U.S. Customs and Border Protection (CBP) has announced that products produced in Hong Kong will have to be marked as made in China. CBP will grant importers a 45-day transition period to implement the origin marking changes and all goods entered into the U.S. or withdrawn from warehouse for consumption after September 25, 2020 will need to comply. Failure to mark an article from Hong Kong as Chinese origin, in accordance with the requirements of 19 USC 1304, will result in the levy of a 10% ad valorem duty.
The announcement comes in response to President Trump’s July 14 Executive Order on Hong Kong Normalization, which ordered that appropriate actions must be commenced by relevant agencies within 15 days of publication of the Executive Order. Trump issued the order to end Hong Kong’s special trade status after determining that Hong Kong is no longer sufficiently autonomous from China to justify differential treatment. Under the order, the U.S. will now treat Hong Kong “the same as mainland China” and there will be ““no special privileges, no special economic treatment.”
This change also raises concerns that goods produced or substantially transformed in Hong Kong will become subject to the Section 301 tariffs that the U.S. has levied against products from China. With the escalation of events playing out with China and Hong Kong, we believe there is significant risk of continued efforts by the Trump Administration to impose political and economic pressure on China and to rescind Hong Kong’s status as a separate customs territory.
Click here to view the full notice published in the Federal Register.
OCEANAIR is actively monitoring the situation in Hong Kong and will continue to provide status updates as they become available.