Monthly Archives: July 2019

Chinese manufacturers return to China leaving ‘inefficient’ Vietnam.

July 21, 2019 By in ADD/CVD, tariff engineering, Uncategorized Tags: , , , , , , Leave a comment
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According to the South China Morning Post, some Chinese manufacturers that relocated to Vietnam due to the tariffs placed on imports to the US, are moving back to China or exploring manufacturing options in Thailand, Bangladesh and Myanmar.

The SCMP article quotes a factory manager who said differences in culture (no over time in Vietnam and lower skill labor force) were two main causes of delays in delivery times and poor production numbers. With the tariffs in place, this has increased the demand for land and labor in Vietnam, causing costs to also increase. As foreigners cannot own land in Vietnam, there is also a risk for Chinese manufacturers to partner with a Vietnamese counterpart. Another factor leading to increased manufacturing costs for Chinese companies are the stricter labor and environmental protections, causing many Chinese companies to face fines for violations.

The current trade situation in Vietnam and US tariffs are forcing some manufacturers to look towards Thailand – attractive because of the stable political situation but high labor costs; Bangladesh which is relatively unknown to Chinese manufacturers and Myanmar which has low labor costs, but Myanmar faces sanctions due to their human rights abuses.

While not discussed in the SCMP article, the other big problem for Chinese manufacturers is the issue of how long the US 301 duties will remain in place. Just as spontaneously as the 301 duties were put in place, the 301 duties can also spontaneously end at the discretion of President Trump. I believe this unpredictability is the main question Chinese manufacturers must answer before spending the money and dedicating the time, resources, and manpower needed to move production to a foreign country.

If you have any questions regarding country of origin and how to avoid tariffs by moving production to other countries besides China, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Vietnam telecom Viettel not using Huawei 5G equipment.

July 21, 2019 By in Huawei, Uncategorized Tags: Leave a comment
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According to the New York Times, telecommunications companies in Vietnam are avoiding using Huawei equipment in their 5G plans. The NYT article finds this unusual as companies in Thailand, Indonesia, Cambodia, Laos and Malaysia have already welcomed Huawei for their 5G plans.

However, in Vietnam the major wireless carriers are working with Ericsson and Nokia for their 5G collaborations. A spokesperson for government owned Viettel stressed the company is not prohibited from using Huawei equipment.

The NYT article cites Major General Le Van Cuong, the former director of the Institute of Strategic Studies at the Vietnamese Ministry of Public Security states that Vietnam should view China as a cyber security threat if “a superpower like America regards China as a cybersecurity threat”.

Vietnam currently has a majority of its people connected to 4G and hopes to have 5G connections countrywide by 2020.

As China is Vietnam’s largest trading partner, Vietnam has supported previous initiatives such as Beijing’s Belt and Road Initiative. However, both sides claim portions of the disputed South China Seas which has led to tensions between the two countries, even though China is Vietnam’s largest trading parter.

While Vietnamese telecom companies have cooperated with Ericsson and Nokia, it is unsure whether those carriers will speak to Huawei.

The NYT article also says Viettel is developing their own software and equipment in house, employing 300 engineers in research and development. he also notes that 1,000 of the 4G base stations across Vietnam, Cambodia and other countries are also self-produced by Viettel.

Japan and South Korea trade war tensions rise.

July 20, 2019 By in Japan, Uncategorized Tags: , , , , Leave a comment
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Japan and South Korea trade war tensions rise.

As previously mentioned on this blog, Japan and South Korea are in a trade dispute arising out of a court case granting South Koreans compensation for forced-labor during Japan’s colonial occupation of South Korea.

In response, Japan placed export regulations on chemicals exported to South Korea that are vital for South Korea’s tech industry. The restrictions on exports to South Korea are to take place in August unless an agreement is reached between the two sides. It appears no deal will be reached as both politicians have seen their approval ratings rise since the disputes.

CBP seizes goods for lead in paint.

July 20, 2019 By in CPSC, Uncategorized Tags: , , , , , Leave a comment
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Image of seized brushes, source: cbp.gov

U.S. Customs and Border Protection (CBP) officers in Baltimore seized 790 children’s hair brushes from China. The children’s folding hair brushes contained a mirror and were included in a shipment which included “hats, gloves, hookah”. A sample of the shipment was sent to the U.S. Consumer Product Safety Commission (CPSC) to conduct a chemical analysis.

The CPSC advised CBP that the brushes contained excessive lead levels – more than 2,500 parts per million. In general, all children’s products made or imported into the US must not contain more than 100 parts per million of total lead content in “accessible parts”.

The appraised value of the seized goods carry a suggested retail price (MSRP) of $5,522. As the lead content is hazardous to children, the brushes will be destroyed by CBP.

While America took had the lead paint abatement initiative starting in the 70’s, the rest of the world is yet to fully rid the use of lead in many paints. Excessive amounts of lead are harmful to children if the accessible parts are placed in their mouths. Lead in paint causes illness and excessive levels further damage the a child’s development.

If you have any import/export questions, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

CBP seizes counterfeit Cartier products valued over $2.6 million.

July 20, 2019 By in Hong Kong, Uncategorized Tags: , , , , 1 Comment
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Counterfeit Cartier bracelets, source: cbp.gov

U.S. Customs and Border Protection (CBP) officers in Louisiana intercepted 180 pieces of counterfeit Cartier jewelry from a shipment from Hong Kong. If authentic Cartier, the bracelets would hold a MSRP of more than $2.6 million.

CBP officers inspected the parcel with a packing list specifying “jewelry accessory”. Upon inspection, they found bracelets packaged in Cartier boxes and determined the poor quality bracelets were counterfeit.

As have been previously posted on this blog, Hong Kong is commonly known by CBP to frequently ship counterfeit jewelry such as watches and accessories such as hats. This seizure is the largest (in terms of dollar value) for the entire year.

 

Trump saves Huawei.

July 16, 2019 By in Huawei, Uncategorized Tags: , , Leave a comment
President-Trump-Official-Portrait

Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)

Well, not exactly Huawei, but at least Huawei’s smartphone division. After backtracking on sanctions, Huawei’s shipments for 2019 are estimated to be 260 million units and more. This new forecast even beats the pre entity list placement forecast of 250 million units.

According to the Bloomberg article cited several reasons for increased smartphone sales: (1) inclusion of Google play store apps for future smart phones, and (2) increased Chinese domestic sales of Huawei devices that may result from consumers supporting a domestic company.

Ultimately, Trump’s reversal of the Huawei ban (for devices not a threat to national security) has ultimately saved Huawei and their smartphone sales. Over the past two months, there have been multiple reports of canceled phones and laptops (new Matebook); we can expect to see those new devices in the near future as a direct impact of President Trump’s reversal at the G20 summit.

If you export any goods that may contain Huawei parts or components, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Trump criticizes India for tariffs on Harley Davidson bikes.

July 15, 2019 By in Uncategorized Tags: , , Leave a comment
black and red touring motorcycle

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According to thePrint.in online, President Trump has criticized India several times for their high duties on Harley Davidson motorcycles. As recently as last June, President Trump has told Indian Prime Minister Modi the import duties were unacceptable.

Harley Davidson’s first entered the Indian market in 2007 in exchange for lifting a ban on Indian mango exports to the US (the “Mango” deal). However, in 2018, India incread the duties on “completely knocked down units” of Harley Davidson’s that are shipped to India for assembly. The 13 knocked down units are the lower priced models and are the majority of Harley Davidson motorcycles sold in India.

While Harley Davidson only sells about 2,500 bikes in India per year, President Trump views Harley Davidson and the brand as the “pride of the United States”, which also makes the brand an easy target for foreign governments to irritate the President.

President Trump likely supports Harley Davidson for multiple reasons: (1) the brand is popular among Trump’s voters in the midwest and Southern US, (2) Bikers for Trump is a group of motorcycle riders who also mostly ride Harley Davidson’s and (3) Harley Davidson’s headquarters is in Wisconsin – a Republican state that Trump needs for support in 2020.

Time will tell what products Trump will increase tariffs in retaliation. If you have any questions about duty rates or want to save duties on imports, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Japan claims national security threat the reason for limiting exports of chemicals to South Korea.

July 15, 2019 By in Japan, Uncategorized Tags: , Leave a comment
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On July 1st, the Japanese government began restricting exports of two chemicals, fluorinated polyimide and hydrogen fluoride; chemicals needed to produce semiconductors and smartphone and television screens. South Korea is dependent on Japan for this supply. Japanese officials claim the chemicals are “controlled items” (goods with civilian and military applications), and have been “inadequately managed” by South Korean companies.

However, South Korean officials believe the real motive for restricting imports of the two checmicals is a political dispute between the two countries and a recent South Korean court ruling that resulted in the seizing of assets of a Japanese company to pay for reparations for Japan’s actions during World War II.

Japanese exporters of the chemicals now need a license for each one with delays taking up to 90 days. In the meantime, South Korean companies are looking for new suppliers even though stockpiles of the checmicals are enough to meet the current demand.

As in most disputes between two nations, the citizens (well, businesses) lose, South Korean companies can’t purchase the chemicals they want and Japanese companies can’t sell the chemicals they don’t need.

CBP stops invasive Scarab beetle pests from entering the US.

July 15, 2019 By in Uncategorized, wood wasps, wooden packaging materials Tags: , , , , , , , 1 Comment
Manatee

Scarab beetle, source: CBP.gov

U.S. Customs and Border Protection (CBP) agriculture specialists in Florida stopped several invasive pests from entering the US – specifically the scarab beetle and heteroptera. The scarab beetle can infest and destroy crops while the heteroptera is known to damage plant roots.

According to the CBP media release, agriculture specialists in 2018 seized on average 319 pests at U.S. ports of entry and 4,552 materials for quarantine: plant, meat, animal byproduct and soil each day!

If you have had a Customs seizure due to an infestation of pests or wood-boring insects in wooden packaging materials – contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Huawei laying off hundreds of US workers.

July 15, 2019 By in Huawei, Uncategorized Tags: , , Leave a comment
black huawei android smartphone

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As reported by the Wall Street Journal, Chinese telecommunications firm Huawei will lay off hundreds of workers at their research subsidiary – Futurewei Technologies. Futurewei is the US-based research and development arm for Huawei and employs roughly 850 people nationwide.

According to public records, Futurewei was founded in 2001 in Plano, Texas. I just checked online, and the website www. futurewei.com already appears to be offline.