Section 301 Digital Services Tax – Additional 25% on imports from France

On June 2, 2020, the United States Trade Representative gave notice of the initiation of Section 301 investigations of Digital Services Taxes (DSTs) and asked for public comments until July 15, 2020. The investigation focused on discrimination against U.S. companies retroactively and possibly unreasonable tax policy. Originally, the USTR proposed to impose additional tariffs of up to 100 percent on products from France to be drawn from a list of 63 tariff subheadings with an import value of about $2.4 billion. On July 16, 2020, the USTR has announced its plans to impose a 25 percent additional tariff on 21 tariff subheadings with a new import value of about $1.3 billion. The tariff won’t go into effect just yet. It will be suspended for 180 days to allow additional time for discussions on the matter.

The subheadings include:

• 3304.10.00 (lip makeup preparations)
• 3304.20.00 (eye makeup preparations)
• 3304.30.00  (manicure or pedicure preparations)
• 3304.91.00 (beauty or makeup powders, whether or not compressed)
• 3304.99.50 (beauty or makeup preparations and preparations for the care of the skin, excluding medicaments but including sunscreen or sun tan preparations, not elsewhere specified or included)
• 3401.11.10 (castile soap in the form of bars, cakes, or molded pieces or shapes)
• 3401.11.50 (soap, not elsewhere specified or included; organic surface-active products used as soap, in bars, cakes, pieces, soap-impregnated paper, wadding, felt, for toilet use)
• 3401.19.00 (soap; organic surface-active products used as soap, in bars, cakes, pieces; soap-impregnated paper, wadding, felt, not for toilet use)
• 3401.20.00 (soap, not in the form of bars, cakes, molded pieces, or shapes)
• 3401.30.10 (organic surface-active products for washing skin, in liquid or cream, containing any aromatic/mod aromatic surface-active agent, put up for retail)
• 3401.30.50 (organic surface-active products and preparations for washing the skin, in liquid or cream form, put up for retail sale, not elsewhere specified or included)
• 4202.21.30 (handbags, with or without shoulder strap or without handle, with outer surface of reptile leather)
• 4202.21.60 (handbags, with or without shoulder strap or without handle, with outer surface of leather, composition or patent leather, not elsewhere specified or included, not over $20 each)
• 4202.21.90 (handbags, with or without shoulder strap or without handle, with outer surface of leather, composition or patent leather, not elsewhere specified or included, over $20 each)
• 4202.22.15 (handbags, with or without shoulder straps or without handle, with outer surface of sheeting of plastics)
• 4202.22.40 (handbags with or without shoulder strap or without handle, with outer surface of textile materials, wholly or in part of braid, not elsewhere specified or included)
• 4202.22.45 (handbags with or without shoulder strap or without handle, with outer surface of cotton, not of pile or tufted construction or braid)
• 4202.22.60 (handbags with or without shoulder strap or without handle, outer surface of vegetable fibers, excluding cotton, not of pile or tufted construction or braid)
• 4202.22.70 (handbags with or without shoulder strap or without handle, with outer surface containing 85 percent or more of silk, not braided)
• 4202.22.81 (handbags with or without shoulder strap or without handle, with outer surface of manmade fiber materials)
• 4202.22.89 (handbags with or without shoulder strap or without handle, with outer surface of textile materials, not elsewhere specified or included)

What to do

Scarbrough Consulting, Inc. is offering a free 30-minute consultation to any company that may be affected by the Section 301 announcements.  Please send an email to consulting@scarbrough-intl.com or fill out the form below.  Our Global Trade Experts and Licensed Customs brokers are here to help.

Free Consulting

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

About Scarbrough

Scarbrough Global of Companies, headquartered in Kansas City with local presence in every major port in the world, is a complete international and domestic supply chain service provider, offering U.S., Mexican, and Canadian Customs brokerage, Import & Export Transportation Solutions, Domestic brokerage and asset-based trucking, Warehouse fulfillment and distribution services, Trade Compliance Consulting, Large Equipment and Project Cargo moves, as well as Parcel Audit Savings.  Scarbrough is widely known for its trade experts, training, personalized customer service, and customized solutions.  Since 1984, Scarbrough has continued to satisfy its clients by following its motto on a daily basis: “It is our job to make your job easier.”  Moreover, our team of experts is available at your disposal.  We offer free consultations on any topic from supply chain optimization and duty savings opportunities to the basics, helping to guide new importers and exporters as they jump into the world of global trade.  Contact us now.