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U.S. Ends Differential Treatment for Hong Kong

posted by Jennifer Diaz August 19, 2020 3 Comments

On Tuesday, August 11, 2020, United States Customs and Border Protection (CBP) announced via Federal Register Notice that all items made in Hong Kong and destined for the U.S. must now indicate “China” as the country of origin.

Hong Kong’s unique political situation as an autonomous city-state initially called for specially tailored laws and regulations governing items imported into the United States. For more than 20 years the US recognized the separation between China and Hong Kong, evidenced by the requirements to distinguish between the two. Additionally, in light of the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation; as well as the regime’s human rights and forced labor abuses, the United States is especially keen on identifying items produced in China.

On July 14, 2020, the President signed an Executive Order on Hong Kong Normalization. The Order states that China’s unilateral and arbitrary imposition of national security legislation on Hong Kong in May 2020, “was merely China’s latest salvo in a series of actions that have increasingly denied autonomy and freedoms that China promised to the people of Hong Kong under the 1984 Joint Declaration of the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the People’s Republic of China on the Question of Hong Kong (Joint Declaration)”.

China’s forced absorption of the formerly sovereign city has led to, “the determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to China”. In this vein, the August 11th Federal Register Notice details the administration’s decision to suspend the application of section 201(a) of the United States-Hong Kong Policy Act of 1992 and section 304 of the Tariff Act of 1930, with respect to imported goods produced in Hong Kong. 

In practice, this means that all goods produced in Hong Kong and destined for the United States are now to be marked as items “Made in China”. Although the announcement is technically applicable as of July 29, 2020, there is an implementation transition period for importers, which ends on September 25, 2020.

The administration has not yet clarified, although we can reasonably imply that items imported from Hong Kong, once legally marked with a country of origin as “Made in China” will now be subjected to China Tariffs. For background information on China Tariffs and numerous ways to mitigate the effect of the China tariffs, check out our previous blogs. Diaz Trade Law has assisted clients in assessing their best options to prepare or mitigate the China tariffs and submitted comments and exclusion requests. Our Customs and International Law attorneys are available at 305-456-3830 or info@diaztradelaw.com.

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