Trump administration bars federal agencies from buying ZTE or Huawei technology.

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Last year, Congress passed the defense spending bill that included a provision barring all federal agencies from purchasing Huawei and ZTE equipment due to concerns Chinese technology contained within those devices may pose a national security concern.
One year later, the new prohibition will take effect August 13th – this prohibition also includes Chinese companies Hytera and Hikvision. Next year, federal conttractors will be subject to this prohibition, although waivers will be available to contractors on a case-by-case basis.
Huawei has challenged the ban in court but no decision has been made.

Trump threatens tariffs on $300 billion of Chinese imports on September 1st.

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

As you are aware, yesterday, President Trump imposed a September 1st deadline for an additional $300 billion in tariffs on Chinese goods if a trade deal is not reached.

The $300 billion covers the remaining items not previously listed in Lists 1, 2 or 3. The List 3 exclusion process is currently underway and Commerce recently published lists of additional exclusion requests that have been granted in Lists 1 and 2.

Here is a summary of what has been reported by various news outlets:

  1. There has been no progress in trade talks with China this week in Shanghai between Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer and their Chinese counterparts.
  2. Trump believes China is moving too slow in working on a deal and set September 1st as a deadline to impose duties on the remaining imports of goods from China.
  3. The new duties if imposed in September will be at 10%. We have seen goods in List 1, 2, 3 have tariffs as high as 25%.
  4. Some news outlets report that China may be stalling to sign a trade deal until after the 2020 election.
  5. September 1st would mark an end to a “truce” between the two countries.
  6. China has threatened to respond with their own retaliatory tariffs if Trump goes through with the September 1st deadline.
  7. Trump claims China has not gone through with their promise to buy more agricultural products from the US in large quantities.
  8. Trump also claims China would curtail the shipments of Fentanyl to the United States, but has not and the shipments continue to harm Americans.
  9. According to reports, Chinese negotiators want Trump to remove the tariffs on $250 billion in Chinese goods before they will purchase US agricultural goods and comply with their other concessions.
  10. Trump believes the US economy is strong as unemployment has hit a 50-year low, a position that will enable the US to outlast China in the event of a prolonged trade war.
  11. Analysts claim further duties will only hurt Americans in increasing the prices of goods.
  12. Shipping companies and importers are trying to get as many shipments into the US prior to the September 1st deadline.

Will post more news as they become available. If you have any questions how the 301 duties will impact your business, contact David Hsu at: dh@gjatradelaw.com, attorney.dave@yahoo.com or by phone/text at 832-896-6288.

Trump saves Huawei.

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

Well, not exactly Huawei, but at least Huawei’s smartphone division. After backtracking on sanctions, Huawei’s shipments for 2019 are estimated to be 260 million units and more. This new forecast even beats the pre entity list placement forecast of 250 million units.

According to the Bloomberg article cited several reasons for increased smartphone sales: (1) inclusion of Google play store apps for future smart phones, and (2) increased Chinese domestic sales of Huawei devices that may result from consumers supporting a domestic company.

Ultimately, Trump’s reversal of the Huawei ban (for devices not a threat to national security) has ultimately saved Huawei and their smartphone sales. Over the past two months, there have been multiple reports of canceled phones and laptops (new Matebook); we can expect to see those new devices in the near future as a direct impact of President Trump’s reversal at the G20 summit.

If you export any goods that may contain Huawei parts or components, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Breaking news – Trump allows US companies to sell to Huawei.

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

In comments at the G20 Summit, Trump was quoted as saying:

“One of the things I will allow, however, is, a lot of people are surprised we send and we sell to Huawei a tremendous amount of product that goes into the various things that they make. And I said that that’s okay, that we will keep selling that product. These are American companies… that make product and that’s very complex, by the way, and highly scientific. And in some cases we’re the ones that do it, we’re the only ones that do it. What we’ve done in Silicon Valley is incredible, actually and nobody has been able to compete with it, and I’ve agreed and pretty easily, I’ve agreed to allow them to continue to sell that product. So American companies will continue and they were having a problem, the companies were not exactly happy that they couldn’t sell because they had nothing to do with whatever it was potentially happening with respect to Huawei, so I did do that.”

Based off Trump’s comments, hardware components from US companies such as Intel and Micron can continue to sell to Huawei.

Will post more official verification as soon as it becomes available.

If you have questions about the Huawei BIS entity ban, contact experienced export compliance attorney David Hsu by phone/text at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Chinese drone manufacturer DJI to shift some production to America.

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– Photo by Mudassir Ali on Pexels.com

Well known Chinese drone manufacturer – DJI will shift some production to the US to counter growing skepticism from the Trump administration. The Trump administration has suspected the flying drones could be used to send surveillance data back to China.

DJI announced they would open a production facility in Cerritos, California to assemble a version of their drone that is popular with federal and other government agencies. Known as the “Government Edition”, the new drones can only save data on the drone itself and not transmit any data, additionally, the information saved on the drone can only be accessed once the drone lands – there is no ability to wirelessly transmit information through the drone.

With a 70 percent market share for all drones in the US, it is no wonder DJI is taking great effort to be on the good side of the Trump administration.

Do you say your goods are “Made in the USA”? That’s great, and if you do, be sure you meet all the requirements to say your goods are “Made in the USA”. Contact country of origin expert David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com for a free no cost or obligation consultation.

Trump Effect – workers in Mexico can now organize labor unions.

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

On May 1st, the Mexican government completed passage of a major labor reform bill allowing workers the right to bargain colelctively with employers through independent labor unions, without fear of retaliation or harassment. Workers in Mexico can now vote freely and elect their union representatives.

Part of the impetus for the passage of labor reform is the new trade deal to replace NAFTA. Then-Mexican President Enrique Pena Nieto promised to overhaul labor laws as part of the new USMCA trade deal. Labor reform in Mexico was supported by the Trump administration as a way to improve working conditions in Mexico, lowering the incentive for US manufacturers to move jobs south of the border.

Ironically, the party of labor unions, the House Democrats have not yet agreed to the passage of the USMCA as they believe the enforcement of the new labor laws doesn’t exist. Even more ironic is Democrat President Clinton supported the passage of NAFTA – an agreement that did not provide for any means for workers in Mexico to collectively bargain or organize labor unions. Since 1994 and then-President Clinton’s passage of NAFTA, the average factory worker in Mexico is just over $2.00 an hour.

If you have any questions how the new USMCA will impact your business, call/text David Hsu at 832.896.6288 or by email at attorney.dave@yahoo.com.

Trump issues order for agencies to buy US made steel, aluminum and cement.

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U.S. President Donald J. Trump. Official portrait from whitehouse.gov

U.S. President Donald J. Trump signed a new executive order late January to further his “Buy America” initiative. The new executive order encourages government agencies to purchase a wider range of US made materials for infrastructure projects such as steel, aluminum and cement.

President Trump’s first “Buy America” executive order was signed in 2017, called the “Buy American, Hire American” executive order.

The executive order also requires the head of each agency to submit a report to President Trump identifying new opportunities to use Buy America rules. The reports are due by May 31st.

Full text of the executive order can be found here.

Trump threatens tariffs on $267 billion in Chinese goods (not a typo).

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President Trump said on Friday (September 8th) he is ready to impose tariffs on $267 billion in goods from China, on top of the current $200+ billion plus in tariffs on goods. This past July, Trump imposed tariffs on $50 billion in Chinese imports in July and then an additional $200 billion in tariffs.

With the threatened $267 billion, Trump will have imposed or threatened to impose a total of over $500 billion in imports from China. To put this amount into perspective, the US imported only $505 billion in Chinese goods in 2017. In short, Trump is threatening tariffs on everything imported from China.

On September 6th, the U.S. Trade Representative finished accepting comments on the List 3 of tariffs that could impact up to $200 billion in Chinese goods.

More updates will be posted as they become available.

If you have any questions about how List 1, 2, 3 and upcoming proposed tariffs will impact your business – or how you can file comments or exclusions, contact experienced trade and customs attorney – David Hsu at 832.896.6288 or by email at attorney.dave@yahoo.com.

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

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Last Thursday, the US House of Representatives (“House”) passed its version of the defense appropriations bill, formally known as the the “John McCain National Defense Authorization Act for Fiscal Year 2019”, or “NDAA” for short.

The House bill passed on a 359-49 vote and authorized $675 billion in defense spending for next year. The final bill does include the Senate language prohibiting ZTE and Huawei from selling goods or services to the Pentagon.

More importantly, the final bill does not include Senate language that would have “undone” ZTE’s deal ($1 billion in fines, US government oversight, $400k in escrow, etc.) Despite bipartisan support in the Senate for amended language that would have prevented a deal with ZTE, the House did the right thing and removed this amendment from the final bill.

News of this final bill probably won’t make it to the news outlets, but this final bill is a win for President Trump and the administration – and will be the first time the US Government has had oversight of a large Chinese company.

With the ZTE deal saved and ZTE now eligible to buy hardware and software from US companies – companies such as Qualcomm, Lumentum, Oclaro, Broadcom, Intel, MACOM, Semtech, and other U.S.-based vendors in the ZTE supply chair are probably breathing a sigh of relief.

Check back for more ZTE news, if you have any questions about ZTE, trade or customs law, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

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

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President Trump via whitehouse.gov

I’ve read almost every ZTE-related article and no article has mentioned what I believe to be the real reason behind President Trump’s efforts to reverse or implement other alternatives to remove ZTE’s 7-year ban on purchasing U.S. hardware and software.

The real reason President Trump is trying to remove the ban is an effort to help US companies. US based companies such as Qualcomm, Intel, Broadcom and Oclaro supply hardware to ZTE. Software companies such as Alphabet supply and provide the Android mobile operating system and updates found on ZTE phones. A 7-year ban means the Google Play Appstore will lose sales on both apps and in-app purchases.

While Trump has faced backlash from Congress, I believe Trump’s efforts are in the interest of helping US companies and improving their stock prices.