IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

firm-specific

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 16 Aug 2017 | Removal date: open ended
Still in force

Import tariff

In a ruling issued on August 16, 2017, the Court of International Trade (CIT) effectively reduced the tariff on one make of vehicle from 25% (the rate that applied to pick-up trucks and similar vehicles) to 2.5% (the rate applied to cars). In its decision (Slip Opinion 17-102) in the case of Ford Motor Co. v. United States, the CIT agreed with Ford Motor Company that a vehicle called the Transit Connect is properly classifiable as a passenger vehicle. Some legal analysts see this case as an example of a practice known as “tariff engineering” (i.e., the structuring of products so as to achieve favorable duty treatment).

Ford developed both van and passenger models from a passenger vehicle that was being sold in Turkey. The passenger model was delivered to U.S. customers as imported, but Ford changed the van version after customs clearance by making certain modifications that (the firm contended) still qualify the product as a low-tariff passenger vehicles rather than a high-tariff cargo vehicle. Customs and Border Protection had ruled that the van version should be classified as cargo-carrying and hence subject to the 25% tariff, but the CIT sided with Ford for a number of reasons (e.g., a review of the structural and auxiliary features of the vehicle and the fact that many of the same features in the van version were also found in the passenger version).

AFFECTED COUNTRIES

MAP
TABLE
EXPORT

AFFECTED SECTORS AND PRODUCTS

491 Motor vehicles, trailers & semi-trailers; parts
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 87.02), including station wagons and racing cars.
870332 Of a cylinder capacity exceeding 1,500 cc but not exceeding 2,500 cc

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