Japan and South Korea trade war tensions rise.

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Japan and South Korea trade war tensions rise.

As previously mentioned on this blog, Japan and South Korea are in a trade dispute arising out of a court case granting South Koreans compensation for forced-labor during Japan’s colonial occupation of South Korea.

In response, Japan placed export regulations on chemicals exported to South Korea that are vital for South Korea’s tech industry. The restrictions on exports to South Korea are to take place in August unless an agreement is reached between the two sides. It appears no deal will be reached as both politicians have seen their approval ratings rise since the disputes.

Trump criticizes India for tariffs on Harley Davidson bikes.

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According to thePrint.in online, President Trump has criticized India several times for their high duties on Harley Davidson motorcycles. As recently as last June, President Trump has told Indian Prime Minister Modi the import duties were unacceptable.

Harley Davidson’s first entered the Indian market in 2007 in exchange for lifting a ban on Indian mango exports to the US (the “Mango” deal). However, in 2018, India incread the duties on “completely knocked down units” of Harley Davidson’s that are shipped to India for assembly. The 13 knocked down units are the lower priced models and are the majority of Harley Davidson motorcycles sold in India.

While Harley Davidson only sells about 2,500 bikes in India per year, President Trump views Harley Davidson and the brand as the “pride of the United States”, which also makes the brand an easy target for foreign governments to irritate the President.

President Trump likely supports Harley Davidson for multiple reasons: (1) the brand is popular among Trump’s voters in the midwest and Southern US, (2) Bikers for Trump is a group of motorcycle riders who also mostly ride Harley Davidson’s and (3) Harley Davidson’s headquarters is in Wisconsin – a Republican state that Trump needs for support in 2020.

Time will tell what products Trump will increase tariffs in retaliation. If you have any questions about duty rates or want to save duties on imports, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Japan claims national security threat the reason for limiting exports of chemicals to South Korea.

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On July 1st, the Japanese government began restricting exports of two chemicals, fluorinated polyimide and hydrogen fluoride; chemicals needed to produce semiconductors and smartphone and television screens. South Korea is dependent on Japan for this supply. Japanese officials claim the chemicals are “controlled items” (goods with civilian and military applications), and have been “inadequately managed” by South Korean companies.

However, South Korean officials believe the real motive for restricting imports of the two checmicals is a political dispute between the two countries and a recent South Korean court ruling that resulted in the seizing of assets of a Japanese company to pay for reparations for Japan’s actions during World War II.

Japanese exporters of the chemicals now need a license for each one with delays taking up to 90 days. In the meantime, South Korean companies are looking for new suppliers even though stockpiles of the checmicals are enough to meet the current demand.

As in most disputes between two nations, the citizens (well, businesses) lose, South Korean companies can’t purchase the chemicals they want and Japanese companies can’t sell the chemicals they don’t need.

Canadian Conservative leader Andrew Scheer calls for more inspections on Chinese imports and potential tariffs.

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According to Canada’s National Observer, Conservative Leader Andrew Scheer has urged Prime Minister Justin Trudeau to step up inspections on all products from China and to consider levying tariffs on imports on Chinese imports.

The request was sent by letter last Friday in which Scheer urged Prime Minister Trudeau to take a harder line on China’s second largest trade partner. China detained two Canadians in December just days after Canada arrested Chinese high-tech executive Meng Wanzhou in Vancouver on a U.S. extradition warrant. Additionally, China has increased inspections that have led to the suspension or obstruction of key Canadian agricultural imports, including pork and canola. Last week, China announced an additional suspension of all imports of Canadian meat products because of claimed concerns over fraudulent inspection reports.

In Scheer’s publicly released letter, he writes: “There is no other way to put this: Canada is being bullied by the Chinese government and you have done nothing to stand up for Canada in response”. Scheer asks Prime Minister Trudeau to increase Canadian inspection of all imports from China and the potential of placing tariffs on some of the $75 billion worth of goods imported from China last year.

American economist warns Taiwan not to take sides in US-China trade war.

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According to Taiwan News online, American economist Tyler Cowen said on Monday (July 8) that Taiwan cannot afford to take sides in the U.S.-China trade war, reported Central News Agency.

The publication Business Today (今周刊) invited Tyler Cowen for a panel discussion in Taiwan in which Cowen argued Taiwan may be a loser in the trade dispute between the US and China if they chooe which of the two biggest economic powers to support.

According to Cowen, Taiwan is in a catch-22 situation, Cowen states: “Taiwan is close to China, has made massive investments, and high-income manpower flows into China. On the other hand, China’s increased military deployments in the South China Sea should be a clear sign that China’s intentions are not friendly”.

According to Taiwan News, Tyler Cowen is an economics professor at George Mason University and serves as general director of George Mason’s Mercatus Center, a university research center that focuses on the market economy.

If you have any questions or would like to learn how to save on duties during the current US/China trade war, contact experienced trade and customs attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US imposes 400% duties on steel imports from Vietnam.

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In early July, the Commerce Deparatement said certain products produced in South Korea and Taiwan were sent to Vietnam for minor processing before being exported to the US. The steel included corrosion-resistant stell and cold-rolled steel. The Commerce department imposed duty rates as high as 456.23% on imports from Vietnam if they were using material from South Korea or Taiwan.

While Vietnam has been benefitting from the increased duties against Chinese goods – Vietnam’s shared border with China helps the supply chain for manufacturers who go south of the border to avoid the 301 China duties.

However, Trump was quoted as saying Vietnam as the ““almost the single-worst abuser of everybody”, a statement viewed as a potential hint of the next target of his sanctions.

Vietnam is not alone in having companies “tranship” goods through Vietnam to avoid paying tariffs. CBP is also investigating six American companies for evading anti-dumping duties who importing carbon steel pipe fittings through Cambodia.

If you have any questions about anti-dumping, or would like to know how to reducing AD/CVD duties or under investigation for transshipment. Contact experienced antidumping attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Vietnamese Furniture makers win in Trump’s trade war.

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A Bloomberg article highlights one of the winners in Trump’s trade war with China – that being Vietnamese furniture manufacturers.

With imports of Chinese furniture subject to a 25% duty in addition to any applicable anti-dumping or countervailing duties, furniture companies in Vietnam are cashing in as the tariff-free alternative to Chinese manufacturing.

The Bloomberg article quotes, the CEO of Xuan Hoa Vietnam Joint Stock Co., a furniture company that has seen a boom in international visitors – including Ikea. Xuan Hoa is a long time Ikea manufacturer (past 17 years) and their ability to produce cheaper than China is only increasing under the trade war.

In addition to not being subject to 301 duties or AD/CVD duties, the Bloomberg article cites labor costs half of what they are in China and lower electricity costs as it is subsidized by the government. Vietnam’s shared border with China also allows for the ease of materials and components.

If you are a furniture importer from China and want to learn how to save on import duties, contact trade and customs attorney by mobile/text at 832-896-6288 or by email at attorney.dave@yahoo.com or dh@gjatradelaw.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.

Will the new US/China trade war truce lead to a trade deal?

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Two big newsworthy events happened over the weekend at the G20 summit. First, Trump said US companies could supply to Huawei (waiting for official guidance at the moment) and second, the US and China agreed to not enact any further tariffs (current proposed Section 301 List 4 duties) in the near future and to start a new round on trade talks.

This may sound like Groundhog Day, and it partially is. Last year at the Argentina G20 summit, Trump and Xi also reached a similar agreement. And the differences that prevented a deal to be reached in Argentina also exist today. Key issues such as intellectual property and China’s 2025 plan are two areas where the two countries still do not reach a consensus.

With an election looming a little over a year away, Trump may be waiting until after next November before moving forward with a final deal – in the meantime, Trump says the US is already benefiting from the tariffs as the US is “taking in a fortune”.

If you have any questions about any of the 232 or 301 duties and how they may impact your business. Contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

US China Truce (for now)?

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Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)

At this week’s G20 meeting, President Donald Trump and China’s Xi Jinping agreed to a temporary truce and restart trade talks. This means the current U.S. tariffs will remain in place, but the trade penalties proposed for Section 301, List 4 will be put on hold pending an outcome of what will be the 12th round of trade talks.

List 4 covers approximately $300 billion in goods from China, and if in place, Lists 1-4 effectively cover every import from China.

However, both sides still differ on one item that may prevent a long term solution – trade secrets.

In response, China has also placed tariffs on $110 billion in US goods, mostly focusing on agricultural imports. Some believe the tariffs against farm products (and Trump supporters) are aimed towards pressuring Trump as he heads into the general election next year.

If you have goods under List 3 and want to file an exclusion, contact David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.