Question 1

The U.S. replaced its tariff classifications with the Harmonized Tariff Schedule, a uniform system of goods classification used by custom officials worldwide.

Accepted Answer

This statement is true. The Harmonized Tariff Schedule (HTS) is a standardized system used by customs officials in many countries, including the United States, to classify goods for trade and tariff purposes. It replaced the previous U.S. tariff classification system in 1989.

Question 2

The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being sold for less than the price charged in the home market. By law, the duty is to be triple the cost difference.

Accepted Answer

The International Trade Commission can impose antidumping duties on goods sold below their fair value, but the duty is not automatically set to triple the cost difference. The duty amount is calculated to bridge the gap between the export price and the normal value (home market price) to remove the injury to the domestic industry.

Question 3

The Supreme Court has noted that the Customs officials who assign tariff classes to imported goods must be given deference by the courts in how Customs interprets the law of tariffs.

Accepted Answer

This is based on the principle of Chevron deference, where courts generally defer to the interpretations of ambiguous statutes made by the agency charged with enforcing the statute, unless that interpretation is unreasonable. In the case of customs officials interpreting Tariff laws, the Supreme Court has applied Chevron deference and given the agency significant deference in its interpretation of tariffs.

Question 4

Most business disputes in the tariffs area arise over the classification of products under the tariff schedules.

Accepted Answer

Many businesses, particularly those involved in international trade, may face disputes over the proper classification of their products under the tariff schedule. This can have significant implications for the amount of duties or tariffs owed on those products, so it is an important issue for businesses to address.

Question 5

In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are best treated like interpretations of policy statements.

Accepted Answer

The Supreme Court in U.S. v. Mead Corp. held that Customs classifications of products are best treated like interpretations of policy statements.

Question 6

U.S. producers have the right to go to the International Trade Commission to request a tax be imposed on products from foreign countries that it claims are being subsidized by a foreign government in production.

Accepted Answer

This is known as the countervailing duty law, and it allows U.S. producers to seek relief from unfair foreign government subsidies. The International Trade Commission can investigate and determine if the subsidies are causing harm to U.S. producers and impose a tax, which is known as a countervailing duty, on the subsidized products from the foreign country.

Question 7

Products may be completely banned from importation into the U.S. if they hurt national security.

Accepted Answer

Under the International Emergency Economic Powers Act and the Trading with the Enemy Act, the president has the authority to prohibit the importation of goods deemed to pose a threat to national security.

Question 8

Dumping occurs when a company sells its products for less money in a foreign market than it charges for those same goods in its home market.

Accepted Answer

This is the definition of dumping according to international trade laws. Companies do this in order to gain an unfair competitive advantage over local producers in the foreign market.

Question 9

The International Trade Commission may impose an antidumping duty on goods imported to the U.S. that are being sold for less than the price charged in the home market.

Accepted Answer

An antidumping duty may be imposed if the International Trade Commission determines that a foreign product is being sold in the U.S. at less than fair value, causing injury to the domestic industry. The duty is meant to level the playing field by increasing the price of the imported product to a fair market value.

Question 10

Antidumping orders issued by the International Trade Commission usually concern a restriction on goods being "dumped" into the U.S. market for free.

Accepted Answer

Antidumping orders are aimed at preventing goods from being sold in the U.S. at less than fair value, not for free, to protect domestic industries from unfair competition.

Question 11

In U.S. v. Mead Corp. the Supreme Court held that Customs classifications of products are due Chevron deference when challenged.

Accepted Answer

In U.S. v. Mead Corp., the Supreme Court held that Customs classifications do not automatically receive Chevron deference; instead, such deference applies only when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and the agency interpretation claiming deference was promulgated in the exercise of that authority.

Question 12

If a foreign company is guilty of dumping its products in the U.S., the International Trade Commission can impose taxes on the good being brought into the country.

Accepted Answer

This is correct, the International Trade Commission can impose anti-dumping duties on products from countries that are found to have engaged in dumping, which is when they sell goods in the U.S. below fair market value. This is meant to protect domestic industries from unfair competition.

Question 13

The International Trade Commission may restrict imports to help foreign companies better compete in U.S. markets.

Accepted Answer

The International Trade Commission may restrict imports to protect domestic industries from unfair competition, such as dumping or subsidized imports, not to help foreign companies compete in U.S. markets.

Question 14

The government publishes duties and taxes it imposes on imported products in the Federal Register for importers to check to see the relevant tariff.

Accepted Answer

The answer of The government publishes duties and taxes it...

Question 15

Foreign automobiles that do not meet U.S. auto safety and pollution regulations may not be imported into this country.

Accepted Answer

This is a requirement of the National Highway Traffic Safety Administration (NHTSA) and Environmental Protection Agency (EPA). Any foreign automobile that does not meet the safety and environmental standards established by these agencies cannot be legally imported into the United States.

Question 16

An "ad valorem tariff" is based on a percentage price of a product.

Accepted Answer

An ad valorem tariff is calculated based on a percentage of the product's value or price.

Question 17

The Department of Commerce may investigate to see if a foreign government is providing a subsidy to their producers that allows the good to be sold for less than its real cost of production. If so, a tax may be imposed on the imported good.

Accepted Answer

This is the definition of anti-dumping duties, which are imposed by the Department of Commerce to combat unfair trade practices.

Question 18

A foreign trade zone is where businesses can import goods for processing, assembly, or warehousing, without paying duties until the finished products are sent to the market.

Accepted Answer

A foreign trade zone (FTZ) is a designated area within a country where businesses can import goods without paying duties until the finished products are shipped out to the market. These zones are usually located near ports and are designed to encourage international trade by reducing the costs associated with customs clearance and import taxes. Within a foreign trade zone, businesses can engage in manufacturing, processing, assembly, and warehousing activities, as well as conduct other types of value-added operations. Once the finished goods are sent to the market, they are subject to the same duties and taxes as other imported products.

Question 19

An "ad valorem tariff" is a lump-sum or fixed amount tax applied to a product.

Accepted Answer

An ad valorem tariff is a tax that is calculated as a percentage of the product's value rather than a lump-sum or fixed amount.

Question 20

Products made from endangered species are prohibited from being imported into the U.S. for sale.

Accepted Answer

The Endangered Species Act (ESA) of the United States prohibits the import and sale of any products made from endangered species.

Quiz 22: The International Legal Environment of Business