President Trump signed Executive Order 13936 on July 14th eliminating Hong Kong’s preferential trade status due to the determination that Hong Kong is no longer sufficiently autonomous to justify differential treatment in relation to China.
At the time the Executive Order was signed, it had not been determined how marking of goods would be affected or if additional tariffs would be imposed.
U.S. Customs and Border Protection (CBP) issued a notice on August 11, notifying the public that goods may no longer be marked to indicate “Hong Kong” as their origin, but must be marked to indicate “China”.
A 45-day transition period will be granted for importers to comply with this change, which will take effect for goods entered or withdrawn from warehouse for consumption on or after Sept. 25. During this period, personnel from the Ports of Entry and Centers of Excellence and Expertise (CEE) are directed to neither issue marking notices, nor take further enforcement actions on goods produced in Hong Kong.
Once the transition period is over, CBP will initiate a 45-day informed compliance period ending on November 9th in which CBP will not take enforcement action over compliance with new provisions except for egregious violators.
CBP confirmed the change in marking does not affect the country of origin used to assess duty, so Hong Kong origin goods would still enter using country code ‘HK’, and would not be subject to Section 301 duties assessed on Chinese origin goods.
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