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.

Trump hints at delay of additional duties originally set for March 1st.

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According to CNBC, President Trump says he will delay additional China tariffs originally scheduled to start on March 1. In a series of posts on Twitter, President Trump indicated a delay for the imposition of “List 3” of duties under Section 301 because of “substantial progress” in trade talks currently underway between the US and China.

While the tweets hint at a delay, there was no hint of a revised deadline to reach an agreement with China. Time will tell whether the US and China can reach an agreement on the key issues of intellectual property protection and forced technology transfer.

In other news, a late March meeting between President Trump and Chinese President Xi Jinping will likely occur at Trump’s Mar-a-Lago golf club in Palm Beach, Florida.

More updates will be posted as they became available.

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

Tesla applies for tariff exclusion.

According to Reuters, Tesla has applied for a tariff exemption for the Chinese made computer brain found in the Model 3.

While not mentioned in the Reuters article, the computer component is currently included under List 2 of the Section 301 duties that came into effect in August of last year.

All goods under List 2 have a duty of 25%.

Tesla’s filing did not specify the Chinese manufacturer and included language mentioning China as the only source of this product that could meet the required specifications and volume.

It will be interesting to see whether this exclusion request is approved as very few of the tens of thousands have been approved. I’ll definitely updated this if and when it is approved.

The time to apply for a tariff exclusion under List 2 has passed and there are currently no instructions for a tariff exclusion request for goods covered under List 3.

Feel free to contact me if you have any questions how these 301 tariffs will impact you and your interests. My cell is 832.896.6288 or email me 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.

China drafts new technology transfer law – will this be enough to alleviate US concerns?

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According to a just published South China Morning Post article – new legislation has been introduced in China that banns forced technology transfers. The draft foreign investment law was revealed on Sunday and includes a clause on protection of intellectual property.

According to the SCMP article, the newest version of the law states that “forced technology transfer through administrative measures is prohibited, and technology cooperation should be “based on voluntarily agreed terms and business practices”.

A similar law was written in 2015 but was not enacted at that time. However, given the US/China trade war and one of the main concerns on forced technology transfer – 2019 may see an enactment of the new law. Will update this article as more news peoples available.

If you have any questions regarding, trade, import, export, compliance or FCPA issues and how they may impact your business, contact experienced compliance attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.