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

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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.

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.

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.

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.

Huawei sues US Government, argues government ban on Huawei equipment is unconstitutional.

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China’s Huawei sued the United States government on Wednesday in the United States District Court in Plano, Tex., arguing the 2019 National Defense Authorization Act is unconstitutional because it bans government agencies from contracting with Huawei or companies that use the company’s equipment.

Specifically, Huawei claims Congress violated constitutional principles on the separation of powers and also the bill of attainder clause, by enacting legislation that specifies a person or entity for punishment without trial.

Huawei’s claim is not new, in the past, Russian based Kaspersky Lab filed a similar suit in 2017 after the Department of Homeland Security banned Kaspersky products from Federal agencies. A judge dismissed the lawsuits as there was a legitimate desire to protect American networks. If the U.S. Government can likewise prove a similar claim in the instant suit, Huawei may likely face the same result of Kapersky.

The US has argued that Huawei equipment poses a risk because it is used by Chinese authorities to spy on the communications. As such, many US wireless carriers have avoided using Huawei equipment.

More information will be posted as it becomes available.

Chinese exports drop 20% from last year.

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According to the General Administration of Customs in China, Chinese exports fell 20.7% from this time a year ago. Causes for the slow down may be related to a slow down in global demand for Chinese goods and the Chinese New Year holiday in February.

January and February 2019 customs data showed exports down 4.6% compared to 2018 data, indicating a slowing global economy and not the trade war is the cause.

The country’s exports to the U.S. fell 26.2% last month, while imports from the U.S. dropped 28.6%, leading to a bilateral trade surplus of $14.72 billion, a two-year low.

Check back for more trade law news.

US Kitchen cabinet companies petition for anti-dumping duties against Chinese cabinet producers.

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The American Kitchen Cabinet Alliance (AKCA) filed a petition with the International Trade Commission to impose antidumping duties and tariffs on imports of cabinets from Chinese manufacturers.

The AKCA claims the $10 billion cabinet industry is being harmed by imports of cabinets from Chinese manufacturers. The AKCA claims U.S. cabinet manufacturers have seen poor financial performance despite a 12.5% increase in the number of housing units completed in the U.S. The AKCA blames cheap imports from China for their financial decline.

The petition to the ITC by AKCA claims the kitchen cabinets from China are also sold at a below normal value and the AKCA is requesting an ADD rate of 175.5% to 259%.

If you are an importer or manufacturer of kitchen cabinets and ahve questions how the investigation on kitchen cabinets may impact you, contact attorney David Hsu at attorney.dave@yahoo.com or by text/call at 832.896.6288.

Trump hints at delay of additional duties originally set for March 1st.

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According to CNBC, President Trump says he will delay additional China tariffs originally scheduled to start on March 1. In a series of posts on Twitter, President Trump indicated a delay for the imposition of “List 3” of duties under Section 301 because of “substantial progress” in trade talks currently underway between the US and China.

While the tweets hint at a delay, there was no hint of a revised deadline to reach an agreement with China. Time will tell whether the US and China can reach an agreement on the key issues of intellectual property protection and forced technology transfer.

In other news, a late March meeting between President Trump and Chinese President Xi Jinping will likely occur at Trump’s Mar-a-Lago golf club in Palm Beach, Florida.

More updates will be posted as they became available.

Investigation on Certain Fabricated Structural Steel from Canada, Mexico, and China.

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Yesterday, the American Institute of Steel Construction, LLC (AISC) filed a petition to assess antidumping and countervailing (AD/CVD) duties on imports of certain fabricated structural steel from Canada, Mexico and China.

The scope covers:

The merchandise covered by this investigation includes carbon and alloy (including stainless) steel products such as angles, columns, beams, girders, plates, flange shapes (including manufactured structural shapes utilizing welded plates as a substitute for rolled wide flange sections), channels, hollow structural section (HSS) shapes, base plates, plate-work components, and other steel products that have been fabricated for assembly or installation into a structure (fabricated structural steel). Fabrication includes, but is not limited to, cutting, drilling, welding, joining, bolting, bending, punching, pressure fitting, molding, adhesion, and other processes.

Fabricated structural steel products include products in which iron predominates and the carbon content is two percent or less by weight. Most notably, the investigation and potential duty orders will apply to fabricated structural steel.

The products subject to the investigation are currently classified in the Harmonized Tariff Schedule of the United States (HTSUS) under subheadings: 7308.90.9590, 7308.90.3000, and 7308.90.6000.
The products subject to the investigation may also enter under the following HTSUS subheadings: 7216.91.0010, 7216.91.0090, 7216.99.0010, 7216.99.0090, 7228.70.6000, 7301.10.0000, 7301.20.1000, 7301.20.5000, 7308.40.0000, 7308.90.9530, and 9406.90.0030.

If you have any questions how the investigation and potential antidumping or countervailing duties will impact your business, call experienced trade and customs attorney David Hsu at attorney.dave@yahoo.com or call/text: 832-896-6288.