Potential changes to the Foreign Direct Product Rule may hinder Huawei supply chain.

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The Trump administration has agreed to changes to the Foreign Direct Product Rule, which subjects some foreign-made goods based on U.S. technology or software to comply with U.S. regulations.  The proposed rule change requires foreign companies that use U.S. chip making equipment to obtain a license before they can supply certain semiconductor chips to Huawei.

The proposed rule change is to limit the number of foreign suppliers who continue to supply chips to Huawei. The new rule will greatly impact Huawei as most chip manufacturers use equipment produc Multiple articles on this subject cite the Taiwan-based “Taiwan Semiconductor Manufacturing Company” (TSMC). TSMC is Taiwan’s largest semiconductor manufacturer with over 15 fabs located throughout Taiwan.

If you have any questions whether you are subject to export controls or if you want to know how you are impacted, contact experienced export controls attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Mexico and US agree to close border except for trade and workers.

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According to the Wall Street Journal, the U.S. and Mexico have reached an agreement on closing border traffic between the two nations except to allow for trade and workers and essential traffic. The

Essential traffic includes for medical purposes, attend educational institutions and emergency response workers.

President Trump cited the CDC’s order on need to slow the spread of the Corona virus and to ensure there are enough health-care resources for US citizens. This closure comes a day after Canada and the US agreed to also close their border.

Besides traveling to Mexico or Canada, the State Department on Thursday issued a new travel alert asking Americans to go travel abroad and to return home unless planning to live abroad.

Japan-US Trade Pact in effect starting January 1, 2020.

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Mt. Fuji in the background, source: Jane Chang

The Japan-U.S. trade agreement started in April 2019, and starting January 1st, comes into effect, resulting in an immediate cut in tariffs on American farm products and a variety of Japanese industrial goods. Unfortunately, the trade agreement does not include passenger cars and auto parts. In addition to a trade agreement, the US and Japan reached an agreement on digital trade. As the US pulled out of the Trans-Pacific Partnership, this trade agreement was crucial for continued US/Japan trade.

Some terms of the trade deal include a reduction in import duty of US beef from 38.5% to 26.6%, with the ultimate duty rate of 9% in 2033. Other duties on cheese, wine, pork will eventually reach zero. In return, US duties on Japanese air conditioner parts and fuel cells were also removed as part of the deal.

While this current trade deal does not address import duties on cars and parts from Japan, second round talks with Washington (set for April 2020) may result in a trade deal. But the United States maintains import duties on cars and auto parts from Japan, despite strong calls for their abolition by the Japanese side.

We have been keeping up with this new trade deal, if you are wondering how it may impact your business, give us a call or text at 832-896-6288 or send us an email to David Hsu at attorney.dave@yahoo.com or work official email: dh@gjatradelaw.com.

U.S. House passes USMCA, next stop the Senate.

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As you are aware, the U.S. House of Representatives passed an updated version of the USMCA earlier this week. The passage by the House includes revisions to an agreement initially agreed to by the US, Mexico and Canada in September 2018.

The next step for the USMCA is the Senate, where it is not expected to be put to a vote until 2020.

What are some of the changes in the USMCA versus NAFTA?

  • If autos are to qualify for no tariffs, then 75% of the components must be manufactured in Canada, Mexico or the United States (currently at 62.5%).
  • 30% of the work on the vehicle must be performed by individuals making $16 or more per hour, with a 40% requirement in 2023.
  • The new agreement allows works in Mexico to unionize.
  • The definition of steel and aluminum for Mexico in regards to the automotive rules of origin includes “melted and poured” in North America.
  • USMCA will be subject to mandatory review every 6 years, if all parties agree, then there is a 16 year period for review, with subsequent reviews every 16 years.

If you have any further questions how your business may be impacted by the USMCA if and when it is passed next year, contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com or dh@gjatradelaw.com.

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.

 

Russia trying to legalise blood diamonds from the CAR.

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According to the Independent, Moscow claims the international ban is not working and seeks to end an international embargo on diamonds exported from the Central African Republic (CAR) since 2013. At the moment, the CAR is the only country in the world subject to a ban on “blood diamonds”.

The main reason Moscow wants to end the embargo on CAR diamonds is because 90% of the CAR’s diamonds are exported through the black market.

Blood diamonds refers to diamonds mined in a a war zone, and then sold to finance war activity.

Next year, Russia will chair the Kimberley Process, a UN program designed to stop diamond profits flowing to armed militias or used to fund war. Estimates put the Kimberley Process as high as 99.8% successful in stopping the global production of blood diamonds.

If you have any questions about the Kimberley Process and how it will effect your imports of diamonds to the US, contact experienced trade law attorney 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 leading the way for new trade deal with ASEAN nations.

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This week, the 10 members of the Association of Southeast Asian Nations (ASEAN) are meeting in Bangkok, Thailand and one main focus will be the creation of a free-trade pact that will cover 50% of the world’s population and 40% of the world’s commerce. The ASEAN nations hope to enact the Regional Comprehensive Economic Partnership (RCEP), a trade deal that covers a territory from India to New Zealand.
In negotiation for the past few years, the current US China trade war is pushing the effort to create the RCEP. Will post any updates as available.
Do you have any trade or customs law questions, contact your trade and customs attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US to end Cameroon’s preferential trade status on January 1, 2020.

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Earlier this week, President Trump announced to Congress his decision to end Cameroon’s preferential trade status starting 2020 due to alleged human rights violations  – citing “extrajudicial killings, arbitrary and unlawful detention and torture”.

As of January 1, 2020, Cameroon will be removed from the list of countries benefiting under the African Grown and Opportunity Act of 2000 that encompasses 39 African nations.

Part of the move to end Cameroon’s trade status came from reports by Human Rights Watch (HRW) reports of torture and abuse that included overcrowded conditions, torture and delayed trials.

Overall, Cameroon is the US’s 128th largest trade partner with an estimated $413 million worth of goods exchanged last year.

If you believe you will be impacted by this, contact experienced trade attorney David Hsu to explore your options for exporting and importing from Cameroon after January 1st. Phone/text David at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US and Japan reach trade deal.

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Last week, President Trump and his counterpart Prime Minister Abe of Japan reached a trade deal to cut tariffs and increase trade between the two nations.

Part of the deal includes Japan agreeing to reduce or cancel tariffs on American agricultural exports such as beef, corn, pork and fruit – with the US agreeing to reduce tariffs on bicycles, flowers, tea and other industrial products.

At the same time, the agreement prohibits future tariffs on streaming videos, music and video games.

If you have any questions about how the new trade deal with Japan will impact your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.