ITC preliminary determination on aluminum wire and cable from China.

close up photo of gray metal pipes

Photo by SHOCKPhoto by Szoka Sebastian on Pexels.com

According to Bloomberg Bureau of National Affairs, Inc., the International Trade Commission (ITC) preliminarily ruled that aluminum wire and cable from China receive government subsidies such as tax breaks, loans and grants. The lower cost of production to these goods from China are “dumped” to the US thereby hurting US manufacturers.

A preliminary determination is one step towards the implementation of anti-dumping and countervailing duties. Countervailing duties are to counteract any subsidies that may be given to foreign manufacturers.

Two US companies – Encore Wire and Southwire Co. petitioned the ITC to assess duties on goods for China because (1) the margins of wire and cable from China are up to 63.47 percent and (2) Chinese producers receive government subsidies, tax breaks, loans and grants. These two factors allow Chinese companies to have a competitive advantage against U.S. manufacturers.

According to the article, the US imported about 157.2 million worth of wire and cable from China in 2017 alone.

Besides the just passed preliminary stage, the next state is a “final determination” phase that determines whether the imported steel and

The U.S. will only impose anti-dumping or countervailing duties if Commerce makes a final determination that the imports were sold in the U.S. at less than fair value or unfairly subsidized, and the ITC makes a final determination that the imports seriously hurt or threaten U.S. industry.

Check back for more news as it becomes available. If you have any anti dumping or countervailing duty questions, please do not hesitate to call me at 832-896-6288 or by email at dhsu@givensjohnston.

CBP seizes wall charges bearing counterfeit “UL” markings.

UL

By Underwriters Laboratories (Underwriters Laboratories) [Public domain], via Wikimedia Commons

A U. S. Customs and Border Protection media release today reported that CBP officers at the Port of New York/Newark seized wall chargers with counterfeit UL markings.

What is UL?
Underwriters Laboratory (UL) is a worldwide safety consulting and certification company based in Illinois. UL will test products and issue a UL mark. The UL mark means that someone from UL has tested a representative sample of a product and such product meets defined requirements based on UL’s published and nationally recognized safety standards.

Back to the seized wall chargers –
The seizure occurred back in late September when CBP officers inspection a shipment of imported merchandise for possible Intellectual Property Rights violations. Import Specialists from the CBP’s Electronics Center of Excellence and Expertise (eCEE) determined that 150,000 wall chargers had counterfeit UL markings.

The total MSRP of the wall chargers, if genuine is estimated to be $2.7 million.

My thoughts?
Customs places liability for counterfeit goods on the Importer of Record. It is important for the IOR to verify with the shipper that goods do not contain any counterfeit markings and meet all other requirements before importation to the US. This is especially true since the IR bears all the risk and loss from seizures for IPR violations.

If you or anyone you know has a customs seizure or received a penalty for IPR violations, contact experienced customs and trade attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Kuehne + Nagel report: global trade grew by 8.1% in October.

aerial view of cargo ship

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According to freight forwarder and supply chain solution provider – Kuehne + Nagel, world trade in the first half of 2018 showed an increase in global trade by 8.1% over last year.

Also according to the report, emergency markets also saw a year over year increase while advanced economies saw a 1.4% decrease from 2017.

Latin America growth grew by 3.1% while Europe saw a decline from last year’s 5.7% figure.

South Korea, India, China, Canada and Australia’s foreign trade grew as the US, UK, France and Japan fell.

Full report and more information about Kuehne + Nagel can be found here.

Highlights from Chinese President Xi Jinping’s speech at the International Import Expo.

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As reported by CNN, Chinese President Xi Jinping opened the China International Import Expo in Shanghai with a speech on Monday.

Here’s a summary of the opening remarks and some observations made by CNN:

-The International Import Expo is to highlight China as a destination for foreign goods
-No senior US government officials attended the event
-President Xi Jinping said protectionism should not be a part of international trade
-Over 3,600 companies from over 150 countries participated
-President Xi and President Trump will meet later this month at the G20 summit in Argentina
-President Xi Jinping promised to open the Chinese economy further to international investment and protect foreign businesses already operating in China

If you have any questions regarding export compliance of goods sent to China, contact experienced compliance attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

 

More invasive mitten crabs seized.

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Screen shot of seized mitten crabs – source: cbp.gov

For some reason, CBP likes to post their invasive mitten crab seizures. According to the CBP website – last Wednesday, October 31st, CBP officers found 108 Chinese mitten crabs in a package labeled as a dress.

Mitten crabs are a delicacy in Asia and typically eaten.

The mitten crabs were seized and turned over to the New York State Department of Environmental Conservation (DEC). The article does not say what happened to the mitten crabs.

If you have received a notice of seizure or penalty notice from Customs, contact experienced trade attorney David Hsu at 832-896-6288 or by email at: dhsu@givensjohnston.com.

CBP seizes 900 pounds of invasive mitten crabs.

mitten crab

Screen grab of a Chinese mitten crab, source: CBP.gov website

In mid-October, U.S. Customs and Border Protection officers seized nearly 900 pounds of the invasive Chinese mitten crabs. For some reason CBP frequently publicizes their mitten crab seizures and this is the second they have posted about mitten crab seizures (there have been a total of 3 interceptions in Chicago in October).

The mitten crabs are considered a delicacy food, but cause damage to their non-native habits, with the mitten crabs even earning recognition as one of “100 of the World’s Worst Invasive Alien Species”.

According to CBP, agriculture specialists seize more than 352 pests and 4,638 quarantine materials on any given day in Fiscal Year 2017.

If you have had a customs seizure or received a seizure notice, penalty or fine, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Trans-Pacific Partnership will come into force December 2018

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When the terms of the Trans-Pacific Partnership (TPP) was agreed to in March 2018, the largest free-trade agreement in Asia would become effective upon ratification by six out of the 11 participating countries.

On Tuesday October 30th, Australia became the sixth country to ratify the pact meaning tariff cuts will take place as early as December, almost 2 years after President Trump withdrew the US from talks. Brunei, Chile, Malaysia, Peru and Vietnam have yet to ratify the deal.

It is estimated the new TPP trade deal will remove tariffs on an estimated 95% of goods traded among the 11 member countries and a combined GDP of $10 trillion.

If you have any questions how the new TPP deal may impact your business, feel free to contact experienced trade attorney David Hsu at any time, 832.896.6288 or by email at dhsu@givensjohnston.com.

Customs seizes counterfeit Mercedez parts valued over $1.8 million.

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U.S. Customs and Border Protection (CBP) seized suspected counterfeit Mercedes Benz auto parts in Philadelphia shipped from China New Jersey. If the parts were authentic, the value of the counterfeit goods retailed at approximately $1,764,126 in value.

The shipment from Yangshan, China was labeled as “other parts and accessories of motor vehicles”. The trademarked Mercedes logo and origin of the shipment raised CBP’s suspicion of the authenticity of the goods.

Without going into detail, the CBP media release says CBP has their own inspection methods and use computer databases to find counterfeit goods that may be imported to the US.

If you had your shipment seized for suspected counterfeit of goods – contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

 

Honda mulls moving Fit production from Mexico to Japan.

Fit

3rd generation Honda Fit/Jazz. Image by EurovisionNim via Wikipedia

According to a Reuters article, Honda Motor Company is mulling a shift of their U.S. bound Fit Honda production from Mexico to Japan citing two reasons – increased sales of SUV’s and the new USMCA (Trump’s NAFTA replacement trade deal).

According to unnamed sources, the increased USMCA requirement for North American content for duty-free market access from a minimum of 62.5% to 75% is one primary reason. The other reason is US consumer demand for SUV’s instead of compact cars and sedans. Shifting Fit production would allow Honda to manufacture additional SUV’s instead.

A final decision likely will not be made until Honda launches the new Fit model in a few years.

The NAFTA (USMCA) loyalty oath?

green and gray evergreen cargo ship

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As has been widely reported, the new NAFTA agreement (USMCA) contains what has been branded a “loyalty oath” among the US, Canada and Mexico.

What is this “loyalty oath”?
In short, the oath says that in the event any USMCA member enters into a free trade agreement (FTA) with a non-market country, the other two remaining countries can leave the agreement and form their own bilateral trade pact.

Why is this clause in the USMCA?
This clause is likely an effort by the US Administration to isolate China economically since neither Canada or Mexico would want to leave the USMCA. This clause is also aimed at limiting the imports from China to Mexico/Canada for shipment into the US duty free.

Is a “loyalty oath” found in other trade agreements?
Currently, no, however this inclusion in the USMCA may be an indication of what will occur in future trade agreements to further isolate China from their trading partners.

Is the “loyalty oath” set in stone?
Right now, no, the disclaimer on the current USMCA text states: “Subject to Legal Review for Accuracy, Clarity, and Consistency Subject to Language Authentication“. Only upon ratification by all countries can we know for sure whether this is in the agreement.

What is a market or non-market economy?
This loyalty oath against non-market economies is likely aimed at China while not specifically named in the agreement. Beijing has asked for recognition as a “market economy” within the World Trade Organization (WTO) since their accession agreement expired in December 2016. If China is branded a “market economy”, this would limit trade remedies such as anti-dumping/countervailing duties to be used against Chinese imports.

What are the non-market economies around the world?
According to the European Union, besides China, the other non-market economies include Vietnam, Kazakhstan, Albania, Armenia, Azerbaijan, Belarus, Georgia, the Democratic People’s Republic of Korea, Kyrgyzstan, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan.

Where can I read the full text of the “loyalty oath”
I could not find any news sources that cited the USMCA section.

The exact text of the oath is copied below:

4. Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).

The official PDF on the US Trade Representative website can be accessed here: (last accessed October 9, 2018).

https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/32%20Exceptions%20and%20General%20Provisions.pdf

See Article 32.10 (4)

If you have any questions about NAFTA or the USMCA and how this may impact your business, call experienced trade attorney, David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.