Trump delays decision on steel and aluminium tariffs.

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A little background – back in March 2018, President Trump imposed worldwide tariffs of 25% on imports of steel and 10% on aluminum. Countries such as Canada, Mexico and the European Union were temporarily exempted from these tariffs.

Later in April, the US gave South Korea a permanent exemption from these tariffs in exchange for a 30% reduction of SK exports of steel to the United States.

One country not exempted was China, and as posted previously on this blog, China retaliated with their own duties on many US imports to the middle kingdom.

Fast forward to May 1st and the current administration has extended negotiations on steel and aluminium tariffs for an additional 30 days with Canada, Mexico and the European Union. Tentative agreements have been reached with Argentina, Brazil and Australia.

Check back here for more details as they become available.

The Office of the United States Trade Representatives releases special 301 report on Intellectual Property Rights.

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On April 27th, The Office of the United States Trade Representative (USTR) today released their 2018 Special 301 report listing trading partners that do not “adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights”.

The Report singles out several US trading partners to address IP-related issues and places certain countries on a “Watch List” and “Priority Watch List”.

As you may be aware, Section 301 of the U.S. Trade Act of 1974 authorizes the President to take all appropriate action, including retaliation, to obtain the removal of any act, policy, or practice of a foreign government that violates an international trade agreement or is unjustified, unreasonable, or discriminatory, and that burdens or restricts US commerce. Section 301 actions are unique in that they do not require authorization from the World Trade Organization (TWO) to take enforcement action.

The US Government estimates the Intellectual Property industries directly and indirectly support 30% of all employment in the United States (or about 45.5 million American jobs).

Some highlights of the 2018 Special 301 Report include:

1. The following 12 countries are on the “Priority Watch List” – Algeria, Argentina, Canada, Chile, China, Colombia, India, Indonesia, Kuwait, Russia, Ukraine, and Venezuela.

2. China is included on the “Priority Watch List” for the 14th year in a row and claims China’s technology transfer practices, trade secret theft, counterfeit manufacturing etc.

3. India is also included on the “Priority Watch List” for “longstanding challenges in its IP framework and lack of sufficient measurable improvements, particularly with respect to patents, copyrights, trade secrets, and enforcement, as well as for new issues that have negatively affected U.S. right holders over the past year.”

4. Canada was surprisingly indicated on the “Priority Watch List” instead of their usual “Watch List” status. The USTR cited Customs inability to inspect or detained counterfeit or pirated good shipped through Canada and IP protections for pharmaceuticals among others.

The full Spectial 301 Report can be read here.

If you have any questions about this report, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Harley Davidson claims new factory in Thailand a result of US withdrawal from the TPP.

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Credit: Pexels (free stock photos)

According to a Bloomberg article published April 24, 2018, Harley Davidson motorcycle maker opted in on building a factory in Thailand after the Trump administration withdrew US participation in the Trans-Pacific Partnership (TPP). In the first publicized impact of the US withdrawal from TPP, Harley Davidson CEO Matt Levatich indicated the factory in Thailand was “necessary to access a very important market”.

Additionally, the impact of leaving the TPP was also felt locally for the 260 US jobs lost due to the closure of the Missouri plant amind slumping sales in the US.

As a counterpoint to the article – the article does specify that Harley Davidson has seen sales decreasing in 13 of the last 14 quarters. If accurate, the sales declines started long before the TPP was even discussed and long before the US withdrew from participating in the TPP.

It is further important to note that correlation does not mean causality as Harley Davidson sales in the Asia Pacific region were 32,258 in 2015; 32,889 in 2016 and decreased to 30,348 in 2017. Sales decline of Harley Davidson in Asia occurred well before the US withdrew from the TPP.

I believe the US withdraw from participation in the TPP was used by the CEO to justify two unpopular moves – the building of a factory in Thailand and a closure of the Missouri plant.

Colorado woman fined $500 by Customs for not declaring an apple.

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As has widely been reported, Colorado resident Crystal Tadlock was catching a connecting flight in Minnesota back to Colorado from a trip to France when CBP in Minnesota stopped her and fined her for not declaring an apple. At the time, CBP indicated they would fine her $500 for failure to declare the apple. Crystal claims she packed the apple (served as part of the in-flight meal service) in her carry-on and forgot about it until she was clearing Customs.

Customs has discretion to fine up to a $1,000 penalty for first time offenses of bringing in prohibited agricultural products and Crystal will likely receive a notice in her mail in about 30 days. Not sure if Crystal is a frequent traveler, however the other consequence of this seizure will be the loss of Global Entry Status.

If you or someone you know has had a Customs seizure and you have received a penalty notice from Customs – call experienced Customs attorney David Hsu for immediate help – 832.896.6288 or by email at dhsu@givensjohnston.com.

US Treasury Secretary Mnunchin may travel to Beijing for trade talks.

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77th United States Treasury Secretary, Steven Mnuchin

Earlier this week, current US Treasury Secretary Steven Mnuchin told reporters he may travel to Beijing for trade negotiations to ease U.S.-China tensions.

In recent weeks both countries have announced tariffs on goods imported from the other country and the tensions between the US and China (the world’s two largest trading partners) has raised concerns of an impending trade war. The US first proposed tariffs totaling $150 billion on Chinese imports and Beijing has proposed tariffs on American goods such as soybeans.

In response, the Ministry of Commerce, People’s Republic of China would “welcome” the move by Treasury Secretary Mnuchin.

More updates as they become available.

EU wants to participate in the US-China steel dispute at the WTO.

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As previously posted on this blog, China requested consultations with the WTO regarding the US import tariffs on steel and aluminum. Requesting a consultation with the WTO is the first stage in the dispute process with the WTO and now the EU asked on April 23rd to join the dispute.

It is important to note that one week from now, President Trump will decide whether these tariffs would apply to imports from the EU. A temporary exemption from the 25% duty on steel and 10% duty on aluminum was granted for the EU until May 1st. Temporary exemptions were also granted to Canada, Mexico, Australia, Argentina and Brazil. South Korean imports have been exempted indefinitely.

In addition to the EU, Hong Kong, Russia, India and Thailand have also filed requests to join the consultations. Check back for more information as it becomes available.

 

Senate Finance Leaders Ask Commerce Secretary to Improve Tariff Exclusion Process.

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Department of Commerce Secretary Wilbur Ross

According to the Senate Finance Committee website, Chairman Orrin Hatch (R-Utah) and Ranking Member Ron Wyden (D-Ore.) urged the U.S. Department of Commerce Secretary Wilbur Ross to implement improvements to the Commerce Department’s process for excluding products from tariffs on steel and aluminum imports under Section 232 of the Trade Expansion Act of 1962.

In short, the letter voices concerns that the process lacks “basic due process and procedural fairness for stakeholders, especially American small businesses” and “appropriate mechanisms to prevent the Section 232 tariffs and product exclusion process from being abused for anticompetitive purposes.”

The Senators write the exclusion request process requires submission of a “substantial amount of information at a minute level of detail” for each imported product and may increase the burden for small businesses. Additionally the Senators state the request and objection forms allow for ambiguity by the Commerce department to approve or deny a product. Lastly, Commerce has not specified how to protect business proprietary information, how to address ex parte communications, how to ensure consistent determination across similar petitioners and objectors.

A full text of the letter can be viewed here (scroll to the bottom, full letter in italics).

If you have any questions about the 232 exclusion process, contact experienced trade attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

ZTE banned from purchasing US technology for 7 years.

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ZTE Corporate Campus in Shenzhen, China; Photo Credit: Brücke-Osteuropa from Wikipedia

On Monday, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) imposed a denial of export privileges against ZTE, composed of Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China (“ZTE Corporation”) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (“ZTE Kangxun”).

Background

In March of 2017, ZTE agreed to pay civil and criminal penalty and forfeitures totaling $1.19 billion for shipping telecommunications equipment to Iran and North Korea, making false statements, and obstructing justice by preventing disclosure to and misleading the U.S. Government. In 2017, ZTE also agreed to a seven-year denial of export privileges if ZTE committed additional violations.

Commerce found ZTE made several violations such as making false statements to BIS in 2016 and making false statements about disciplinary actions against employees involved in the shipment of equipment to Iran and North Korea.

Result

By activating the seven-year denial of export privileges, ZTE is prohibited from participating in any way in any transaction subject to the EAR. The prohibition also makes it unlawful for businesses and individuals to participate in an export transaction subject to the EAR with a denied person (ZTE).

If you have any questions about how the recent ZTE order may effect your business, or have any other BIS, EAR or export compliance issues – contact experienced trade attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

CBP seizes $107,360 in unreported currency from traveler headed to Jordan.

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Courtesy CBP.gov Website

Another day, another CBP media release of a currency seizure. This time the seizure occurred at Chicago O’Hare (ORD). On April 11th, a traveler departing ORD to Jordan was intercepted by CBP and found to be concealing $107,360 in sealed shirt bags.

31 USC 5316 indicates that all travelers must report currency in the amount of $10,000 or more. Travelers carrying $10,000 or more need to complete a FinCEN Form 105, also known as the Report of International Transportation of Currency or Monetary Instruments (CMIR).

If you have had currency seized, call David Hsu for immediate assistance, 832-896-6288 or by email at dhsu@givensjohnston.com. We can assist clients all over the world, don’t delay call today.

CBP seizes combined $152k in unreported currency from two travelers in April 2018.

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Courtesy CBP.gov Website

According to the U.S. Customs and Border Protection (CBP), officers at the Philadelphia International Airport seized a combined total of 152,342 in unreported currency from two travelers departing out of who recently departed PHL.

As a general rule, travelers can carry as much currency (cash, checks, money orders, or other monetary instruments), but MUST report all amounts totaling $10,000 or more on a U.S. Department of Treasury financial form.

The first seizure took place on April 1st, where a traveler headed to Turkey was seized with $46,500 and the second seizure occurred on April 7th, where a traveler to Ghana had possessed $105,842.

If you or anyone you know has had cash seized at the airport, contact experienced currency seizure attorney David Hsu at 832.896.6288 or email at dhsu@givensjohnston.com for immediate assistance.

We work hard to get your hard earned money back from Customs, don’t delay – call today!