Japan and US set for bilateral trade talks in mid-April.

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The US and Japan will hold trade talks on April 15 and 16 in Washington as part of President Trump’s campaign promise for fair and reciprocal trade. Trump will most likely work on resolving the large trade deficit with Japan.

The US would like to see increase US beef exports while Japan said the trade talks will only cover goods only and not agriculture.

It will be interesting to see how the talks proceed – Japan is already a party to the 11-member agreement formerly known as the Trans Pacific Partnership along with an economic partnership agreement with the EU.

Court of International Trade Upholds Constitutionality of Trump Steel Tariffs

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As you may know, the Court of International Trade (CIT) has nationwide jurisdiction over customs and international trade laws and the imposition of tariffs.

Back in March 2018, steel importers challeged the constitutionality of Trump’s Section 232 duties on the basis of national security. The steel importers claimed Section 232 gives any President unlimited power to determine executive actions when justified on the basis of national security.

The three-judge panel of the CIT said the Supreme Court’s 1976 decision in Federal Energy Administration v. Algonquin SNG already decided that Section 232 met the “intelligible principle” standard because the scope of the law was limited to issues of national security.

China, US Trade Negotiators Resume Talks in Beijing.

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According to US News and World Report – the US and China’s trade negotiators are in Beijing to attempt a resolution to the trade dispute. After an all day meeting this Friday in Beijing, both sides will again meet in Washington next week.

Analysts believe a resolution may not be likely over two major issues – the trade deficit and stolen or transferred foreign technology.

Since last year, the US and China have been engaged in a trade war that saw the US levying tariffs ranging from 10% to 25% on $250 billion worth of Chinese goods.

Will post more as news becomes available.

China bans imports of recyclables.

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Since China’s entrance into the World Trade Organization in 2001, China has been accepting paper and plastic recycling from around the world – partly due to the cheap labor required to process recyclables. It was estimated that China imported approximately 40 million metric tons of recyclable products every year.

However, the increase in pollution in China has led to a ban in 2018 of foreign recyclables. Now that China no longer accepts America’s trash, some cities and municipalities are scaling back or altogether stopping their recycling programs. Experts estimate that China’s ban will lead to an additional 111 metric tons of garbage by the year 2030.

FDA OKs Import of Genetically Engineered Salmon.

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As reported from WebMD, I know, not exactly the authoritative source on import law. However, I checked and they are correct. On March 8th, the FDA issued a press announcement “deactiviting” an import alert from 2016. Full link to the press announcement can be found here.

Import alerts are bulletins that notify U.S. Customs and Border Protection (CBP) of potentially dangerous foods and drugs that are prohibited from entering the US.

The 2016 import alert on genetically engineered salmon became active until the FDA finalized labeling guidelines to inform consumers the product they were consuming was genetically engineered. At that time in 2016, Congress passed a law directing the U.S. Department of Agriculture (USDA) to create a labeling standard for bioengineered food. As the USDA issued their food labeling standards in December of 2018, the FDA determined they did not have the labeling authority and as such, there is no need for the import alert.

Ironically, genetically engineered salmon is now safe for import to the US but kratom is not.

Charlotte Pipe and Foundry wins case against Chinese cast iron pipe producers.

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Last week, the International Trade Commission (ITC) voted unanimously in favor of Charlotte Pipe and Foundry in their anti-dumping duty (AD) and countervailing duty (CVD) petition against imports of cast iron soil pipe from the People’s Republic of China.

A vote in favor of Charlotte Pipe and Foundry means the U.S. Department of Commerce determined that Chinese producers or exporters undersold the subsidized cast iron soil pipe in the US. AD/CVD duties are to level the playing field and cast iron soil pipe imported into the US from China will include duties ranging 251% to 345%. These additional duties go info effect immediately.

If you are a Chinese exporter or want to know how these new duties impact your business – regardless of whether you import or export, give David Hsu a call at 832-896-6288 or email at attorney.dave@yahoo.com.

CNBC says US China trade war increases the amount of counterfeits – true or false?

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CNBC reports that the US China trade war could lead to an increase in counterfeit goods for 3 reasons:

(1) Flooding of products where CBP cannot catch all fakes, especially through shipments of e-packets which weigh 4 pounds or less. The article says the port at JFK receives 120,000 e-packets a day.

(2) Counterfeiters using 3D printing to create “super fakes” that are very similar to the legitimate product.

(3) Counterfeiters hijacking well known brands on e-commerce sites by filing a document with the trademark office of an email address change. Once the email address change is approved, they go to Amazon to have them recognize their email as the legitimate source and take down the legitimate product.

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Here’s my thoughts on this:

1. E-Packet shipments have already been overwhelming CBP for the past 2 years or longer. A 2017 CBP report already mentioned the influx in e-packet delivery as causing more counterfeit goods to slip through.

2. The trade war and increase in these small shipments are not related. The rise in e-packet delivery is due to websites such as alibaba, dhgate, wish and all the other e-commerce platforms that allow US consumers to buy direct from Chinese manufacturers.

3. There is some confusion with buyers in the US who cite Customs Directive No. 2310-011A. This directive allows individuals to bring in (1) one counterfeit article, (2) for personal use, (3) not for sale and (4) it is declared. Some people confuse the directive as allowing shipments of counterfeit goods to be delivered to someone in the US. However, the directive says that the counterfeit good/gray market good must “accompany” you and therefore it cannot be sent.

4. I have to disagree with the article about the use of 3-D technology to create counterfeit goods. Most counterfeit items from China are from the same factory that produces the legitimate product. Sometimes the companies change vendors, leaving the previous vendor with the same tooling, product specifications and know-how to create the same product as the legitimate product (althought lacking the license to do so).

5. There isn’t a need for 3-D printing of counterfeit goods. The fake Otterbox is probably manufactured by the previous OEM manufacturer in which Otterbox sourced their products.

6. Item 3 about Amazon – the CNBC article actually says there has never been a confirmed example of this happening. The main reason is because Amazon will always email the previous email address to verify a request for a change of email was actually filed. The article says an attorney has had 15-16 instances of this happening but there has been no actual success by a counterfeiter.

I don’t see a correlation between the trade war and increase in counterfeit goods. There will always be a demand for counterfeit goods, and any country will have an incentive to supply such demand – trade war or not.

If you received a letter from customs seizing your merchandise because they believe the goods are counterfeit – contact experienced seizure attorney David Hsu at 832-896-6288 or by email: dh@gjatradelaw.com or David’s catch-all email: attorney.dave@yahoo.com.

4 US Companies falsely claimed their goods were “Made in the USA”, $0 in fines paid.

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According to the New York Times – four companies violated Federal Law by engaging in “unfair or deceptive acts” and false claims that their goods were “Made in the USA”.

The companies and violations include –
(1) Hockey puck manufacturer falsely claims their pucks were made in the US.
(2) California mattress maker falsely claimed there mattresses were “designed and assembled in the U.S.A.”
(3) California-based manufacturer of tactical gear and other merchandise falsely claimed their products were Made in the USA or American made.

Despite the false claims, the Federal Trade Commission (F.T.C.) found all four companies violated federal law, but did not punish the firms. No fines were issued and neither company was required to admit wrongdoing or notify customers of their false marketing.

Democrat lawmakers urged the President to get more tough on manufacturers who falsely label goods as made in America. In response, FTC officials indicated the threat of future penalties was an adequate deterrent as companies face a $40,000 penalty per violation if making any further false claims.

If you have any questions whether your goods qualify as “Made in the USA” or are under FTC investigation, contact experienced trade and customs attorney, David Hsu by cell/text: 832.896.6288 or by email at: attorney.dave@yahoo.com / dh@gjatradelaw.com.

Bi-Partisan bill introduced to block 25% tariff on imported cars.

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According to the Detroit News, U.S. Representative, Fred Upton (R) introduced legislation that would stop President Trump from imposing 25% tariffs on cars imported to the US under the premise of threats to America’s national security.

The legislation includes bi-partisan support and would require the International Trade Commission to first conduct a “comprehensive study on the economic importance of automotive manufacturing in America”.

Another argument is that the Trump administration is over stating the claim that cars and auto parts are a threat to national security of the US.

Since Trump proposed the tariffs in May of 2018, the proposed tariffs may be imposed as early as early May if the new legislation passes and becomes law.

More news will be posted as they become available.

China introduces new legislation to placate US IP concerns.

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According to Bloomberg – China’s legislative body has passed new legislation to replace three main laws that impact non-Chinese companies doing business in China:(1) Law of Joint Ventures with Chinese and Foreign Investment, the (2) Law on Foreign-Capital Enterprises and the (3) Law on Chinese-Foreign Contractual Joint Ventures.

To summarize, the new legislation includes: (1) promise of equal support to foreign and domestic firms, (2) equal treatment for license applications, (3) foreign companies can participate in setting industry standards and in government procurement, (4) right of foreign companies to appeal non-security related decisions and (5) a complaints mechanism for foreign companies.

The law was passed on March 15th and will take effect on January 1, 2020. Whether this will impact the current trade negotiations is still yet to be seen.