China introduces new legislation to placate US IP concerns.

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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.

US Kitchen cabinet companies petition for anti-dumping duties against Chinese cabinet producers.

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The American Kitchen Cabinet Alliance (AKCA) filed a petition with the International Trade Commission to impose antidumping duties and tariffs on imports of cabinets from Chinese manufacturers.

The AKCA claims the $10 billion cabinet industry is being harmed by imports of cabinets from Chinese manufacturers. The AKCA claims U.S. cabinet manufacturers have seen poor financial performance despite a 12.5% increase in the number of housing units completed in the U.S. The AKCA blames cheap imports from China for their financial decline.

The petition to the ITC by AKCA claims the kitchen cabinets from China are also sold at a below normal value and the AKCA is requesting an ADD rate of 175.5% to 259%.

If you are an importer or manufacturer of kitchen cabinets and ahve questions how the investigation on kitchen cabinets may impact you, contact attorney David Hsu at attorney.dave@yahoo.com or by text/call at 832.896.6288.

US Trade Commission reverses decision, finds the US tire market IS being harmed by truck and bus imports from China.

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Summary of what happened:
On January 30th, the US International Trade Commission (USITC) reversed their earlier decision, finding the US tire market is being harmed by truck and bus imports from China. In short – bus and truck imports from China will now be subject to tariffs. A tariff rate and timeline for imposition of duties was not reported by the USITC.

The USITC released a 62-page determination in response to an order of the U.S. Court of International Trade. Back in November 2018, the USITC remanded the ITC’s decision therefore requiring the ITC to re-evaluate their case.

What caused the reversal?
The five-members of the ITC had changed membership in 2017 when commissioner Scott Kieff left 3 years before the end of his term. President Trump later nominated and the Senate confirmed former President Barack Obama’s nominee to fill the commission – Jason Kearnes.

Jason Kearnes turned out to be the swing vote in the most recent reversal of the ITC decision on bus and truck tires.

Very brief history:
In January 2016, the US Steelworkers filed a complaint that tire imports from China was hurting US industry. After investigating, the ITC voted in February 2017 to NOT impose tariffs. This was a surprise because every other tire investigation led to imposition of duties.The US Steelworkers then appealed the decision to the Court of International Trade and in November 2018, the USITC was forced to re-evaluate their decision. Ultimately in their re-evaluation, the ITC found: “In sum, we find that the significant volume of subject imports, at prices that undersold the domestic like product and depressed domestic prices, adversely impacted the domestic industry. We consequently determine that the domestic industry is materially injured by reason of subject imports.”

Please contact our offices if you have questions on how the most recent ITC decision will effect your company’s imports of bus and truck tries from China. You can call David Hsu at 832-896-6288 at anytime or email attorney.dave@yahoo.com.

 

 

 

 

 

 

US/China trade talks amid new charges against Huawei.

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Earlier this week, Chinese Vice Premier Liu He and his trade team arrived in the US to begin negotiations with US Trade Representative Robert Lighthizer. At about the same time of Vice Premier Liu He’s arrival, the US Department of Justice announced charges against Huawei for violations of US sanctions against Iran and among other things, theft of US intellectual property from T-Mobile.

Negotiations are in progress to reach a deal that could prevent an additional 15% tariff (total 25%) on $200 billion worth of goods from China before the March 1st deadline.

Since the truce, China has increased their purchases of American exports, such as soy beans and have also taken steps to crackdown on intellectual property theft. However, the US government is also requesting China open its market and limit government direction for state-owned enterprises (SOE). A change to Beijing’s economic support of certain industries is likely something that will not change.

Check back for the latest news as it becomes available. If you have any export compliance questions or have concerns about compliance with US sanctions, contact trade attorney, David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

US/China Meeting Cancelled?

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According to CNBC, officials with the U.S. trade representative’s office were supposed to meet with their Chinese counterparts this week to try and resolve some trade differences before the March 1st deadline – but the meeting was cancelled.

An unnamed source claimed the trade planning meeting was cancelled as both sides continue to disagree over the enforcement of intellectual property rules.

As you are aware, one of the US goals with China is to ensure adequate IP protections for US companies operating in China. More specifically, US companies doing business in China are expected to turn over IP to a China joint venture as a condition to doing business in China. The US claims this has resulted in the involuntary transfer of IP that ultimately hurts the US company.

While an unnamed source said a meeting was cancelled, the White House economic advisor, Larry Kudlow claimed there was cancellation and a meeting set for next week is still on schedule.

 

List 3 Exclusion Process?

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Last October, 10 10 senators sent a letter to the United States Trade Representative (USTR) inquiring why a List 3 exclusion process had not yet been established. As you are aware, an exclusion process allows importers or interested parties of goods subject to the Section 301 duties to petition to have their goods excluded from the tariffs of 10-25%.

Earlier this week, the USTR replied indicating an exclusion process will not start on List 3 unless negotiations fail with China and the tariffs are raised on the $200 billion worth of goods from 10 to 25%. Both China and the US have agreed to a “truce” until March 2, 2019.

Will update as soon as any updates are available. If you have any trade, import, export, trade or compliance attorneys, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com

Midlevel US-China trade talks end – higher-level talks next?

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According to the New York Times, the midlevel US trade negotiators and their Chinese counterparts concluded trade talks today (Wednesday, January 10th).

No new concerns were mentioned in the NYT article. The US is still concerned about China’s purchase of US agricultural, energy and manufacturing products; forced technology transfer; intellectual property protection and concerns regarding China’s 2025 initiative.

The next step is to report the results of their talks to President Trump. As you are aware, the imposition of List 3 tariff increases to 25% (from the current 10%) occurs on March 1st (a 90-day extension announced during the “truce” at the G-20 summit in December 2018).

If you have any questions on how the Section 232 or Section 301 duties on Chinese imports impact your business, contact experienced trade and customs attorney David Hsu at attorney.dave@yahoo.com or by phone/cell/text: 832-896-6288.

Key 2019 Trade Deadlines.

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Happy new year everyone! Hope your new year is off to a great start.

2018 was a busy year for trade policy and 2019 will likely continue that trend. Here’s some important dates for trade in this new year:

1/1/2019 – the updated US trade agreement with South Korea signed in September 2018 will enter into force.

1/7/2019 – during this week, a US delegation will travel to Beijing for trade talks with Chinese officials. This will be the first face to face meeting since President Trump met with President Xi Jinping at the G20 summit on December 1st.

1/7/2019 – while a delegation goes to Beijing, the EU Trade Commissioner will meet with USTR Robert Lighthizer on other trade negotiations with the EU.

1/10/2019 – this is the deadline for submission of comments by US businesses regarding restrictions on high-tech American exports such as microprocessors and robotics

1/21/2019 – the US and Japan will likely enter into formal talks for a trade agreement.

2/17/2019 – deadline for the U.S. Department of Commerce to publish their report on the justification of tariffs on foreign cars. Once a report is submitted, President Trump has 3 months (May 18th) to make a decision on tariffs for foreign cars.

3/1/2019 – end of the 90-day truce started on December 1st. If no trade agreement is reached, $200 billion of Chinese goods will see increased tariffs from 10% to 25%.

4/2019 – deadline for the U.S. Department of Commerce to publish a national-secuirty report on the impact of uranium imports.

1st half of 2019 – congress will vote on the U.S.-Mexico-Canada Agreement to replace NAFTA.

Check back for more updates as they become available. If you have any questions how these upcoming events will impact your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

DOJ’s ‘China Initiative’ to investigate and prosecute Chinese companies for FCPA violations.

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84th US Attorney General – Jeff Sessions. Source: justice.gov

As released on the justice.gov website on November 1st, then acting Attorney General Jeff Sessions announced the “China Initiative” fact sheet on the Department of Justice (DOJ) website.

The purpose of the China Initiative is in response to several Trump administration reports that showed concern regarding China’s trade practices and “various acts, polices and practices of Chinese industrial policy uses in seeking to acquire the intellectual property and technologies of the world and to capture the emerging high-technology industries that will drive future growth”.

The release also explains in detail the National Security Division (NSD): “The National Security Division (NSD) is responsible for countering nation state threats to the country’s critical infrastructure and private sector. In addition to identifying and prosecuting those engaged in trade secret theft, hacking and economic espionage, the initiative will increase efforts to protect our critical infrastructure against external threats including foreign direct investment, supply chain threats and the foreign agents seeking to influence the American public and policymakers without proper registration.”

According to the release, the goals of the China Initiative include:

  1. — Identify priority trade secret theft cases, ensure that investigations are adequately resourced; and work to bring them to fruition in a timely manner and according to the facts and applicable law;
  2. — Develop an enforcement strategy concerning non-traditional collectors (e.g., researchers in labs, universities, and the defense industrial base) that are being coopted into transferring technology contrary to U.S. interests;
  3. — Educate colleges and universities about potential threats to academic freedom and open discourse from influence efforts on campus;
  4. — Apply the Foreign Agents Registration Act to unregistered agents seeking to advance China’s political agenda, bringing enforcement actions when appropriate;
  5. —Equip the nation’s U.S. Attorneys with intelligence and materials they can use to raise awareness of these threats within their Districts and support their outreach efforts;
  6. — Implement the Foreign Investment Risk Review Modernization Act (FIRMA) for DOJ (including by working with Treasury to develop regulations under the statute and prepare for increased workflow);
  7. — Identify opportunities to better address supply chain threats, especially ones impacting the telecommunications sector, prior to the transition to 5G networks;
  8. — Identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses;
  9. —Increase efforts to improve Chinese responses to requests under the Mutual Legal Assistance Agreement (MLAA) with the United States; and
  10. — Evaluate whether additional legislative and administrative authorities are required to protect our national assets from foreign economic aggression.

If you have any concerns about whether your Chinese company will have issues or be subject to scrutiny under the new DOJ “China Initiative”, call experienced FCPA attorney David Hsu at 832-896-6288 or email at attorney.dave@yahoo.com.