What could Apple do to reduce the tariff impact on September 1st?

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If Trump levies a 10% tariff on over $300 billion of goods on September 1st, all of Apple’s products from China would be impacted. What options does Apple have?

  1. Exclusions – Apple can apply for an exclusion of their goods that are covered by the proposed List 4.
  2. Country of origin – Apple’s major contract manufacturer, Hon Hai has additional production ability in Taiwan, India, Thailand and Vietnam and a shift to one of those countries may be possible. Samsung makes their Galaxy phones in Vietnam.
  3. Apple can ask their suppliers for price reductions to make up for the additional 10% duties.

Like Apple, other these options are also available to any company that manufactures in China. If you want to know what your company can do to lessen the impact of the potential duties, or want to know other ways to save money on duties – contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

I want to file a 301 exclusion – what info do I need to provide the USTR?

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As you are aware, the exclusion process for List 3 is now openuntil September. We have received a lot of exclusion requests and I thought I’d share the information the US Trade Representative (USTR) requires in order to review an exclusion request:

1. 10-digit subheading of the HTSUS applicable, use 8/10 digits (if there are different HTSUS 8 and 10 digit codes used, we will need a separate request)

2. Product name

3. Detailed description of the product: (1) physical characteristics (e.g., dimensions, weight, material composition, etc.). (2) Requestors may submit a
range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with
similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.

4. The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any
unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requestors may submit attachments that
help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a
Requestor’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the
product using criteria that cannot be made available for public inspection.

5. Requestors must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data
on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the Requestor purchased, in 2017, 2018,
and the first quarter of 2019.

6. Requestors must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019.

7 For imports sold as final products, Requestors must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product
accounted for.

8. For imports used in the production of final products, Requestors must provide the percentage of the total cost of producing the final product(s) the
Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for. Required
information regarding the Requestor’s purchases and gross sales and revenue is BCI and the information entered will not be publicly viewable.

9. Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources
in the United States and/or in third countries. The Requestor must provide an explanation if the product is not available outside of China or the Requestor
is not sure of the product availability.

10. Whether the Requestor has attempted to source the product from the United States or third countries.

11. Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the
Requestor or other U.S. interests.

12. Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

If you have any questions about the exclusion request process, contact experienced attorney trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com.

Trump: Apple goods from China will be subject to duties.

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According to the AFP, earlier today, President Donald Trump warned he would deny Apple’s “exclusion request” for tariff exemptions on device components imported from China.

Specifically, President Donald Trump wrote on Twitter:

“Apple will not be given Tariff wavers, or relief, for Mac Pro parts that are made in China. Make them in the USA, no Tariffs!”

Trump’s message on Twitter is in response to Apple’s filing of an “exclusion request” with the U.S. trade representative. Apple claims that some parts of the Mac Pro desktop being sold at $6,000 can only be sourced in China and therefore not be subject to 301 duties.

If your imported goods from China are subject to the current “List 3” duties and you would like to file an exemption, contact experienced trade attorney David Hsu at dh@gjatradelaw.com, attorney.dave@yahoo.com or by phone/text at: 832-896-6288.

Apple shifts Mac Pro production to China, then asks to not pay tariffs on imported Mac Pros.

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The Mac Pro was the last Apple product manufactured in the US, and last June, Apple announced they would shift Mac Pro production to China.

On July 18th, Apple filed “exclusion requests” with the US Trade Representative to exclude certain items from the 25% 301 duties on goods imported from China.

The parts include a CPU, heat sink, power supplies, USB charging cables, circuit boards, graphics processing modules, computer enclosure, the Magic Mouse and Magic Trackpad.

To view Apple’s exclusion requests, go here: https://exclusions.ustr.gov/s/PublicDocket and search by “Organization Name” for “Apple”.

If you want to file an exclusion request, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

China’s #2, – Premier Li Keqiang eases trade tensions with the US.

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According to the New York Times, China’s Number 2 official, Premier Li Keqiang speaking at the World Economic Forum in the Chinese port city of Dalian, promised to cut tariffs, loosen restrictions on foreign investments, protect intellectual property rights and allow foreign companies to apply for China’s generous subsidies for research and development.

Speaking during a question and answer session, Li also said that China would allow foreign financial services companies into its market a year earlier than previously promised, and that it would rewrite many rules on foreign investment.

The NYT mentioned the lack of details, and indicated previous vague promises by Chinese officials in the past.

In addition to extending an olive branch to foreign companies, Premier Li’s remarks also sought to calm worries about the relocation of manufacturing overseas as a result of the Section 232 and 301 duties levied against China.

If you have questions how the China duties will impact your business, contact David Hsu by phone/text at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

List 3 Exclusion Process?

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Last October, 10 10 senators sent a letter to the United States Trade Representative (USTR) inquiring why a List 3 exclusion process had not yet been established. As you are aware, an exclusion process allows importers or interested parties of goods subject to the Section 301 duties to petition to have their goods excluded from the tariffs of 10-25%.

Earlier this week, the USTR replied indicating an exclusion process will not start on List 3 unless negotiations fail with China and the tariffs are raised on the $200 billion worth of goods from 10 to 25%. Both China and the US have agreed to a “truce” until March 2, 2019.

Will update as soon as any updates are available. If you have any trade, import, export, trade or compliance attorneys, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com