As a result of the growing tensions between the United States and China, on 14 July 2020 President Trump issued an executive order concerning certain import and export trade requirements between the two countries (for further details please see "United States farewells Hong Kong's separate customs territory status – what's the impact on importers?"). Among these changes, it was mandated that goods produced in Hong Kong be marked with China as their country of origin in accordance with 19 US Code Annotated (USCA) Section 1304 and 19 Code of Federal Regulations (CFR) Part 134. On 11 August 2020 US Customs and Border Protection (CBP) published a Federal Register notice, providing an effective date for such marking and noting the repercussions if goods from Hong Kong are not so marked.
Because of the time needed to mark, pack and ship goods from Hong Kong to the United States, importers must act quickly to ensure compliance with this new requirement.
At present, goods produced in Hong Kong are marked as "Made in Hong Kong". According to the CBP notice, goods which are produced in Hong Kong and entered or withdrawn from a warehouse for consumption into the United States must be marked with China as their country of origin as of 45 days from the notice's publication in the Federal Register (ie, 11 August 2020). This means that, unless otherwise excepted from marking, goods which are produced in Hong Kong and enter US customs territory on or after 25 September 2020 will be subject to the new marking requirement.
Marking is governed by Section 304 of the Tariff Act 1930, as amended (19 USCA Section 1304), and 19 CFR Part 134. The statute provides that unless excepted, every article of foreign origin (or its container) imported into the United States must be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) permits, in such a way as to indicate to the ultimate purchaser in the United States the English name of the article's country of origin. Further, a 10% ad valorem duty will be applied to articles that are not properly marked in accordance with 19 USCA Section 1304 and 19 CFR Part 134.
Notably, it is unclear whether, or when, goods produced in Hong Kong will also become subject to tariffs that otherwise apply to Chinese-origin products.
On 14 July 2020 the president issued Executive Order 13936 on Hong Kong Normalisation. Among other things, this order stated that because Hong Kong is determined to no longer be sufficiently autonomous from China to justify differential treatment in relation to China, the president has suspended the application of Section 201(a) of the US-Hong Kong Policy Act 1992, as amended (22 US Code (USC) 5721(a)), to certain statutes, including 19 USC 1304.
The order also provided that appropriate actions had to be commenced by the relevant agencies within 15 days.
Effective 25 September 2020, every article of Hong Kong origin imported into the United States will be subject to the same marking requirements as goods produced in China. Absent any further notice or guidance from CBP, CBP is expected to begin enforcing the requirements on or near that date. Shipments from Hong Kong are easily identified and thus could become an easy target for verification of compliance with the new marking rule.
