capital report: july 31, 2018

EPA Reminds Auto Care Industry of Refrigerant Sales Restrictions

On July 23, the U.S. Environmental Protection Agency (EPA) issued a letter addressed to the Auto Care Association to remind the industry of new rules extending sales restrictions for ozone-depleting refrigerants to include approved non-ozone depleting substitutes, primarily R-134a and HFO-1234yf. Under the rules, which went into effect on Jan. 1, 2018, refrigerant vendors must verify that the purchaser of a substitute refrigerant, supplied in a two-pound container or larger, is either a certified technician or a shop that employs at least one certified technician.

The letter states that, “While the sales restriction is new as it relates to the sale of substitute refrigerant, there is a long-standing requirement under Section 609 that technicians must be certified to service motor vehicle air conditioners (MVACs) for consideration (e.g., payment or bartering) regardless of the refrigerant used.”

The EPA letter further reminds refrigerant vendors that for all containers two pounds and over, they must maintain invoices that indicate the name of the purchaser, date of sale and quality of refrigerant purchased. Further, if somebody other than the certified technician purchases the refrigerant, the seller must maintain documentation provided by the buyer demonstrating that the buyer employs at least one certified technician.

According to the letter, “Selling refrigerant to someone who is not a certified technician or the technician’s employer could result in enforcement action against the refrigerant vendor.”

It should be noted that these restrictions do not apply to sales to do-it-yourselfers of refrigerant in under two-pound containers. However, any small cans produced after Jan. 1, 2018 must be equipped with a self-sealing valve that meets EPA requirements.

Questions? Contact Aaron Lowe.

Read EPA’s letter:


Tariffs Update: New Lists and Legislation

Section 301 Imports from China:

A group of 20 Republicans on the House Ways and Means Committee in a letter last week urged President Trump to meet directly with President Xi of China to begin negotiations and develop solutions to ease the trade war between the two countries.

Earlier this week, the Office of the U.S. Trade Representatives held a hearing regarding a second proposed 25 percent tariff list (Annex C) on approximately $16 billion worth of products imported from China.

A third proposed 10 percent tariff list on approximately $200 billion worth of products is also under investigation with comments due Aug. 17, 2018. There are a number of vehicles and vehicle parts included on the list.

The first tariff list (Annex A and B) went into effect on July 6, 2018. China has retaliated by imposing tariffs on an equivalent amount of U.S. goods. Parties can submit requests for product exclusions by Oct. 9, 2018 using Exclusion requests are granted on an HTS-product basis. Therefore, a particular exclusion will be granted to all imports of a product, regardless of whether the importer filed the request, which is different from the exclusion request process for steel and aluminum.

Section 232 Auto Tariffs:

Last Wednesday, July 25, Sens. Lamar Alexander, R-Tenn., and Doug Jones, D-Ala., introduced bipartisan legislation to delay the proposed 25 percent tariff on imported autos and auto parts until the U.S. International Trade Commission conducts an investigation and presents a report to Congress on the effects the tariff would have on jobs in the U.S. automotive industry. Last month, the senators sent a letter to Commerce Secretary Wilbur Ross, urging him to reconsider the tariffs.

On July 19, the Auto Care Association testified before the Department of Commerce’s hearing regarding the Section 232 National Security Investigation of Imports of Automobiles and Auto Parts. Commerce has 270 days to present its findings to the president and recommend actions.

The Auto Care Association joined a coalition with major auto industry groups in an open letter to President Trump opposing the tariffs, and submitted comments to Commerce last month as part of the public comment process.

Section 232 Steel/Aluminum Tariffs:

According to Commerce Secretary Wilbur Ross’ testimony at a hearing last month, the Department of Commerce (Commerce) has received more than 20,000 steel and aluminum requests, but has only made final determinations on fewer than 100.

Argentina, Australia, Brazil and South Korea were able to finalize agreements with the U.S., but tariffs went into effect for all remaining countries, including Canada, Mexico and members of the EU, on March 23, 2018. A number of countries have retaliated with tariffs on imports from the U.S.

Commerce has set up a process for parties to submit steel and aluminum exclusion requests or objections. There is no deadline to submit exclusion requests.

Unlike the Section 301 imports from China exclusion requests, the Section 232 steel and aluminum exclusion requests are product and company-specific. A company may request an exclusion for a product that was denied to another company. A company may also be denied an exclusion for a product that was granted an exclusion to another company.

Questions? Contact Angela Chiang.

Visit Auto Care’s trade resources:


Congress Passes Bipartisan Vocational Training and Education Bill

On July 25, 2018, Congress passed H.R. 2353, the “Strengthening Career and Technical Education for the 21st Century Act.” The bill reauthorizes the “Carl D. Perkins Career and Technical Education Act” and allocates $1.2 billion in state grants to fund vocational training at most schooling levels. With strong support from the Trump administration, the association expects that the president will sign this important legislation.

Under the legislation, high schools, colleges and training centers may apply for these grants in order to train teachers or fund specific training programs for students. Previously, these efforts were managed on the federal level by the Secretary of Education. This bill moves much of the decision-making and implementation to the local level to ensure that the funds are more effectively used, and that the training meets the needs of companies that are located near the schools and training centers. A state must track performance around core indicators, such as graduation rate, and make “meaningful progress” within a two-year period in order to continue to receive federal funding.

Read Auto Care’s press release:


Auto Care Association Establishes New Partnership with American Council of Young Political Leaders

The Auto Care Association kicked off its new partnership with the American Council of Young Political Leaders (ACYPL) by hosting a seven-person delegation of rising political leaders from Australia in Washington, D.C. on July 23. Auto Care Association President and CEO Bill Hanvey hosted a dinner for the delegation, also attended by Auto Care Association Senior Vice President, Regulatory and Government Affairs, Aaron Lowe, and department staff.

The Australian delegation represented multiple parties from Down Under, with several members currently serving in government positions. Topics discussed were international commerce, tariffs and trade, as well as the future of the global automotive supply chain. The ACYPL is a 50-year-old organization based in Washington, D.C. with a focus on fostering exchanges abroad and in the U.S. so that political figures and policymakers can engage face-to-face.

Questions? Contact Matt Robbins.

Read Auto Care’s press release:


Get the Latest Coverage of the 2018 Elections

Thanks to support from the Auto Care Political Action Committee (ACPAC), we are pleased to bring Capital Report readers the latest Inside Elections with Nathan Gonzalez, a bi-monthly nonpartisan analysis of U.S. elections.

Read the latest issue:

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