Screwdriver Assembly and Tariff Truths

The Cotton Board provides a reimbursement program for importers who pay assessments on imported cotton that was produced in the U.S. or is other than Upland cotton. This is done to ensure that importers are not assessed twice on the same cotton. ?

Here's how the reimbursement process works:

1. Application Form: Importers need to obtain a reimbursement application form from the Cotton Board. This can be done by submitting a written request to the Cotton Board. ?
2. Submission of Application: The completed application form must be mailed to the Cotton Board within 180 days of the date the assessments were paid. ?
3. Required Information: The application should include the following information: Importer's name, address, phone number, and Customs Service identification number Weight of the cotton in each HTS category for which the reimbursement is requested Subtotal amounts to be reimbursed for each HTS number and grand total to be reimbursed ? Date or inclusive dates on which the assessments were paid Name of the port of entry Certification by the importer that the cotton was grown in the U.S. or is other than Upland cotton
4. Proof of Payment: A copy of the Customs entry form and the commercial invoice filed with the Customs Service must be submitted as proof of payment. ?
5. Joint or Separate Applications: If multiple importers shared in the assessment payment, they can file joint or separate reimbursement applications. In either case, the application must show the names, addresses, and proportionate shares of assessments paid by all importers. ?

Now - let's take a look at a Tariff that is already in place to begin to understand what Trump is talking about when he mentions Tarrifs.

The Harmonized Tariff Schedule (HTS) classification for cotton is Chapter 52 of the HTS.?The HTS classification numbers for imported cotton and cotton products are used to determine assessments.?The assessment for imported cotton is based on the HTS classification number, a conversion factor, and the total assessment per kilogram.?

?Here is some related information about cotton assessments:

• Assessment rate

As of October 16, 2023, the assessment rate for imported cotton is $0.014691 per kilogram.?

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• Conversion factor

The conversion factor is used to determine the raw fiber content for each kilogram of the HTS.?HTS numbers for raw cotton do not have a conversion factor.?

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• Supplemental assessment

In addition to the assessment rate, there is also a supplemental assessment that is equal to 5/10 of one percent of the current value of the cotton.?

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• HTS number changes

If an HTS number is changed, but the physical properties, description, or cotton content of the product does not change, the assessment will continue to be based on the new number.?

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?Wait - how many other tariffs are in place right now?

??The exact number of tariffs imposed by the United States is difficult to pinpoint due to several factors:

1. Harmonized Tariff Schedule (HTS): The HTS is a complex system that classifies imported goods into thousands of categories, each with its own tariff rate. These rates can change frequently due to trade agreements, special tariffs, and other factors. Estimating the exact number of tariff lines is challenging and would require a detailed analysis of the HTS.
2. Additional Tariffs and Duties: Beyond the HTS, there are various other tariffs and duties imposed on imported goods, such as: Anti-dumping duties Countervailing duties Section 232 tariffs (e.g., on steel and aluminum) Section 301 tariffs (e.g., on Chinese goods) These tariffs are imposed on a case-by-case basis and can change over time.
3. Trade Agreements: The United States has numerous trade agreements with other countries, which often involve preferential tariff rates or duty-free access for certain goods. These agreements can significantly impact the number of tariffs applied to specific products.

Therefore, it's not feasible to provide a precise number of tariffs. However, it's safe to say that the United States imposes thousands of tariffs on imported goods, and the number can fluctuate based on various economic and political factors.

?Now - let's take a look at how the companies and industries for which tariffs are created actually avoid already tight tariffs -

When an American auto manufacturer imports an entire engine from Mexico that has one bolt left to tighten, then has a worker tighten the bolt, what is the reason for allowing that auto manufacturer to state that the engine was assembled in the United States?

This practice is often referred to as "screwdriver assembly" or "value-added manufacturing." It's a strategy used to take advantage of preferential trade agreements or tariff reductions that favor goods manufactured domestically.

Here's how it works:

1. Importation: The auto manufacturer imports a nearly complete engine from Mexico.
2. Minimal Assembly: A single worker in the U.S. performs a minimal amount of assembly, such as tightening a bolt.
3. "Made in the USA" Label: Because the final assembly step occurred in the U.S., the manufacturer can label the engine as "Made in the USA."

This practice is controversial for several reasons:

• Misleading Consumers: It can mislead consumers into believing that the engine was entirely manufactured in the U.S., even though most of its value was added in Mexico.
• Trade Policy Abuse: It can be seen as a way to circumvent trade regulations and import duties.
• Limited Economic Impact: The minimal amount of labor added in the U.S. creates limited economic benefits compared to full domestic production.

While this practice is technically legal under current trade rules, it raises questions about the true meaning of "Made in the USA" and the fairness of international trade.