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.

China tariff cuts coming soon?

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Last Thursday, the US Trade Representative’s office said they were seeking public comments on lifting additional Section 301 duties (tariffs) on Chinese imports for goods that could help the US fight the current coronavirus pandemic.

The public comments will allow anyone to submit comments if they believe modifications to the Section 301 tariffs may be necessary. Since the corona virus crisis started, the USTR granted exclusions for medical products from China that included medical masks, examination gloves and antiseptic wipes.

Even with the exclusions, the 20-month long duration of the Section 301 China duties still covers over $370 billion in Chinese imports.

A trade deal came into effect on February 15th known as “Phase 1”, but no new trade deals will be announced until after the corona virus crisis ends.

If you have would like to submit comments on what other goods should be excluded – contact experienced customs and trade law attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

ITC publishes final determination of no material injury by imports of Fabricated Structural Steel from China, Canada and Mexico.

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About 30 minutes ago, the Federal Register published the final determination decision by the International Trade Commission finding no material injury by imports of fabricated structural steel from Canada, China and Mexico. The Final Determination can be viewed here: https://www.govinfo.gov/content/pkg/FR-2020-03-20/pdf/2020-05845.pdf

The petitioners have 30 days to file an appeal in court. If no appeal is filed, importers who paid duties may be eligible for a refund after the deadline to appeal expires.

If you want to learn more about getting a refund for your imports of fabricated structural steel from China, Canada or Mexico, contact experienced trade attorney David Hsu by phone/text at 832-896-6288, or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US investigating Chinese telecom giant ZTE for alleged bribery.

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While the news is dominated by the corona virus coverage, the US is investigating whether ZTE paid bribes to foreign officials to gain advantage in ZTE’s operations. ZTE is one of the largest Chinese telecommunications companies and are believed to be closely related to the Chinese Communist Party.

The bribes include allegations of bribery by ZTE in over 12 countries, including but not limited to Algeria, Liberia, Kenya and Zimbabwe.

These new legal issues come right after ZTE plead guilty 3 years ago for violating U.S. sanctions against Iran and North Korea. In 2017, ZTE plead guilty to violating U.S. sanctions, and resulted in ZTE paying a civil and criminal penalty and forfeiture of assets – a settlement costing ZTE over $1.19 billion dollars. ZTE’s probation ended

ZTE’s US headquarters are based in Richardson Texas with the company’s headquarters located in Shenzhen, Guangdong, China.

15,000 invasive mitten crabs seized since September 2019.

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Image of seized mitten crabs, source: CBP.gov

According to a US Customs and Border Protection media release, Customs agents in Cincinnati have seized 3,700 mitten crabs from China and Hong Kong in the past 4 months.

Over the past 4 months, 3,700 mitten crabs have been found in 51 shipments and were set to be delivered to New York. The shipments were labeled as “tools and various clothing articles”. Nationwide, Customs has seized over 15,000 mitten crabs since September 2019. The mitten crabs are considered a delicacy in Asia.

Here in the US, mitten crabs are an invasive species because they are omnivores and eat anything, impacting the food supply to aquatic plants, fish, algae, other crabs and all living organisms in the water. Mitten crabs are also especially invasive as they are found in fresh water when young and salty water in adult life. Mitten crabs also tend to burrow furthering land erosion and weakening levees and flood control measures.

If you have received a letter from Customs regarding the wrongful importation of invasive species or if you have questions about the exportation of foods that may be subject to Fish and Wildlife regulations, contact experienced Customs and seizure attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US Government agencies end use of Chinese-made drones.

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Last June, I posted about China-based drone manufacturer DJI shifting some drone production to America in order to manufacture US-spec drones to assuage fears China-made DJI drones could transmit sensitive US government data back to China.

Despite efforts by DJI, the US government agency, specifically the US Department of the Interior, has decided to ground their Chinese-made drone program. As a result, around 800 drones were grounded last October while a review evaluated the risks of using Chinese-made drones. This past week, government agencies decided to permanently cancel the drone program. 

The drones were used by scientific teams to map terrain, survey land, monitor earthquakes and also used by rescue teams – such as the rescue of a victim of the volcanic explosion in Hawaii in 2018. Drones used to fight wild fires and rescue people are still allowed to operate.

Besides government agencies, the US Army has also banned troops from using DJI-made drones due to cyber-security concerns.

Government agencies claim drone use is cheaper and less risky – without drones, manned aircraft would have to be used.

Treasury Department no longer designates China a currency manipulator.

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Two days prior to signing Phase One of the US/China trade deal, the Treasury Department announced they were removing China’s designation as a currency manipulator.

The Trump administration designated China as a currency manipulator in August 2019 when Trump accused China of intentionally weakening their currency to make their goods cheaper for sale overseas in light of the then-new tariffs.

Since August, the Treasury Department claims China has made promises to stop devaluation and to promote transparency and accountability.

While the August 2019 label as a currency manipulator received bipartisan agreement, this new move has received criticism from Democrat Senators who argue the label of “currency manipulator” should not be used as a bargaining tool in the ongoing US/China trade war.

As the signing date of Phase One approaches, I expect the Trump administration to release further details in multiple parts.

Feel free to contact David Hsu directly by phone/text at 832-896-6288 to discuss your China, trade and import/export related issues or send an email to attorney.dave@yahoo.com, dh@gjatradelaw.com

US China set to sign a trade deal on Wednesday.

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On January 15th, the US and China are expected to sign phase one of the new trade deal between the two nations. The deal is 86 pages long and the full content has not yet been released.

According to Barron’s, citing a former Trump administration trade negotiator, the deal will cover 5 areas:

1.  Commitment from China to stop forced technology transfers.

2. Process for China to create judicial proceedings to enforce trade law secrets, patent extensions for US pharmaceuticals.

3. No further currency manipulation

4. Commitment by China to buy more agricultural products.

5. Use science-based risk assessment when determining whether to ban US imports.

Will post more details as soon as they are confirmed. If you have any questions about the trade deal or general import and export questions, contact David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US China Trade Deal as of 12/13/2019.

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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, the Trump administration has confirmed a trade deal with China has been reached.

Phase one of the trade deal was just announced:

-List 1 remains at 25%

-List 2 remains at 25%

-List 3 remains at 25%

-List 4b is gone (4b was initially scheduled to take effect December 15th, and included consumer electronics such as cell phones, laptops, computers, etc.).

-“Most” (not all) of List 4a is going to drop to 7.5%.

We will monitor the Federal Register for what specifically is being reduced. If you have any further questions, contact experienced trade attorney David Hsu for immediate help by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, 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.