Florida Tomato Exchange asks Commerce Department to reopen antidumping investigation

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On Monday, the Florida Tomato Exchange requested for continuation of the antidumping investigation of fresh tomatoes from Mexico. This is surprising as the investigation was suspended on September 19, 2019, when a new suspension agreement between the Department of Commerce and Mexican growers and exporters went into effect.
The reason for the reopening of the investigation is that the Mexican tomato industry doesn’t agree with the agreement, even though they voluntarily signed the agreement last month.
While the investigation may be reopened, the suspension agreement is not automatically terminated. Once the new investigation is completed, Commerce and the International Trade Commission is tasked to determine whether or not Mexican tomatoes were dumped into the US and whether it caused injury to the US tomato industry. If there is a finding of injury, then the agreement will stay in place – if there is no finding, the agreement will be terminated.
If there is an affirmative finding, the Mexican growers have the option to withdrawal from the agreement, triggering another 90-day time frame to renegotiate before antidumping duties are imposed.
If you have any questions about this or any other antidumping and countervailing duty action, contact trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US China exchange good will measures prior to next trade talks.

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US and China will send mid-level negotiators to meet in a few weeks prior to higher level talks afterwards. In advance of the meetings, both sides have displayed signs of good will – for example, the US rescheduled the proposed October 1st deadline for new tariffs to take effect to October 15th, as October 1st is the 70th anniversary of the founding of the People’s Republic of China (PRC).
China on the other hand, has indicated their importers are looking to increase purchases of American agricultural products such as soybeans, pork and other farm goods.
US Trade Representative Robert Lighthizer has indicated the talks will occur sometime in October. I don’t believe an agreement can be reached – the US is using trade as a leverage against China’s ambitions to be the world leader in robotics, artificial intelligence and high tech industries (2025), along with allegations of steal trade secrets and forcing foreign firms to participate in joint ventures with required tech transfers.
If you have any questions about how the current 232 or 301 duties will impact your business, contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US and Mexico reach deal to end tomato dispute.

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According to Reuters, Mexican tomato growers and the Trump administration reached a deal to end a potential anti-dumping investigation and end a tariff dispute. The agreement means many Mexican tomato exports will be subject to U.S. border inspections, and specialty tomatoes face higher reference prices on the American marketplace.

The negotiations began back in May when the Trump administration imposed a 17.5% tariff on Mexican tomatoes after the parties did not reach an agreement.

The Commerce Department said the new deal will ensure sales do not fall below certain prices for Mexican tomatoes and allows a mechanism to audit up to 80 Mexican tomato producers per quarter, or more.

If you have any questions how the tomato deal may impact your business – contact experienced trade attorney David Hsu at dh@gjatradelaw.com or attorney.dave@yahoo.com.

Commerce Department finds dumping of refillable stainless steel kegs from Mexico.

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Earlier today, the U.S. Department of Commerce issued an affirmative final determination in the antidumping (AD) investigation of imports of refillable stainless steel kegs from Mexico.

Here’s a summary:

  1. Commerce found that exporters from Mexico have been selling refillable stainless steel kegs at less than fair value in the United States at a rate of 18.48 percent.
  2. After today, Commerce will instruct U.S. Customs and Border Protection to continue to collect cash deposits equal to the applicable final weighted-average dumping rate.
  3. Last year, imports of refillable stainless steel kegs from Mexico were valued at an estimated $13.4 million.
  4. The US manufacturer is the American Keg Company, LLC located in Pottstown, Pennsylvania.

So far into Trump’s administration, the Commerce Department has initiated 179 new antidumping/countervailing duty investigations – a 231% increase from the same time during the Obama administration.

The full text of the affirmative determination can be found at the following link:

https://enforcement.trade.gov/download/factsheets/factsheet-mexico-refillable-stainless-steel-kegs-ad-final-081319.pdf

If you have any questions how this new AD determination will impact your business or would like to discuss ways to reduce your AD/CVD duties, contact experienced trade attorney David Hsu at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Commerce issues affirmative preliminary determination in CVD investigation of wooden cabinets and vanities.

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The U.S. Department of Commerce has issued affirmative preliminary determination CVD investigation of wooden cabinets and vanities from China, finding that exporters received countervailable subsidies ranging from 10.97 to 229.24 percent.
As such, Commerce will instruct CBP to start collecting cash deposits from importers of wooden cabinets and vanities from China. Last year, imports of wooden cabinets and vanities from China were valued at an estimated $4.4 billion. The final CVD determination is expected to be on or about December 17, 2019. A final injury determination will then be announced on January 30, 2020.
The announcement and preliminary rates can be found here.
If you have any questions about importing wooden cabinets and vanities, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

US collected $63 billion in tariffs through June.

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According to the Wall Street Journal, the Treasury department’s tariffs is expected to generate almost $72 billion in tariffs through June of this year. This number will likely go much higher if the “List 4” duties take effect on September 1st. On September 1st, over $300 billion in Chinese goods will be subject to a 10% tariff with a potential to increase to 25%.

Specifically, as of June 30th, the Treasury department has collected $63 billion in tariffs over the past 12 months. In contrast, prior to the trade war, the US only brought in $30 billion dollars.

The WSJ estimates the annual generated amount can be as high as $100 billion by the end of the year once the 10% duties are placed on over $300 billion worth of imported goods from China.

If you have any questions how the current 301 duties or proposed List 4 duties will impact you, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Senator Rubio comments on the investigation of tomatoes from Mexico.

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U.S. Senator Marco Rubio issued a statement today about the ongoing antidumping investigation on fresh tomatoes from Mexico (Inv. No. 731-TA-747).

Senator Rubio said that “U.S. tomato growers should not have to lose their livelihoods due to a deal imposed on them by their own government”, adding that the loss of livelihood happened under the previous agreement.

Also stating: “The fact remains that the Mexicans have avoided serious negotiations for well over a year, preferring to use scare tactics and inflammatory rhetoric to try to force President Trump and Secretary Ross to back down on their commitment to ensure that American tomato growers are able to fairly compete in our own domestic market.”

Key upcoming dates in this investigation:

09/03/2019: Prehearing Report
09/10/2019: Prehearing Briefs
09/19/2019 9:30 am: Hearing
09/26/2019: Posthearing Briefs
10/10/2019: Report to the Commission
10/17/2019: Record Closing
10/21/2019: Final Comments
10/23/2019: Proposed Vote
11/04/2019: Determination(s) Issued
11/04/2019: View(s) Issued
11/04/2019: End

If you have any questions about how this investigation will impact you, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

019: Report to the Commission
10/17/2019: Record Closing
10/21/2019: Final Comments
10/23/2019: Proposed Vote
11/04/2019: Determination(s) Issued
11/04/2019: View(s) Issued
11/04/2019: End

If you have any questions about how this investigation will impact you, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Easy to understand version of the Chinese billionaire’s scam to avoid paying duties on aluminum.

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Who is involved:
Chinese billionaire: Zhongtian Liu
His company: China Zhongwang Holdings Ltd.
Key players according to investigators: Zhaohua Chen, Xiang Chun Shao, Perfectus Aluminum Inc, Perfectus Aluminum Acquisitions, four LLC’s that owned the warehouses. A business agent named Po-Chi

What was he importing:
Aluminum pallets that appeared to be “finished” to avoid duties on unfinished aluminum extrusions. The pallets were “spot-welded” to appear to be finished pallets.

Purpose of scam:
Unfinished aluminum is subject to a high rate of duty (up to 400%)

How he scammed Customs:
He imported the aluminum as finished aluminum pallets. Finished aluminum pallets have a lower duty.

How did the scam work?
1. Import aluminum pallets instead of extruded aluminum. Manufactured pallets avoid the duties versus extruded aluminum.
2. The pallets were then stored in warehouses.
3. The pallets were “sold” to entities owned by the billionaire to inflate sales and deceive investors.
4. Investigators believed Liu was going to build a smelting plant to melt the palllets then sell as raw aluminum. The aluminum imported was a higher grade and used in applications such as surgical tools.

How big ($) was the scam?
A total of 2.2 million pallets were imported from 2011 to 2014.
Customs believe the billionaire avoided paying $1.8 billion.

When was the scam discovered?
Started in 2017 with notice of the charges released this week.

What will happen to the people charged?
Probably not much, Liu and the defendants are in China and the US cannot extradite them (no treaty with China).

If you have any questions about limiting your tariff liability the legal way – contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Chinese manufacturers return to China leaving ‘inefficient’ Vietnam.

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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.

New antidumping investigation on utility scale wind towers from Canada, Indonesia, Korea and Vietnam.

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Earlier this week, Arcosa Wind Towers and Broadwind Towers, Inc (Petitioners) petitioned for an investigation on utility scale wind towers from Canada, Indonesia, Korea and Vietnam. The merchandise covered in this scope consists of certain wind towers, whether or not tapered, and sections thereof. Certain wind towers are designed to support the nacelle and rotor blades in a wind turbine with a minimum rated electrical power generation capacity in excess of 100 kilowatts and with a minimum height of 50 meters measured from the base of the tower to the bottom of the nacelle (i.e., where the top of the tower and nacelle are joined) when fully assembled.

A wind tower section consists of, at a minimum, multiple steel plates rolled into cylindrical or conical shapes and welded together (or otherwise attached) to form a steel shell, regardless of coating, end-finish, painting, treatment, or method of manufacture, and with or without flanges, doors, or internal or external components (e.g., flooring/decking, ladders, lifts, electrical buss boxes, electrical cabling, conduit, cable harness for nacelle generator, interior lighting, tool and storage lockers) attached to the wind tower section. Several wind tower sections are normally required to form a completed wind tower.

Wind towers and sections thereof are included within the scope whether or not they are joined with nonsubject merchandise, such as nacelles or rotor blades, and whether or not they have internal or external components attached to the subject merchandise.

Specifically excluded from the scope are nacelles and rotor blades, regardless of whether they are attached to the wind tower. Also excluded are any internal or external components which are not attached to the wind towers or sections thereof, unless those components are shipped with the tower sections.

Merchandise covered by this investigation is currently classified in the HTSUS under subheading 7308.20.0020 or 8502.31.0000. While the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the investigation is dispositive.

The listed producers are CS Wind, Enercon Canada, Fabrication Delta, Marmen, Kenertec, Korindo Wind, Dongkuk S&C, Speco, Win&P, Ltd., CS WIND Vietnam Co., Ltd, Vina Halla Industrial Company, UBI Tower Sole Member Co. LTD.

If you are a manufacturer or importer of utility scale wind towers and want to know your options, contact David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com. Time is of the essence in antidumping investigations so you need to act soon.