Category Archives: ADD/CVD

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

August 3, 2019 By in ADD/CVD, tariff engineering, Uncategorized Tags: , , , , , Leave a comment
surgical scissors

Photo by Ekrulila on Pexels.com

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.

July 21, 2019 By in ADD/CVD, tariff engineering, Uncategorized Tags: , , , , , , Leave a comment
group of persons wearing yellow safety helmet during daytime

Photo by Pixabay on Pexels.com

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.

July 12, 2019 By in ADD/CVD, Indonesia, Korea, Uncategorized, utility wind tower, wind tower Tags: , , , , , Leave a comment
agriculture alternative energy clouds countryside

Photo by Pixabay on Pexels.com

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.

US Mexico tomato dispute – US demands 100% review of all tomatoes within 72 hours of shipment.

July 12, 2019 By in ADD/CVD, Mexico tomatoes, Uncategorized Tags: , , , , Leave a comment
photography of tomatoes near basil leaves

Photo by monicore on Pexels.com

According to publimetro.com.mx, the Secretary of Economy of Mexico, Graciela Marquez claims the US is inflexible in their demand to review 100% of tomato shipments at the border within 72 hours. The Mexican Government claims the US does not have enough man power to process the tomatoes.

The current tomato dispute stems began in 1996, when tomato growers in Florida initiated antidumping investigations against Mexican tomato exports. A deal was reached in November 1996 between Mexican growers and the Department of Commerce that led to the suspending of the investigation. The suspension was renewed in 2002, 2008 and 2013. However, earlier this year, Florida tomato growers complained the Mexican growers were violating their end of the deal. Since May of 2019, Mexican tomato exporters have had to pay a countervailing duty rate of 17.5% before the tomatoes can be exported into the United States.

The final determination will be issued on September 19, 2019 followed by a final determination regarding the damages to the industry due on November 1, 2019.

Mexico is the world’s largest tomato exporter in 2018, with external sales of $2.3 billion dollars of which 99.7% of its exports are to the US.

Canadian sofa bed manufacturer no longer shipping to US due to 1,732% duties on Chinese mattresses.

July 12, 2019 By in ADD/CVD, mattress, Uncategorized Tags: , , , , , , , , Leave a comment
photo of living room

Photo by Milly Eaton on Pexels.com

According to a news article from the vancouverisawesome.com webasite, a Vancouver-based company has cancelled shipping their sofa beds into the US due to the 1,732% antidumping duty on Chinese mattresses that are used in their sofa beds. The U.S. Department of Commerce in May dumping rates of 34% to 75% for some Chinese manufacturers with an “all others” rate of 1,732%.

The company claims their sofa beds costing $600 will cost $113,000 due to the tariffs because the sofa beds include the mattress.

Fortunately the company does not only sell beds, and can rely on their Canadian made products. In fact, being made in Canada will probably make this company more competitive than their competitors who rely on Chinese imports for other goods that are likely covered under Lists 1-3 and a potential List 4.

The Commerce Department has set October 11, 2019 as the announcement date for their final decision on antidumping duties for mattresses imported from China.

If you have questions on how this or any other antidumping duty or countervailing duty will impact you and your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US to impose tariffs of up to 74% on fabricated structural steel from Mexico.

July 12, 2019 By in ADD/CVD, Uncategorized Tags: , , , , , , Leave a comment
view of factory against blue sky

Photo by Pixabay on Pexels.com

According to Mexico News Daily, the U.S. Department of Commerce announced the results of a countervailing duty investigation found that Mexican steel exporters were subsidized by their government at rates from 0.01% to 74.01%. Besides Mexico, investigations of steel imports from China found subsidy rates of 30% to 177%. The investigation was brought by the Chicago-based American Institute of Steel Construction.

Separate investigations considered steel imports from Canada and China, and tariffs ranging from 30% to 177% will be imposed on product shipped to the United States by companies in the latter country. In Canada’s case, steel exporters were found to be receiving subsidies of less than 0.5% and no tariffs will be imposed. Imports of fabricated structural steel from Mexico totaled $622.4 milion last year.

In order to maintain competitiveness with foreign producers, the countervailing duty (CVD) rate is assesed against importers at a rate equal to the subsidy rate. One notable company subject to investigation and a 74.01% tariff is Swecomex, a subsidiary of Grupo Carso, which is owned by billionaire businessmen Carlos Slim, and Preacero Pellizzari Mexico.

The final determinations of its countervailing duty investigations will be announced on or about November 19th.

If you have any questions how these duties will impact your business, contact experienced AD/CVD attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US imposes 400% duties on steel imports from Vietnam.

July 5, 2019 By in ADD/CVD, U.S. Customs and Border Protection, Uncategorized Tags: , , Leave a comment
blue plastic chairs and a girl

Photo by Nate Cohen on Pexels.com

In early July, the Commerce Deparatement said certain products produced in South Korea and Taiwan were sent to Vietnam for minor processing before being exported to the US. The steel included corrosion-resistant stell and cold-rolled steel. The Commerce department imposed duty rates as high as 456.23% on imports from Vietnam if they were using material from South Korea or Taiwan.

While Vietnam has been benefitting from the increased duties against Chinese goods – Vietnam’s shared border with China helps the supply chain for manufacturers who go south of the border to avoid the 301 China duties.

However, Trump was quoted as saying Vietnam as the ““almost the single-worst abuser of everybody”, a statement viewed as a potential hint of the next target of his sanctions.

Vietnam is not alone in having companies “tranship” goods through Vietnam to avoid paying tariffs. CBP is also investigating six American companies for evading anti-dumping duties who importing carbon steel pipe fittings through Cambodia.

If you have any questions about anti-dumping, or would like to know how to reducing AD/CVD duties or under investigation for transshipment. Contact experienced antidumping attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Vietnamese Furniture makers win in Trump’s trade war.

July 5, 2019 By in ADD/CVD, furniture, transshipment, Uncategorized Tags: , , , , , , Leave a comment
woman standing beside white motor scooter

Photo by Ba Phi on Pexels.com

A Bloomberg article highlights one of the winners in Trump’s trade war with China – that being Vietnamese furniture manufacturers.

With imports of Chinese furniture subject to a 25% duty in addition to any applicable anti-dumping or countervailing duties, furniture companies in Vietnam are cashing in as the tariff-free alternative to Chinese manufacturing.

The Bloomberg article quotes, the CEO of Xuan Hoa Vietnam Joint Stock Co., a furniture company that has seen a boom in international visitors – including Ikea. Xuan Hoa is a long time Ikea manufacturer (past 17 years) and their ability to produce cheaper than China is only increasing under the trade war.

In addition to not being subject to 301 duties or AD/CVD duties, the Bloomberg article cites labor costs half of what they are in China and lower electricity costs as it is subsidized by the government. Vietnam’s shared border with China also allows for the ease of materials and components.

If you are a furniture importer from China and want to learn how to save on import duties, contact trade and customs attorney by mobile/text at 832-896-6288 or by email at attorney.dave@yahoo.com or dh@gjatradelaw.com.

17.5% tariffs on Mexican tomatoes.

May 8, 2019 By in ADD/CVD, Mexico tomatoes, tomato, Uncategorized Tags: , , , , , Leave a comment
man and woman holding wine glasses

Photo by rawpixel.com on Pexels.com

While we frequently hear “tariff” and “China” in the same sentence, we will likely now start hearing “tariff” and “Mexico” more frequently as the Trump administration has placed near tariffs on imports of fresh tomatoes from Mexico.

A little background – in 1996 the US did not pursue tariffs on Mexican tomAatoes based off assurances from Mexican tomato growers would not sell their tomatoes at articially lower prices. However, last year Florida tomato growers requested the Trump administration to investigate whether Mexican tomatoes were being sold at articially low prices. In February 2019, the Trump administration issued a notice they would withdraw from the 1996 agreement on May 7th if a new deal could not be reached. Since no agreement was reached, Mexican tomatoes are now subject to a 17.5% tariff. If a subsequent investigation finds no unfair pricing, then any tariffs paid will be refunded.

Questions about the tomato tariffs, call/text David Hsu at 832.896.6288 or email at attorney.dave@yahoo.com.

Blue Furniture Solutions reach plea deal on lying to avoid paying tariffs.

April 14, 2019 By in ADD/CVD, furniture, Uncategorized Tags: , , Leave a comment
apartment bed bedroom book shelves

Photo by Medhat Ayad on Pexels.com

Jeff Zeng, President of Blue Furniture Solutions in Miramar, Florida signed a plea agreement in March admitting his participation in a plan to avoid payment of tariffs.

As you are aware – furniture from China, especially wooden bedroom furniture is subject to antidumping and countervailing duties. Most importers attempt to avoid the duties by shipping the goods from China to Vietnam/Malaysia/Indonesia and relabeling the boxes as any other country but China – a practice known as transshipment.

However, Blue Furniture Solutions and instead tried to get around the duties (as high as 216% percent) by submitting customs forms mislabeling their furniture. Most likely they reported the country of origin as some place other than China.

If you are a furniture importer and are interested in looking at ways to save on duties – there are some ways our firm can help. Email antidumping and countervailing duty attorney David at attorney.dave@yahoo.com or call/text 832.896.6288 for a free, confidential consultation.