US China trade war update.

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According to a Bloomberg article today, sources close to the negotiations indicate the US and China are working on an agreement to phase one of a trade deal, despite Congress’ recent resolution in support of the Uighur population in Xinjiang coupled with the Trump administration’s signing of a bill supporting pro-democracy Hong Kong protesters.

The agreement will likely occur before December 15th, when the next list of tariffs are set to rise. Currently issues include guarantees of China’s purchases of US agricultural goods and which duties to roll back.

More news will be posted once an agreement has been reached. If you have any questions how the US/China trade war will impact your business, contact David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

 

India says they will not join the largest free trade deal – the Regional Comprehensive Economic Partnership (RCEP).

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Yesterday, India’s Prime Minister, Narendra Modi announced India would not join the Regional Comprehensive Economic Partnership (RCEP).

The RSCEP is a proposed trade deal among 16 countries and has been discussed for the past 7 years and the subject of over 28 rounds of discussion. The RCEP was believed to be the “largest trade deal” because both China and India were expected to participate. China, India and 14-other nations in the RCEP would account for 40% of the world’s GDP.

In a public statement, the government of India cited several reasons to withdraw from the RCEP: (1) India wanted stronger wording on rules of origin, (2) change in the base year for the reduction of duties to be 2019 instead of 2014 and (3) for companies investing in India to procure a certain percentage of local input materials.

The remaining 15 countries have vowed to continue efforts to pass the RCEP with India’s involvement.

Do you have any general trade or customs law questions? Contact David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

China General Nuclear Power Group added to BIS entity list.

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This past Wednesday, the U.S. Department of Commerce added China General Nuclear Power Group (CGN) to the BIS entity list. As a result, American companies are now prevented from selling any products to China’s largest state-owned nuclear company. If any American company or person does business with CGN (or any other listed entity), they would be violating the law and subject to persecution.

The U.S. Department of Commerce claims CGN its subsidiaries engaged in activity to acquire advanced U.S. nuclear technology and material for use in the Chinese military.

China claims the real goal of placing CGN on the entity list is to limit China’s growth under China’s “Made in China 2025” initiative. Made in China 2025 is an effort by the Chinese government to increase the high tech capability and manufacturing of China. If successful, the “Made in China 2025” efforts will make China the a superpower in high technology in Asia.

If you have any questions about your company’s operations and want to ensure compliance with the new entity list addition, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

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

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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.

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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.

FedEx sues Commerce Department.

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On Monday June 24th, FedEx filed a lawsuit against the the U.S. Department of Commerce to avoid having to follow the BIS entity list restrictions the government imposed back in May against doing business with Huawei.

A FedEx statement said “FedEx is a transportation company, not a law enforcement agency,” and that the EAR violates a shipping company’s rights to due process under the Fifth Amendment because all shipping companies are strictly liable for shipments that violate the Export Administration Regulations; without requiring evidence the shippers had knowledge of any violations.

In short, FedEx claims compliance with the new EAR regulations is impossible because FedEx cannot know the origin and technological make-up of all the contents of the shipments it handles.

Will post updates as soon as they are available.

Huawei files lawsuit against Commerce Department for seizing equipment.

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According to Reuters, Huawei Technologies Company, Inc. filed suit against the U.S. Department of Commerce on Friday the 21st claiming the seizure of telecommunications equipment sent from China to the US and back to China was not covered under the Export Administration Regulations (EAR).

Specifically, Huawei claims the equipment was not subject to a license requirement because it did not fit into a controlled category (ECCN) as the hardware was being returned to China from which it came.

The equipment seized is a computer server and ethernet switch sent to California for testing and then seized on the shipment back to China.

Will post more updates as they become available.

The US Department of Commerce bans Huawei and affiliates from sourcing US components.

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On May 15th, the U.S. Department of Commerce officially placed Huawei and 70 of its affiliates on the Bureau of Industry and Security’s (BIS) “entity list.” The ban prohibits US companies from selling and exporting components to Huawei without government approval through an export license.

Placing Huawei on the BIS entity list comes one day after Trump signed an executive order declaring a national emergency regarding telecommunication equipment from “foreign adversaries” who “are increasingly creating and exploiting vulnerabilities in information and communications technology and services.” The impact of Trump’s executive order prohibits U.S. companies from buying telecommunication equipmetn from companies that pose a national security risk. While the executive order does not specifically name Huawei, the order’s exclusion of “foreign adversaries” implies Huawei and other government controlled entities. The Department of Commerce has 4 months and 20 days to determine who is included as a “foreign adversary”.

If you have any questions how Huawei’s placement on the BIS enttiy list may impact you, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

American Farm Bureau Federation supports Commerce Department anti-dumping investigation of Mexican tomatoes.

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The U.S. Department of Commerce will resume anti-dumping investigations into imports of Mexican tomatoes despite a previous agreement not to.

Zippy Duvall, President of the American Farm Bureau Federation indicated an anti-dumping investigation was needed because Mexican producers have increased their market share despite an agreement to ban artificially low prices.

On February 6, 2019, the Department of Commerce notified Mexico they would withdraw from the 2013 Suspension Agreement on Fresh Tomatoes from Mexico under a clause that the signatories may withdraw from the Agreement with “ninety days written notice to the other party”. The expiration of the 90-days is May 7, 2019.

After the withdraw on May 8th, an investigation by the Department of Commerce will continue and will send notification to the International Trade Commission of its final determination.

If you are an importer of Mexican tomatoes or want to know how this may impact you, contact antidumping duty attorney David Hsu at attorney.dave@yahoo.com or by phone/text at 832.896.6288 for a no cost or obligation consultation.

ZTE and Commerce sign escrow agreement – denial ban is one step closer to being lifted.

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Earlier today, the U.S. Department of Commerce announced they had reached an escrow agreement with ZTE. As you are aware, in order to lift the denial ban put in place in April 2018 (and be authorized to purchase goods and services from US companies), ZTE must pay $1 billion dollar fine and place $400 million into an escrow account.

Commerce announced today an agreement was reached with ZTE. The next step is for ZTE to deposit the $400 million into the escrow account. Upon deposit, the Department of Commerce, Bureau of Industry and Security will lift the denial ban. According to the June 8, 2018 superseding order, ZTE has until September 8, 2018 to deposit the funds – based on today’s news it appears ZTE is on its way to lifting the denial ban.

If you are a supplier or ZTE vendor and have any questions about the denial ban, feel free to contact export compliance attorney, David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Check out my other ZTE posts:

ZTE Open for US Business – sort of and only until August 1, 2018.

ZTE deal is good to go – House bill does not include Senate language “undoing” ZTE deal.

ZTE pays $1 billion fine, $400k into escrow soon.

In-depth details of the ZTE deal.

Senate passes amendment to undo Trump’s ZTE deal.

Deal reached between the US and ZTE

ZTE facing $1.7 billion penalty?

The real reason Trump is working to reverse the 7 year ZTE ban? To help U.S. companies!

CNBC reports the US and ZTE are working on alternatives to the denial order issued against ZTE back in April of this year.

ZTE estimated to lose $3.1 billion due to US sanctions (Bloomberg).

Deal reached to allow ZTE to purchase U.S. hardware and software?