Phase 1 of the China trade deal explained.

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Earlier this week, US and Chinese representatives met for the 13th time in ongoing negotiations to reach a trade deal. On Friday, President Trump outlined what has been referred to as “Phase 1”:
1. Suspension of tariff hike set for October 15th that would have increased tariffs from 25% to 30% on $250 billion in Chinese goods.
2. Some intellectual property protections on copyrights, trademarks and piracy (no movement on technology transfers, data flows, cyber security, product standard reviews or the new social credit system.
3. China’s commitment to purchase $50 billion in US agricultural products
The announcement is short on details and more information should be available in 5 weeks and details will be posted as soon as they are available.
If you have any questions how these duties will impact your business, or for any questions on trade with China, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

China reduces penalties for importation of unapproved drugs – improving access for its citizens.

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In late August, the Chinese government said they would reduce the penalties for the sale and import of unapproved drugs, thereby improving access to cheaper generic pharmaceuticals from other countries. This action was taken to allow greater affordable drugs for chronic diseases increasingly impacting the Chinese population.

The reduction in penalties is set to take effect on December 1st. Current penalties for people selling drugs that are not approved by the National Medical Products Administration could result in a fine and criminal prosecution with jail sentences up to 3 years.

For example, under the new law, cheaper generic drugs made outside of China could be imported and sold in China. One drug cited in the article was the Indian version of the lung-cancer drug Iressa cost $10 a day in 2016, compared with $100 a day for the patented drug in China. He said generic drugs cost, on average, 97 percent less than patented drugs sold in China.

If you want to be sure you are compliance with US FDA regulations, contact experienced compliance attorney David Hsu by phone or text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US and China trade talks to resume in October.

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The office of the US Trade Representative (USTR) confirmed on Thursday that a deputy-level meeting would be held in mid-September to discuss plans for trade talks in October.
This past Sunday, new tariffs on US$125 billion of Chinese imports, including shoes and smartwatches, came into effect after President Trump said he was disappointed in China’s lack of effort to buy US farm goods. In return, China responded with duties on $75 billion of American goods, affecting crude oil exported from the US.
The agreed to talks in October will hopefully resolve the 13-month trade war between the two countries.
If you have any questions how your company may be impacted by the US/China trade war – contact experienced trade attorney David Hsu at by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

USTR to open comment period on List 4.

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This past Thursday, the US Trade Representative (USTR) gave formal notice of the plan to raise tariffs on $300 billion of Chinese imports from 10% to 15% starting December 15th. The formal notice starts the opportunity for importers or anyone impacted by the potential tariffs to submit comments. The comments are an opportunity for businesses to tell the White House why the tariffs are good or bad. As in the past, comments have been both supportive and critical of the potential tariffs.
This round of tariffs encompasses goods on “List 4” and includes mostly consumer goods – such as smartphones, computers, and other consumer electronics.
If you want to submit comments regarding any goods on “List 4”, contact experienced trade and customs attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Chinese-owned very large crude carrier changed name to evade oil sanctions.

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According to Reuters, a Malaysia-bound boat named the Pacific Bravo carrying a potential $118 million USD of crude oil disappeared and reappeared under a new name, the Latin Venture. The newly named Latin Venture has the same unique identification number as the Pacific Bravo: IMO9206035. As the unique identification number stays with the ship, the new name suggests someone was trying to avoid Iran oil sanctions. This prompoted the US government to warn parts in Asia to not allow the ship to dock. The shipment of Iranian crude oil violates economic sanctions in place against doing business with Iran.

The Trump administration reimposed sanctions on Iran in November and withdrawing from the 2015 Iran deal aimed at limited Iran’s nuclear program. And in an effort to reduce Iran’s oil sales, this past May the US ended sanction waivers to some importers of Iranian oil.

If you want to be sure your exports are in compliance with the current Iranian sanctions, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

CBP seizes $1 million dollars worth of counterfeit phones.

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Image of the seized phones, source: cbp.gov

According to a U.S. Customs and Border Protection (CBP) media release, officers in Philadelphia seized a a combined 4,449 counterfeit LG and ASUS smartphones in July. If the phones were authentic, they would have a manufacturer’s suggested retail price (MSRP) of $941,450.

The counterfeit phones were shipped from China and included 2,043 counterfeit LG phones in the first shipment and 1,926 LG and 480 ASUS counterfeit smartphones in the second shipment.

According to Customs, the phones were shipped from China to the Dominican Republic and then to Philadelphia. The phones were described in the paperwork as “cell phones used”. CBP says the phones will be destroyed.

If you have had your cell phones seized, contact experienced cellphone seizure attorney David Hsu immediately at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

CBP says the phones will be “destroyed”, however, there hasn’t been enough time from the date of the seizure to the date of the media release – there is still time to do something to get the phones released.

There are ways to get the phones released, contact David Hsu immediately – time is of the essence!

China threatens retaliation if India bans Huawei.

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According to a Reuters article, China has warned India not to block Huawei from doing business in the country, warning there could be consequences for Indian firms operating in China.

Part of the warning comes as India is holding trials for a 5G networking in the upcoming months and has not yet determined whether they will invite Huawei to take part in the rollout of 5G in India.

The Reuters article says Indian companies do not have a larger presence in China, but do have manufacturing, healthcare, financial services and outsourcing companies there.

India is currently evaluating bids from 5G firms such as Ericcson, Nokia, Samsung and officials have not yet confirmed Huawei will take part. The Indian Department of Telecommunications have found no evidence of Huawei capabilities of a backdoor or malware to collect data and the Indian Ministry of Home Affairs has issued no directive to curtail Huawei’s entry.

Trump delays List 4 tariffs until December 14th.

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The Trump administration has postponed the levying of 10% tariffs on List 4 goods covering $300 billion in imports from China until December 15th. The initial date of September 1st was postponed after reports of a phone call with Beijing.

A new round of trade talks will be held in September after this month’s talks did not result in a trade deal.

There is still time to lower your import risk, if you would like solutions to lowering the duties you need to pay, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Children in China forced to produce Amazon Alexa devices. Where’s the outrage?

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According to the Guardian, a leaked document by China Labor Watch details school children in China forced to work over night to produce Amazon Alexa devices. The children were required to work nights and overtime to produce the smart-speaker devices at Foxconn, an OEM manufacturer supplying Amazon’s Alexa-enabled devices.

The documents delivered to the Guardian indicate teenagers from schools and technical colleges in China were classified as “interns” with teachers being paid by the factory to accompany the students. The legal age of employment is 16, but school children are not allowed to work at night or overtime.

One “intern” quoted in the report said they were applying protective film on 3,000 Echo dots a day for 10 hours a day, six days a week for $2.34 an hour. When the intern complained, their teacher told them they had to work or else it may impact their ability to graduate from school.

Foxconn admitted students were working and they vowed to take action to remedy the problem. As Foxconn is also the OEM for Apple’s iPhone, it is unknown whether school children also made those devices.

It will be interesting to see what penalty Amazon will face. Most likely there will be a disparity in punishment – for example, the Ivory Coast is facing a potential ban of cocoa to the US due to the use of child labor; but there is no discussion for a ban of Amazon Alexa products. tudying computing, was given the task of applying a protective film to about 3,000 Echo Dots each day. Speaking to a researcher, she said she was initially told by her teacher that she would be working eight hours a day, five days a week, but that had since changed to 10 hours a day (including two hours’ overtime) for six days a week.

Will post more Amazon child labor violations as soon as they become available.

US Companies can no longer do business with Huawei on August 19th.

In May, the Trump administration placed Huawei on the BIS entity list – a list of foreign organizations with whom U.S. companies are restricted from doing business with due to national security concerns. The Trump administration believes the Chinese government has influence over Huawei and that certain Huawei equipment and technology may allow the Chinese government to spy using the Huawei equipment – especially the planned 5G equipment Huawei has developed.

Even though Huawei is on the BIS entity list, the Trump administration issued a 90-day exemption to the ban, allowing U.S. companies to sell certain products and services to Huawei. However, this 90-day exemption will end on Monday, August 19th.

It is unknown whether the U.S. government will issued another extension. Given the current situation in Hong Kong and the lack of progress on US/China trade talks, the Trump administration will likely not grant another extension.

Will post any additional Huawei news as it becomes available. If you have any questions or concerns about whether your business can continue business with Huawei, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.