It becomes less and less convenient to manufacture in China to import and sell in the U.S. market

Calculating duties to import into the U.S.: news on the application of the First Sale rule for imports from China

On February 09, 2023, the U.S. Court of International Trade (CIT) issued an opinion (Meyer Corp. v. United States) that could affect the use of the duty assessment method to import into America using the First Sale rule". The court ruling highlights the need for importers to provide sufficient information to U.S. Customs when seeking approval to use the first sale to import into the United States.

The case involved a dispute between Meyer Corp. and U.S. Customs over the assessment (and duty calculation) of goods imported from China and Thailand. The transactions in question involved the production and sale of cookware between Meyer's related companies. At issue in the case was whether Meyer Corp. was required to provide access to the parent company's books to prove that the prices of the first sale from China were fair and not affected by China's status as a non-market economy.

The Court of International Trade's decision, although limited to the specific facts of this case, is likely to encourage U.S. Customs to more systematically seek access to supplier's books and more aggressively scrutinize pricing arrangements between related companies involving suppliers from China. Further analysis and judicial interpretation may be needed to address these issues and provide clarity to importers fully.