Shutdown Fallout, 232 Lumber Tariffs, and BIS’s 50% Rule: This Week’s Trade Compliance Priorities
NEWSLETTER | Trade Insight AI
Shutdown Reshapes Trade: CBP Operational, FMC Shuttered, ITC Pauses Probes
STR Trade Report • October 3, 2025
A federal shutdown effective Oct. 1 leaves core CBP operations—tariff collection, cargo processing, rulings, and FPF—running, but slowdowns at partner government agencies could delay import and export clearances. Commerce halts most ITA, Census, BEA, and EDA work while continuing export enforcement and Section 232 matters; USTR negotiations proceed; the ITC maintains the HTS and active litigation but pauses AD/CVD, Section 337, and safeguard investigations. The FMC is fully furloughed (no service contract filings, OTI licensing updates, or agreement submissions), DDTC licensing is significantly curtailed, and CPSC suspends import surveillance and most recalls—requiring traders to plan for filing backlogs and delayed regulatory actions.
Tariffs and Market Access Shifts
AGOA, Haiti Apparel Preferences Expire; MFN Duties, IEEPA Tariffs Triggered
STR Trade Report •October 2, 2025
The African Growth and Opportunity Act and Haiti’s HOPE/HELP apparel programs lapsed Sept. 30, immediately subjecting covered imports to MFN duties and “reciprocal” tariffs under IEEPA. The lapse affects 32 AGOA beneficiaries and ends duty-free access that supported $9.7 billion in AGOA imports in 2023, including $1.1 billion in apparel. Bipartisan talks and White House backing suggest a one-year, potentially retroactive extension by year-end, but importers face near-term duty exposure and cash‑flow impacts until legislation passes.
U.S. Imposes 232 Tariffs on Lumber; Cabinets Up to 50%
STR Trade Report •October 1, 2025
President Trump’s Sept. 29 proclamation imposes Section 232 tariffs effective Oct. 14, 2025: 10% on softwood lumber, 25% on upholstered wood products (rising to 30% Jan. 1, 2026), and 25% on kitchen cabinets/vanities and parts (rising to 50% Jan. 1, 2026). Rates are capped at 10% for U.K. goods and a 15% combined 232+MFN for EU and Japan, with products defined by HTSUS subheadings and duties stacking with MFN and AD/CVD unless excluded. Operationally, FTZ admissions after Oct. 14 must be privileged foreign; most Chapter 98 benefits remain except 9802.00.60, auto 232 won’t double-stack, IEEPA tariffs are waived, and potential expansion/adjustments are pending with USTR reports due Jan. 1 and Mar. 29, 2026 and a Commerce review by Oct. 1, 2026.
U.S. Eyes Chip-Based Tariffs; China Shifts WTO Status; New FTAs
STR Trade Report •October 2, 2025
The U.S. is weighing Commerce-imposed tariffs on imported electronics tied to the value of their semiconductor content, a novel structure that could reprice a broad swath of tech goods and complicate rules-of-origin planning. Canada says stalled bilateral talks will shift into the USMCA review while it signs an FTA with Indonesia, as China both renounces developing-country flexibilities at the WTO and adds three U.S. entities to its export control list with immediate effect. Expect tighter tech-trade controls, evolving North American market access, and new Asia options to offset tariff risk.
CBP Keeps Q4 Duty Interest Rates: 7% Underpayments, 6–7% Refunds
STR Trade Report •October 2, 2025
CBP confirmed the IRS quarterly interest rates for Oct. 1–Dec. 31, 2025: 7% for duty underpayments (all filers) and 6% for overpayment refunds to corporations, 7% for non-corporations. The rates are unchanged since Jan. 1, 2025, guiding importers’ interest calculations on reconciliations, reliquidations, protests, and refunds through year-end.
Export Controls and Tech Trade
BIS Adopts OFAC-Style 50% Rule for Entity/MEU Lists
STR Trade Report •October 2, 2025
BIS issued an interim final rule effective Sept. 29 applying a 50% ownership test to the Entity List and Military End-User List, automatically extending license requirements to foreign affiliates majority-owned by listed parties—aligning with OFAC’s long-standing approach. The change elevates due diligence expectations: significant minority ties are red flags, exporters must resolve opaque ownership or seek a license, and the Consolidated Screening List will no longer capture all impacted affiliates. Comments are due Oct. 29, and a temporary general license allows some otherwise restricted transactions through Nov. 28.
BIS Rolls Back 2024 Firearms Tightening, Eases Exports, Retains New ECCNs
STR Trade Report •October 3, 2025
BIS issued a final rule rescinding its May 2024 interim firearms rule, eliminating the presumption of denial for 36 countries and restoring the prior licensing posture. Most pistols, rifles, and non‑long‑barrel shotguns still require worldwide export licenses, but long‑barrel shotguns and most optics can ship license‑free to U.S. allies and certain partners, with licensing paperwork streamlined to standard BIS practice. BIS is retaining four new ECCNs (0A506–0A509) and the requirement to include ECCN item paragraph or other control descriptors in EEI filings.
CBP Moves Wireless Headsets and Earbuds to 8518.30.20 Classification
STR Trade Report •October 3, 2025
CBP, via HQ H346387 in the Sept. 24 Customs Bulletin, will reclassify certain wireless headphones, mobile earphones, and true‑wireless earbuds from HTSUS 8517.62.00 to 8518.30.20, effective for entries on or after Nov. 24, and will revoke HQ H251033 and NY N308565. CBP found these composite devices’ principal function is sound reproduction; while both provisions are MFN duty‑free, importers should update classifications and assess impacts on any additional duties, trade program eligibility, and compliance reporting.
CBP, AGMA partner to deploy smartphones for IP inspections at ports
CBP Media Releases •September 30, 2025
CBP formed a public‑private partnership with the Alliance for Gray Market and Counterfeit Abatement to equip officers with AGMA‑donated “OneDevice” smartphones—plus data plans, licenses, training, and support—for intellectual property inspections nationwide. The tools aim to speed and improve product authentication, potentially expediting clearance for genuine tech goods while increasing interdictions of counterfeits. Importers of covered brands should expect tighter scrutiny and ensure robust documentation and brand‑owner verification processes.
Trade Remedies and Disputes
U.S. imposes new AD/CVD orders; steel cases span 10 nations
STR Trade Report •October 2, 2025
U.S. authorities issued AD/CVD orders on sol‑gel alumina-based ceramic abrasive grains from China (effective Sept. 29) with an 88.32% dumping margin and 165.05% subsidy rate, and an AD order on paper file folders from Sri Lanka with dumping margins of 57.43% and 91.28%. The ITC returned final affirmative injury findings for corrosion‑resistant steel from Australia, Brazil, Canada, Mexico, the Netherlands, South Africa, Taiwan, Türkiye, the UAE, and Vietnam (AD) and for Brazil, Canada, Mexico, and Vietnam (CVD), paving the way for AD/CVD orders and cash deposits. It also issued final injury determinations on slag pots from China and preliminary affirmative determinations on high‑purity dissolving pulp from Brazil and Norway (AD) and Brazil (CVD), signaling continued exposure for importers and the need to reassess sourcing and pricing.
AD/CVD Roundup: Chassis, Molded Fiber Face Steep Rates; Solar Relief
STR Trade Report •October 3, 2025
Commerce issued preliminary AD determinations on chassis from Mexico, Thailand, and Vietnam, triggering new cash deposits of 0% (Mexico, adjusted for subsidy offset), 4.12% and 181.57% (Thailand), and 511.16% (Vietnam). Final AD/CVD determinations on thermoformed molded fiber products set AD margins up to 477.97% and subsidy rates up to 319.92% for China and Vietnam; the Brazil raw honey review posted 3.94–12.13%, and an amended review set 14.35% for Chinese multilayered wood flooring (2019–2020). Commerce also signaled intent to revoke China CSPV orders for certain off‑grid panels, potentially easing supply for niche solar applications.
WTO panel report out on EU AD/CVD for Indonesian stainless steel
WTO Latest News •October 2, 2025
The WTO has circulated the panel report in DS616 concerning the EU’s anti-dumping and countervailing duties on Indonesian stainless steel cold‑rolled flat products. The decision could shape whether the EU must revise or maintain these measures; parties have 60 days to appeal before potential DSB adoption. Traders should monitor for possible changes to duty exposure, cash deposits, and pricing in EU–Indonesia stainless supply chains.
EU Appeals Indonesian Biodiesel CVD Ruling as Appellate Body Stalls
WTO Latest News •September 26, 2025
The EU has appealed the WTO panel report in DS618 on countervailing duties applied to Indonesian biodiesel, notifying members at the 26 September DSB meeting. With the Appellate Body still non-functioning, the appeal pauses adoption and keeps the duties in place; the EU urged Indonesia to use the MPIA to secure a binding outcome. The move highlights the broader dispute-settlement impasse as 130 members again pushed to fill Appellate Body vacancies while others pointed to recent MPIA proceedings as an effective interim path.
Multilateral Agenda and Agriculture
WTO Fish Fund Opens; Grant Proposals Due 9 October
WTO Latest News •October 2, 2025
The WTO Fish Fund is now fully operational following the 15 September entry into force of the Fisheries Subsidies Agreement, with proposals for project and preparation grants due by 9 October. Eligible developing and least-developed members that have deposited instruments of acceptance can seek support to implement the deal, backed by roughly CHF 14.5 million (USD 18 million) pledged by donors including Australia, Canada, the EU, Japan, the Republic of Korea, New Zealand, Norway, the UAE, the UK and several European states. The facility is administered at the WTO in cooperation with FAO, IFAD and the World Bank, providing near-term technical and capacity-building resources for compliance.
WTO DG pushes realistic MC14 outcomes; December cutoff to shape agenda
WTO Latest News •September 30, 2025
The Director-General reported renewed political backing for the WTO at UNGA and urged members to focus MC14 on realistic, convergent files, with a December deadline to decide what advances. With agriculture talks largely stalled since MC13, members are weighing a post-MC14 workplan or political declaration and a small food-security package, while a new chair will be appointed to help finalize additional provisions to the Fisheries Subsidies Agreement. She also flagged WTO reform as a likely deliverable and highlighted an African Group–Cairns Group joint agriculture proposal; expect incremental outcomes when ministers meet in Yaoundé, 26–29 March 2026.
WTO agriculture panel pushes transparency on export competition, TRQs, food security
WTO Latest News •September 26, 2025
At its 25–26 September session, the WTO Committee on Agriculture tightened transparency by implementing an integrated export‑competition notification requirement and advancing TRQ review proposals to disclose in‑ and out‑of‑quota tariffs, add country‑level import data to MA:2 filings, and track practices that impede TRQ use. With UN agencies warning that export restrictions fuel price volatility amid persistent hunger (673 million in 2024) and the WFP facing two concurrent famines, members weighed stronger food‑security follow‑up, scrutinized 203 policy notifications and new measures, and signaled interest in technology transfer for smallholders. Bottom line: expect more granular agriculture reporting, faster responses to Committee queries, and heightened peer scrutiny on domestic support, market access tools and export measures ahead of the November meeting.
Ethiopia's WTO accession enters final phase ahead of MC14 2026
WTO Latest News •September 26, 2025
Ethiopia signaled its WTO bid has entered a decisive phase, targeting adoption at MC14 in Yaoundé in March 2026. The government cites rapid progress—liberalizing banking and forex, easing FDI rules, answering 200+ member questions, submitting 50+ laws, tabling 33 commitments, and concluding technical parts of bilateral market access talks with six members, with 12 more underway. Next steps push an aggressive timeline: finalize remaining bilateral deals by end-November, submit member comments by 24 October, and upgrade the Working Party report—progress that could open a 120‑million‑person market and anchor reforms in multilateral rules.
WTO Report: AI Could Lift Global Trade Nearly 40% by 2040
WTO Latest News •September 29, 2025
The World Trade Report 2025 projects AI could increase global trade by 34–37% by 2040—the “40 by 40” effect—and raise global GDP 12–13%, driven by lower trade costs, rapid growth in tradable AI services, and productivity gains; AI-enabling goods trade already reached US$2.3 trillion in 2023. But distribution of gains hinges on policy: closing digital and AI divides and accelerating diffusion could nearly double benefits for low‑income economies (from 8% to 15%), while tariffs, export measures, services rules and data governance will shape access to AI inputs and markets. The report urges open, predictable trade, investment in connectivity and skills, robust labor adjustment policies, and cross‑institutional cooperation to build inclusive AI value chains.
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