Managing Director, Education Policy, Nelson Mullins Riley & Scarborough.

Watch the Recorded Forum

Timestamp / Segment

• :01 Welcome and Overview
• :55 CITES
• 10:40 Prop 65
• 23:55 E-Commerce
• 33:33 Tariffs
• 43:54 Music Education

Industry experts review the current tariff exemption process for lists 4A and 4B that include musical instruments and accessories. NAMM members share their own experience with the exemption request process, and updates on trade negotiations provided. Access the complete recording and view the Nov. 5 Webinar Q&A summary.

Recording timestamp key:

• 3:40      Chinese Tariffs: Background and Current State of Play
• 8:10      The Exclusion Request Process: Step-by-Step
• 20:24     NAMM Member Field Report: Gator Cases Exclusion Request
• 31:10     Contacting Your Member of Congress
• 35:00     Policy Rationale Talking Points

The Office of the U.S. Trade Representative announced this week that it will establish a process for U.S. businesses to request an exclusion from tariffs placed on products on the HTS code lists 4A and 4B. Products on list 4A (stringed instruments, pianos, wind instruments, percussion, keyboards, accessories and more) are currently subject to a 15% tariff; products on list 4B (some stringed instruments, stands and some accessories) will be subject to a 15% tariff beginning on Dec. 15, 2019.  The web portal for submitting exclusion requests for products on lists 4A and 4B will be open from Oct. 31, 2019 until Jan. 31, 2020.

August 26, 2019: New Tariffs Starting September 1st - NAMM Joins Call for Immediate Resolution

Aug. 26, 2019: NAMM, together with the National Retail Federation, US Chamber of Commerce, corporations and businesses, calls for an immediate resolution to the current—and ever-changing trade war and Chinese tariff threats. Current actions—actual and anticipated—dramatically impact economic stability in the music products industry and across other industries and ultimately impact consumer buying power and economic stability.

Tariff actions are being made unilaterally by the executive branch (president and his trade personnel) in its legal capacity to advance and align national security interests. Currently, there is no regular order for direct appeals for exemptions beyond those submitted in June to the US Trade Representative.

August 23, 2019: U.S. Proposes Additional Tariffs on Imports from China

Aug. 23, 2019: Late this afternoon President Trump posted a series of tweets announcing the next wave of Tariffs on goods coming from China: Starting on October 1st, the $250 billion of goods and products from China, currently subject to a 25% tariff, will now incur a 30% tariff. The remaining $300 billion of goods and products from China subject to a 10% tariff from September 1st, will now incur a 15% tariff.

The September 1st 15% tariffs will be in effect on consumer products, including musical instruments as outlined in the Musical Instruments HTS list 4A linked below.  Tariffs have been delayed to Dec. 15, 2019, on certain products including cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing, including some musical instruments as outlined in the Musical Instruments HTS list 4B linked below.

In Summary:

• Lists 1, 2, and 3, all currently tariffed at 25%, will rise to 30% on October 1, 2019
• List 4A, set to take effect on September 1 at 10%, will now be 15% on September 1, 2019
• List 4B, set to take effect on December 15 at 10%, isn’t mentioned to date

Resources: 

• HTS Code Lists 4A and 4B Here
• NAMM's June 14 Letter to USTR 
• Music Product Imports to the United States. Source: NAMM 2018 Global Report.
• Official notice of the implementation of the 10% tariff on Chinese-made products on 9/1 and 12/15.

Update, 8/6/19: The US and China Tentatively Agree to a Trade War Truce

The United States and China have tentatively agreed to another truce in the trade war, sources said, a move that would avert an additional $300 billion of U.S. tariffs on Chinese imports. President Donald Trump and Chinese President Xi Jinping are set to meet this week at the Group of 20 summit in Japan, and a source said Trump's decision to delay additional tariffs was Xi's price for holding the meeting. Read the full Politico article.

UPDATE: June 14, 2019 - NAMM highlights the negative impact of proposed tariffs on our industry, US consumers, and the short and long-term implications for music education.  Read the full letter..

661 US Companies and Associations Urge Administration to Avoid Tariff Escalation, Reach Resolution with China

WASHINGTON — Tariffs Hurt the Heartland, the national campaign against tariffs supported by more than 150 trade associations representing retail, tech, manufacturing and agriculture, today sent a letter signed by 661 American companies and associations urging the administration to avoid additional tariffs and reach a resolution with China. The letter comes as the Office of the United States Trade Representative is set to begin hearings considering 25 percent tariffs on $300 billion in goods, 60 percent of which are consumer products. 520 companies signed the letter, including some of the nation’s most recognizable brands, and 141 trade associations at the national and state level.

“We remain concerned about the escalation of tit-for-tat tariffs," the letter states. “We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy. Broadly applied tariffs are not an effective tool to change China’s unfair trade practices. Tariffs are taxes paid directly by U.S. companies, including those listed below - not China.”

"We urge your administration to get back to the negotiating table while working with our allies to develop global, enforceable solutions. An escalated trade war is not in the country’s best interest, and both sides will lose,” the companies and associations added.

Tariffs Hurt the Heartland recently released estimates prepared by Trade Partnership Worldwide that showed that imposing new tariffs on an additional $300 billion in goods (combined with the impacted of previously implemented tariffs and retaliation) would result in the loss of more than 2 million U.S. jobs, add more than $2,000 in costs for the average American family of four and reduce the value of U.S. GDP by 1.0 percent.

Below is the full text of the letter. Read a copy online and the list of signers. 

June 13, 2019

President Donald J. Trump
The White House
1600 Pennsylvania Avenue
Washington, DC 20500

Dear Mr. President,

On behalf of the undersigned companies below and the millions of workers we employ, we are writing regarding the ongoing trade dispute between the U.S. and China. We agree that our trading partners must abide by global trade rules, and we support the administration’s efforts to address unfair trading practices, including intellectual property violations, forced technology transfer and more. We encourage the administration to negotiate a strong deal with China that addresses longstanding structural issues, improves U.S. global competitiveness and eliminates tariffs. We believe this goal can be achieved without taxing Americans.

We remain concerned about the escalation of tit-for-tat tariffs. We know firsthand that the additional tariffs will have a significant, negative and long-term impact on American businesses, farmers, families and the U.S. economy. Broadly applied tariffs are not an effective tool to change China’s unfair trade practices. Tariffs are taxes paid directly by U.S. companies, including those listed below— not China. According to Trade Partnership Worldwide LLC, 25 percent tariffs on an additional $300 billion in imports (combined with the impact of already implemented tariffs and retaliation) would result in the loss of more than 2 million U.S. jobs, add more than $2,000 in costs for the average American family of four and reduce the value of U.S. GDP by 1.0 percent. Furthermore, we have seen repeatedly that tariff increases and uncertainty around these trade negotiations have created turmoil in the markets, threatening our historic economic growth.

Mr. President, we support your efforts to hold our trading partners accountable, level the playing field for American businesses and forge enforceable trade agreements. We urge your administration to get back to the negotiating table while working with our allies to develop global, enforceable solutions. An escalated trade war is not in the country’s best interest, and both sides will lose. We are counting on you to force a positive resolution that removes the current tariffs, fosters American competitiveness, grows our economy and protects our workers and customers.

Sincerely,

CC: Ambassador Robert Lighthizer, United States Trade Representative

Secretary Steven Mnuchin, Department of the Treasury

Secretary Wilbur Ross, Department of Commerce

Secretary Sonny Perdue, Department of Agriculture

Director Larry Kudlow, National Economic Council

CONTACT:

Matt McAlvanah (Matt@TariffsHurt.com)

Or

Melanie Lehnhardt (Melanie@TariffsHurt.com)

Chinese Trade Tariff Updates

Tariff List #4 - Inclusion of Musical Instruments

May 13, 2019: USTR has posted the draft Federal Register notice announcing the proposed HTS lines and the process for the proposed List 4 China 301 tariffs. The proposed 25% tariffs cover approximately $300 billion worth of imports from China. This includes just about everything that isn’t already subject to the additional 301 tariffs such as apparel, footwear, toys, consumer electronics and musical instruments.  Note: the list includes everything in HTS category 9200 (musical instruments and related accessories) View the list.  

USTR will hold a public hearing on June 17 on the proposed List 4 tariffs. All requests to testify must be submitted by June 10. Final comments must be submitted seven days after the final hearing date. Considering the List 3 tariffs ($200 billion) was six days long, this hearing process may go longer. President Trump plans to meet with President Xi during the G-20 Summit at the end of June. It is unlikely that a final decision on the List 4 tariffs will be made before that meeting.

Questions/Comments: For questions about this proposed action, to submit public comment, or to request to testify at the June 17 public hearing, contact USTR Assistant General Counsels Arthur Tsao or Megan Grimball, or Director of Industrial Goods Justin Hoffmann at USTR (202) 395–5725. For questions on customs classification, contact traderemedy@cbp.dhs.gov.

Notice of Modification of Section 301 Action

May 10, 2019

The United States Trade Representative's office has published an official notice implementing President Trump's announced plan to increase tariffs on some $200 billion worth of Chinese imports from 10% to 25%, effective at 12:01 a.m. on May 10.  While musical instruments are not directly affected by this increase, the list of affected products includes musical instrument cases, certain stands used for guitars and other musical instruments and some circuit board components of electronic instruments. Note: Products which left China prior to May 10 must arrive into the United States no later than June 1 to avoid the 25% tariff.

Comments: For NAMM members wishing to express concern, please see the option to participate in the National Retail Federation’s “call to action” at the link here.

The U.S. Chamber of Commerce (USCC) is the world’s largest business organization representing the interests of more than 3 million businesses of all sizes, sectors, and regions. USCC members range from mom-and-pop shops and local chambers to leading industry associations and large corporations. 

Trade Tariff Resources 

Forms and Instructions for submitting requests for product exclusions:

• List of Products Impacted
• Exclusion Process FAQs
• Product Exclusion Form
• Detailed Instructions

Source: www.ustr.gov 

The National Retail Federation is the world’s largest retail trade association. Based in Washington, D.C., NRF represents discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries. 

Trade Tariff Updates

Instructions for submitting Public Comments

• View the Comment form.
• Enter your comments, attach files (up to 10MB each), as well as your personal information when applicable. Complete all the required fields.
• Discover tips for submitting effective comments.
• Please note that information entered on the web form may be viewable publicly. These fields are identified by the globe icon.
• Once you reach the "Your Preview" screen, the information that will be viewable publicly is displayed directly on the form under the section titled: "This information will appear on Regulations.gov."
• To complete your comment, you must first agree to the disclaimer and check the box. This will enable the "Submit Comment" button.
• Upon completion, you will receive a Comment Tracking Number for your comment.

Source: www.regulations.gov

Take 2 minutes to let your representatives know that you have concerns with the proposed tariffs on products, materials and component parts from China. 

View the Template.