China bans imports of recyclables.

assorted plastic bottles

Photo by mali maeder on Pexels.com

Since China’s entrance into the World Trade Organization in 2001, China has been accepting paper and plastic recycling from around the world – partly due to the cheap labor required to process recyclables. It was estimated that China imported approximately 40 million metric tons of recyclable products every year.

However, the increase in pollution in China has led to a ban in 2018 of foreign recyclables. Now that China no longer accepts America’s trash, some cities and municipalities are scaling back or altogether stopping their recycling programs. Experts estimate that China’s ban will lead to an additional 111 metric tons of garbage by the year 2030.

FDA OKs Import of Genetically Engineered Salmon.

close up cooking cuisine delicious

Photo by Oscar Mikols on Pexels.com

As reported from WebMD, I know, not exactly the authoritative source on import law. However, I checked and they are correct. On March 8th, the FDA issued a press announcement “deactiviting” an import alert from 2016. Full link to the press announcement can be found here.

Import alerts are bulletins that notify U.S. Customs and Border Protection (CBP) of potentially dangerous foods and drugs that are prohibited from entering the US.

The 2016 import alert on genetically engineered salmon became active until the FDA finalized labeling guidelines to inform consumers the product they were consuming was genetically engineered. At that time in 2016, Congress passed a law directing the U.S. Department of Agriculture (USDA) to create a labeling standard for bioengineered food. As the USDA issued their food labeling standards in December of 2018, the FDA determined they did not have the labeling authority and as such, there is no need for the import alert.

Ironically, genetically engineered salmon is now safe for import to the US but kratom is not.

Charlotte Pipe and Foundry wins case against Chinese cast iron pipe producers.

close up photo of gray metal pipes

Photo by SHOCKPhoto by Szoka Sebastian on Pexels.com

Last week, the International Trade Commission (ITC) voted unanimously in favor of Charlotte Pipe and Foundry in their anti-dumping duty (AD) and countervailing duty (CVD) petition against imports of cast iron soil pipe from the People’s Republic of China.

A vote in favor of Charlotte Pipe and Foundry means the U.S. Department of Commerce determined that Chinese producers or exporters undersold the subsidized cast iron soil pipe in the US. AD/CVD duties are to level the playing field and cast iron soil pipe imported into the US from China will include duties ranging 251% to 345%. These additional duties go info effect immediately.

If you are a Chinese exporter or want to know how these new duties impact your business – regardless of whether you import or export, give David Hsu a call at 832-896-6288 or email at attorney.dave@yahoo.com.

CNBC says US China trade war increases the amount of counterfeits – true or false?

silver iphone x with airpods

Photo by Plush Design Studio on Pexels.com

CNBC reports that the US China trade war could lead to an increase in counterfeit goods for 3 reasons:

(1) Flooding of products where CBP cannot catch all fakes, especially through shipments of e-packets which weigh 4 pounds or less. The article says the port at JFK receives 120,000 e-packets a day.

(2) Counterfeiters using 3D printing to create “super fakes” that are very similar to the legitimate product.

(3) Counterfeiters hijacking well known brands on e-commerce sites by filing a document with the trademark office of an email address change. Once the email address change is approved, they go to Amazon to have them recognize their email as the legitimate source and take down the legitimate product.

*****

Here’s my thoughts on this:

1. E-Packet shipments have already been overwhelming CBP for the past 2 years or longer. A 2017 CBP report already mentioned the influx in e-packet delivery as causing more counterfeit goods to slip through.

2. The trade war and increase in these small shipments are not related. The rise in e-packet delivery is due to websites such as alibaba, dhgate, wish and all the other e-commerce platforms that allow US consumers to buy direct from Chinese manufacturers.

3. There is some confusion with buyers in the US who cite Customs Directive No. 2310-011A. This directive allows individuals to bring in (1) one counterfeit article, (2) for personal use, (3) not for sale and (4) it is declared. Some people confuse the directive as allowing shipments of counterfeit goods to be delivered to someone in the US. However, the directive says that the counterfeit good/gray market good must “accompany” you and therefore it cannot be sent.

4. I have to disagree with the article about the use of 3-D technology to create counterfeit goods. Most counterfeit items from China are from the same factory that produces the legitimate product. Sometimes the companies change vendors, leaving the previous vendor with the same tooling, product specifications and know-how to create the same product as the legitimate product (althought lacking the license to do so).

5. There isn’t a need for 3-D printing of counterfeit goods. The fake Otterbox is probably manufactured by the previous OEM manufacturer in which Otterbox sourced their products.

6. Item 3 about Amazon – the CNBC article actually says there has never been a confirmed example of this happening. The main reason is because Amazon will always email the previous email address to verify a request for a change of email was actually filed. The article says an attorney has had 15-16 instances of this happening but there has been no actual success by a counterfeiter.

I don’t see a correlation between the trade war and increase in counterfeit goods. There will always be a demand for counterfeit goods, and any country will have an incentive to supply such demand – trade war or not.

If you received a letter from customs seizing your merchandise because they believe the goods are counterfeit – contact experienced seizure attorney David Hsu at 832-896-6288 or by email: dh@gjatradelaw.com or David’s catch-all email: attorney.dave@yahoo.com.

4 US Companies falsely claimed their goods were “Made in the USA”, $0 in fines paid.

flag of america

Photo by Sharefaith on Pexels.com

According to the New York Times – four companies violated Federal Law by engaging in “unfair or deceptive acts” and false claims that their goods were “Made in the USA”.

The companies and violations include –
(1) Hockey puck manufacturer falsely claims their pucks were made in the US.
(2) California mattress maker falsely claimed there mattresses were “designed and assembled in the U.S.A.”
(3) California-based manufacturer of tactical gear and other merchandise falsely claimed their products were Made in the USA or American made.

Despite the false claims, the Federal Trade Commission (F.T.C.) found all four companies violated federal law, but did not punish the firms. No fines were issued and neither company was required to admit wrongdoing or notify customers of their false marketing.

Democrat lawmakers urged the President to get more tough on manufacturers who falsely label goods as made in America. In response, FTC officials indicated the threat of future penalties was an adequate deterrent as companies face a $40,000 penalty per violation if making any further false claims.

If you have any questions whether your goods qualify as “Made in the USA” or are under FTC investigation, contact experienced trade and customs attorney, David Hsu by cell/text: 832.896.6288 or by email at: attorney.dave@yahoo.com / dh@gjatradelaw.com.

Bi-Partisan bill introduced to block 25% tariff on imported cars.

mercedes benz parked in a row

Photo by Pixabay on Pexels.com

According to the Detroit News, U.S. Representative, Fred Upton (R) introduced legislation that would stop President Trump from imposing 25% tariffs on cars imported to the US under the premise of threats to America’s national security.

The legislation includes bi-partisan support and would require the International Trade Commission to first conduct a “comprehensive study on the economic importance of automotive manufacturing in America”.

Another argument is that the Trump administration is over stating the claim that cars and auto parts are a threat to national security of the US.

Since Trump proposed the tariffs in May of 2018, the proposed tariffs may be imposed as early as early May if the new legislation passes and becomes law.

More news will be posted as they become available.

China introduces new legislation to placate US IP concerns.

great wall of china

Photo by Johannes Plenio on Pexels.com

According to Bloomberg – China’s legislative body has passed new legislation to replace three main laws that impact non-Chinese companies doing business in China:(1) Law of Joint Ventures with Chinese and Foreign Investment, the (2) Law on Foreign-Capital Enterprises and the (3) Law on Chinese-Foreign Contractual Joint Ventures.

To summarize, the new legislation includes: (1) promise of equal support to foreign and domestic firms, (2) equal treatment for license applications, (3) foreign companies can participate in setting industry standards and in government procurement, (4) right of foreign companies to appeal non-security related decisions and (5) a complaints mechanism for foreign companies.

The law was passed on March 15th and will take effect on January 1, 2020. Whether this will impact the current trade negotiations is still yet to be seen.

Passenger van or cargo van? That is the question (well, for Ford at least).

red ford van

Photo by Pixabay on Pexels.com

A current case in federal court is attempting to address when or if a passenger van is actually a cargo van.

The case involves Ford Motor Company and their imports of passenger vans that removed a row of seats and sold the vehicles as cargo vans. Cargo vans were levied a duty of 25%, whereas their passenger van counterparts were only taxes 2.5%. Specifically, Ford imported “passenger vans” into the US from Turkey. After they cleared customs, the second row of seats were removed, windows blocked and holes on the floorboard for the seats were covered.

In 2017, the Court of International Trade ruled in Ford’s favor, but the government has appealed and the U.S. Court of Appeals for the Federal Circuit heard oral arguments yesterday (Monday 11, 2019). Many are watching the ruling as this may impact what strategies companies implement when “tariff engineering” imports to avoid higher duty amounts.

Tariff engineering and finding alternate classifications under the Harmonized Tariff Schedule of the US (HTSUS) are common ways importers try to lower their duty amounts.

The Ford argument is the goods should be classified as they are imported and subsequent altering does not matter. However, the government claims Ford’s wording of the vehicle is “for the transport of persons” instead of goods, ie is a cargo van.

Will update as soon as a decision is made.

If you are interested in how your company can “tariff engineer” goods or want to discuss alternative classifications for your goods, contact experienced trade attorney David Hsu at 832-896-6288 or email David’s catchall email: attorney.dave@yahoo.com (will be sent to David’s dh@gjatradelaw.com) email.

Huawei sues US Government, argues government ban on Huawei equipment is unconstitutional.

black huawei android smartphone

Photo by Alex Fu on Pexels.com

China’s Huawei sued the United States government on Wednesday in the United States District Court in Plano, Tex., arguing the 2019 National Defense Authorization Act is unconstitutional because it bans government agencies from contracting with Huawei or companies that use the company’s equipment.

Specifically, Huawei claims Congress violated constitutional principles on the separation of powers and also the bill of attainder clause, by enacting legislation that specifies a person or entity for punishment without trial.

Huawei’s claim is not new, in the past, Russian based Kaspersky Lab filed a similar suit in 2017 after the Department of Homeland Security banned Kaspersky products from Federal agencies. A judge dismissed the lawsuits as there was a legitimate desire to protect American networks. If the U.S. Government can likewise prove a similar claim in the instant suit, Huawei may likely face the same result of Kapersky.

The US has argued that Huawei equipment poses a risk because it is used by Chinese authorities to spy on the communications. As such, many US wireless carriers have avoided using Huawei equipment.

More information will be posted as it becomes available.

Chinese exports drop 20% from last year.

green and gray evergreen cargo ship

Photo by David Dibert on Pexels.com

According to the General Administration of Customs in China, Chinese exports fell 20.7% from this time a year ago. Causes for the slow down may be related to a slow down in global demand for Chinese goods and the Chinese New Year holiday in February.

January and February 2019 customs data showed exports down 4.6% compared to 2018 data, indicating a slowing global economy and not the trade war is the cause.

The country’s exports to the U.S. fell 26.2% last month, while imports from the U.S. dropped 28.6%, leading to a bilateral trade surplus of $14.72 billion, a two-year low.

Check back for more trade law news.