Key 2019 Trade Deadlines.

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Happy new year everyone! Hope your new year is off to a great start.

2018 was a busy year for trade policy and 2019 will likely continue that trend. Here’s some important dates for trade in this new year:

1/1/2019 – the updated US trade agreement with South Korea signed in September 2018 will enter into force.

1/7/2019 – during this week, a US delegation will travel to Beijing for trade talks with Chinese officials. This will be the first face to face meeting since President Trump met with President Xi Jinping at the G20 summit on December 1st.

1/7/2019 – while a delegation goes to Beijing, the EU Trade Commissioner will meet with USTR Robert Lighthizer on other trade negotiations with the EU.

1/10/2019 – this is the deadline for submission of comments by US businesses regarding restrictions on high-tech American exports such as microprocessors and robotics

1/21/2019 – the US and Japan will likely enter into formal talks for a trade agreement.

2/17/2019 – deadline for the U.S. Department of Commerce to publish their report on the justification of tariffs on foreign cars. Once a report is submitted, President Trump has 3 months (May 18th) to make a decision on tariffs for foreign cars.

3/1/2019 – end of the 90-day truce started on December 1st. If no trade agreement is reached, $200 billion of Chinese goods will see increased tariffs from 10% to 25%.

4/2019 – deadline for the U.S. Department of Commerce to publish a national-secuirty report on the impact of uranium imports.

1st half of 2019 – congress will vote on the U.S.-Mexico-Canada Agreement to replace NAFTA.

Check back for more updates as they become available. If you have any questions how these upcoming events will impact your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

DOJ’s ‘China Initiative’ to investigate and prosecute Chinese companies for FCPA violations.

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84th US Attorney General – Jeff Sessions. Source: justice.gov

As released on the justice.gov website on November 1st, then acting Attorney General Jeff Sessions announced the “China Initiative” fact sheet on the Department of Justice (DOJ) website.

The purpose of the China Initiative is in response to several Trump administration reports that showed concern regarding China’s trade practices and “various acts, polices and practices of Chinese industrial policy uses in seeking to acquire the intellectual property and technologies of the world and to capture the emerging high-technology industries that will drive future growth”.

The release also explains in detail the National Security Division (NSD): “The National Security Division (NSD) is responsible for countering nation state threats to the country’s critical infrastructure and private sector. In addition to identifying and prosecuting those engaged in trade secret theft, hacking and economic espionage, the initiative will increase efforts to protect our critical infrastructure against external threats including foreign direct investment, supply chain threats and the foreign agents seeking to influence the American public and policymakers without proper registration.”

According to the release, the goals of the China Initiative include:

  1. — Identify priority trade secret theft cases, ensure that investigations are adequately resourced; and work to bring them to fruition in a timely manner and according to the facts and applicable law;
  2. — Develop an enforcement strategy concerning non-traditional collectors (e.g., researchers in labs, universities, and the defense industrial base) that are being coopted into transferring technology contrary to U.S. interests;
  3. — Educate colleges and universities about potential threats to academic freedom and open discourse from influence efforts on campus;
  4. — Apply the Foreign Agents Registration Act to unregistered agents seeking to advance China’s political agenda, bringing enforcement actions when appropriate;
  5. —Equip the nation’s U.S. Attorneys with intelligence and materials they can use to raise awareness of these threats within their Districts and support their outreach efforts;
  6. — Implement the Foreign Investment Risk Review Modernization Act (FIRMA) for DOJ (including by working with Treasury to develop regulations under the statute and prepare for increased workflow);
  7. — Identify opportunities to better address supply chain threats, especially ones impacting the telecommunications sector, prior to the transition to 5G networks;
  8. — Identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses;
  9. —Increase efforts to improve Chinese responses to requests under the Mutual Legal Assistance Agreement (MLAA) with the United States; and
  10. — Evaluate whether additional legislative and administrative authorities are required to protect our national assets from foreign economic aggression.

If you have any concerns about whether your Chinese company will have issues or be subject to scrutiny under the new DOJ “China Initiative”, call experienced FCPA attorney David Hsu at 832-896-6288 or email at attorney.dave@yahoo.com.

China drafts new technology transfer law – will this be enough to alleviate US concerns?

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According to a just published South China Morning Post article – new legislation has been introduced in China that banns forced technology transfers. The draft foreign investment law was revealed on Sunday and includes a clause on protection of intellectual property.

According to the SCMP article, the newest version of the law states that “forced technology transfer through administrative measures is prohibited, and technology cooperation should be “based on voluntarily agreed terms and business practices”.

A similar law was written in 2015 but was not enacted at that time. However, given the US/China trade war and one of the main concerns on forced technology transfer – 2019 may see an enactment of the new law. Will update this article as more news peoples available.

If you have any questions regarding, trade, import, export, compliance or FCPA issues and how they may impact your business, contact experienced compliance attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

China and US plan trade negotiations in January.

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According to Bloomberg, China and US held vice-ministerial level talks today to discuss a resolution to the ongoing trade war and are moving closer to a January meeting.

Both sides spoke on the phone and are making arrangements for a face-to-face meeting sometime next month. We’ll see if both sides can reach an agreement concerning the trade imbalance, market access, technology transfers and other trade related matters.

China imports zero U.S. soybeans in November – first time since trade war started.

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According to Reuters, China imported zero U.S soybeans in November, the first time since the trade war started earlier this year. China is the world’s largest soybean buyer and according to Reuters, sourced soybeans from Brazil to replace U.S. soybean imports.

China imported 5.07 million tonnes of soybeans from Brazil in November whereas U.S. soybean imports dropped to only 67,000 tonnes in October (a sharp drop from the 4.7 million tonnes imported to China in November 2017).

Trade in soybeans totaled over $12 billion in 2017 when the U.S. was the second largest supplier of soybeans to China. U.S. soybean imports have a duty of 25%, the same percentage the Trump administration levied on over $200 billion in Chinese goods.

Check back for the latest news. If you have any questions on how to importing/exporting or how the China duties may impact your business – contact experienced trade and customs attorney David Hsu at 832.896.6288 or by email at dattorney.dave@yahoo.com.

TESLA drops China car prices due to tariffs.

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As reported by Reuters in late November, Tesla dropped the price of the Model X and Model S cars by 12 – 26 percent to help make the cars more affordable to customers in China. Back in June of this year, Tesla was one of the first carmakers to raise their prices in response to Tariffs.  The price increase came after a price decrease in May when Tesla lowered prices in China after Beijing said they would cut import tariffs for all auto imports.

The article also indicates Tesla is looking to speed up the construction of their Gigafactory in Shanghai. By producing cars in Shanghai, Tesla shields itself from any future import tariffs.

A few days ago, I wrote a blog post that China is also suspending the increase in tariffs on US cars, not sure if Tesla has raised the prices of their cars following the most recent December announcement.

China set to resume importing oil from the US.

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According to the Financial Tribune, the trading arm of China’s Sinopec and largest buyer of US crude oil – Unipec, will resume purchase of US crude oil very soon at a significant volume.

Unipec has not imported US crude oil in August or September of this year. However, since the “truce” in the US and China trade war in early December where both sides agreed to suspend raising tariffs for an additional 90 days, Chinese refiners have started to look to the US for crude oil.

China suspends 25% tariff increase on US vehicles and auto parts.

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According to the Associated Press this morning, China announced a 90-day suspension of increased tariffs on $126 billion of US cars, trucks and auto parts.

The suspension on Friday was likely a response to President Trump’s December 1st decision to suspend tariff hikes that were set to begin January 1st. These initial China tariffs of 25% were in response to Trump’s 25% tariff on $50 billion of Chinese goods.

The US and China are still working on a solution to solving the trade dispute but no face to face negotiations have been set. Check back for more details as they are available.

China purchases additional 500,000 tons of U.S. soybeans.

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According to CNBC – following the meeting between President Trump and President Jinping Xi earlier this month, Chinese state-owned companies purchased 500,000 tons of U.S. soybeans valued at $180 million.

While the purchase does help, CNBC reports that American farmers have only sold 8.2 million metric tons of soybeans to China this year, down from 21.4 million metric tons during the same period last year.

In addition to U.S. soybean farmers being impacted by the trade war, China is also facing a shortage of soybean supplies and it was reported that in September, Chinese officials considered cutting the soy ration for hogs.

Check back for more news as they become available.