China’s industrial profits fall in June, sparking fears of slowdown.

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According to CNBC, profits earned by China’s industrial firms fell 3.1% in June from a year earlier, according to the China’s National Bureau of Statistics.

The decrease in industrial profits is likely due to the US/China trade war and the increase in tariffs on Chinese imports. CNBC also states that economic growth in the second quarter slowed to a near 30-year low.

With the US and China set to meet on July 30th for the first time since May, both sides may be looking for an agreement to end the almost year-long trade war.

US exports of cherries to China collapses due to trade war.

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US imports of cherries to China was zero in the year 2000, growing to over $200 million in 2017. However, the current US China trade war and the retaliatory tariffs implemented by China have caused the US exports of Cherries to China to fall to about $200,000 for the year.

In retaliation for the Section 301 duties placed on Chinese imports, China in turn levied tariffs on US goods – for example, a 50% duty on US cherries. As a result, the US only shipped 187 tonnes in May 2019, versus 337 tonnes in May 2018 and 1,505 tonnes in May 2017. In fact, US cherry growers sometimes exported more cherries to China than to Canada.

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

Givens and Johnston, PLLC at Breakbulk Americas 2018.

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Earlier this week, Givens and Johnston, PLLC attorneys – James Garland Hurst and David Hsu staffed the G&J booth at Breakbulk Americas 2018.

James and David were on hand to answer questions related to wood packaging materials and cost-effective solutions to deal with a “wood packaging material” notice from Customs. As you are aware, Customs vigorously inspects wood packaging material shipments entering the US for presence of invasive pests that damage the US ecosystem.

James and David also answered questions regarding ftz’s, bonded warehouses, import and export, compliance matters, Section 232 and 301 duties and the whole range related trade matters.

See you at Breakbulk Americas 2019! In the meantime, feel free to contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com for all your import, export and trade matters.

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Vinyl manufacturers and importers at odds over upcoming tariffs on Chinese vinyl imports.

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Two US vinyl flooring manufacturers testified in support of the 25% tariffs at an August 21st meeting in Washington with the United States Trade Representative.

According to testimony from one of the leaders of one of the vinyl floor manufacturers, 55 to 70% of the vinyl flooring is from Asia and China alone exported $1.7 billion of vinyl flooring into the US.

On the other hand, two importers of vinyl flooring and tile argued the higher prices would hurt consumers and not change the use of Chinese industrial policies like forced technology transfer and the “Made in China 2025 program”. Specifically, the vinyl flooring importers argued duties would raise home prices, impacting lower and middle income Americans the most. In other words, duties on vinyl flooring hurt low and middle class Americans while having no effect on China’s trade practices.

If you are interested in filing comments or an exclusion to any of the upcoming duties, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

Current US Tariff Action Deadlines

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I receive many questions about the deadlines for all the various tariff actions, I thought I’d post all the upcoming deadlines for your convenience.

If you have any questions regarding any 301 or 232 duties or are interested in filing of comments or an exclusion, or need assistance filing a response to comments, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

August 20-23 – Public hearing in DC for List 3

August 23, 2018 – 25% duty effective on List 2

September 6, 2018 – deadline to submit written comments for List 3

September 6, 2018 – deadline to submit post-hearing rebuttal comments

October 9, 2018 – deadline for product-specific exclusions for List 1

14 days after request for exclusion posted on docket – deadline for responses to requests for product-specific exclusion.

7 days after the close of response period – deadline for responses filed during the 14-day response period.

To Be Announced – 10% or 25% duty on List 3

USTR finalizes “List 2” of Section 301 duties on Chinese goods – tariffs begin on August 23rd.

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The Office of the United States Trade Representative (USTR) released a bulletin today finalizing “List 2” of the tariffs of Chinese products known as “Section 301” duties.

List 2 goods will be subject to an additional 25% tariff on goods from China starting August 23rd. Out of the 284 proposed tariff lines, only 5 tariff lines were removed by the USTR.

List 2 covers approximately $16 billion worth of imports from China. The Section 301 duties are the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property.

List 1 went into effect on July 6th and covered about $34 billion of imports from China.

There is no word on when List 3 will be finalized but based on 1 and 2, I believe sometime in December 2018.

If you are importing a good subject to the 301 duties, contact experienced trade attorney, David Hsu for a free legal consultation on what our firm can do for you: attorney.dave@yahoo.com or 832.896.6288.

GM applies for tariff exemption on their Buick Envision manufactured in China and subject to a 25% duty.

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According to Reuters, General Motors (GM) is seeking to apply for a tariff exclusion on their Chinese-made Buick Envision. As the Buick Envision is made in China, imports of the vehicle to the US would be subject to a 25% tariff. According to the same article, sales of the Buick Envision total 19% of Buick brand sales in 2017.

According to GM authority, the automaker has currently sold 16,814 Envisions so far in 2018.

The tariff exclusions are also known as the “Section 301” tariff exclusions. Reuters cites the GM’s argument in the filing: “to invest in our U.S. manufacturing facilities and to develop the next generation of automotive technology in the United States” and that “assembly in our home market is not an option” due to low US sales numbers.

Besides applying for a Section 301 exclusion, GM shipped in a six-month supply of Envisions at the current 2.5% tariffs.

Will followup and update if/when the exclusion has been approved.

If your company would like to file a Section 232 or Section 301 exclusion, contact experienced trade attorney, David Hsu at 832-896-6288 or by email at: attorney.dave@yahoo.com.

US ports first to be impacted if/when China tariffs become effective.

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CNBC on July 28th indicated US ports as the frontline in the trade war with China. Citing interviews with port managers, the CNBC article claims imposition of more duties (estimated to total over $200 billion worth of Chinese goods) will result in cancelled shipments, less container traffic and lost jobs.

One port director from Long Beach believes further duties will impact the port, the state and the nation as a whole. The LA/LB port handled $173 billion in Chinese imports last year and account for 1/3 of all the shipped goods from China to the US.

Last year, $505 billion in goods arrived from China last year with about $130 billion in US goods to China. This difference in the goods arriving versus leaving is part of the $375 billion trade deficit President Trump vowed to lower while on the campaign trail in 2016.

There are currently in place tariffs on $34 billion in Chinese goods that resulted in China also imposing an equal $34 billion in US goods to the mainland. If List 2 and 3 become effective, the tariffs would cover around $200 billion more in Chinese goods.

The port director in Long Beach claimed the import business supports a million jobs throughout Southern California and slowdowns in China trade could result in layoffs, leading to loss of local and state tax revenues generated by business impacted by a slow down in trade.

If you have any questions how the tariff lists will impact your business, or for a free consultation on whether your goods are on one of the three lists, contact experienced trade attorney, David Hsu at 832.896.6288 or by email at: attorney.dave@yahoo.com.

What should my company do regarding the Section 232 and Section 301 tariffs?

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We are fielding a lot of calls from importers, vendors, manufacturers, brokers and freight forwarders about what to do now that the Section 232 and Section 301 tariffs are in place.

We suggest:

  1. Review the list of products to determine your company’s exposure to Section 301 and Section 232 tariffs. The First Section 301 list can be found here.
  2. If there is a product on the second list of the Section 301 tariffs, you should participate in the comment process. The second list can be found here.
  3. If you are importing a product covered under Section 301 or Section 232, look into other alternatives for sourcing.
  4. This may be a good time to review your imported and exported goods and the classification used.
  5. Notify your customers, suppliers, vendors, buyers of potential price impacts of these new tariffs.
  6. Review pending purchase orders and pending shipments with companies in China, Canada, Mexico and the European Union.

If you have any questions about Section 232 or Section 301, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com. We also assist in filing exclusion requests and submission of comments, call or email now for immediate assistance.