Japan/Korea trade war soon?

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As if 2020 has not had enough bad news – it appears South Korea and Japan are heading towards a trade war stemming from events that happened in WW2. The tense relations between the two nations results from a wartime labor compensation issue stemming from Japan’s forced labor during their colonial occupation of Korea and a focus on Japan’s use of “comfort women” during WW2.

In 2018, a court in South Korea seized assets from Mitsubishi Heavy Industries Limited and Japan’s Nippon Steel and Sumitomo Metal Corporation in order to compensate forced laborers and comfort women during Japanese colonial rule of Korea from 1910-1945. While we think assets include something tangible, in this instance the assets were stock shares from a joint venture between a Japanese and Korean company with a value of approximately $800,000.

In response to the court decision that would seize the assets, Japan made it more difficult for South Korea to import chemicals needed for semiconductor manufacturing. In response, South Korea took Japan off their “white list” nation of countries with favorable trade terms while South Korean citizens also started a boycott of Japanese goods.

A dispute likely won’t be coming to a resolution soon – South Korea claims Japan has never apologized and refuses to compensate the victims where as Japan claims South Koreans were compensated in 1965.

The next deadline is August 4th, when the South Korean court considers the Japanese parties have been served with the notice of damages paperwork and the liquidation process can begin.

President Trump to sign Uyghur Human Rights Policy Act in response to China’s persecution of Muslim Uyghurs.

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According to CBN News, the Trump administration will sign the “Uyghur Human Rights Policy Acts” this upcoming week – legislation that was passed through both houses of the usually contentious Congress.

The passage of the “Uyghur Human Rights Policy Acts” is the first legislation passed by any nation that has addressed Uyghur’s political, economic, social and religious rights and persecution by China’s communist party. The significance of the new act is the ability to impose Magnitsky sanctions against Chinese officials who have been responsible for persecuting religious and ethnic minorities in China.

The Russia and Moldova Jackson–Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012 (Magnitsky Act) authorizes the US government to sanction individuals who perpetrate human rights offenders, freeze their assets, and can ban individuals from entering the US.

Uyghurs are an ethnic minority in China that practice Islam and in recent years (since approximately Spring of 2017), China’s communist regime has been forcing Uyghurs to denounce their religious practices and adopt more non-traditional way of life. According to CBN, more than 3 million Uyghurs are being detained against their will.

New trade war? China advises its citizens to not visit Australia.

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According to the Japan Times website today, China’s Ministry of Culture and Tourism advised China’s citizens not to visit Australia due to racial discrimination and violence against Asians due to COVID-19 pandemic.

However, Australia believes Friday’s travel advisory is in retaliation for Australia advocating an investigation into the origins of the coronavirus pandemic. A claim verified when Chinese Ambassador to Australia – Cheng Jingye told Australian media that the country might face a Chinese boycott of its tourism and exports of wine, beef and other goods if the government pressed for a corona virus inquiry.

This travel advisory is in addition to the 80% tariffs China has placed on the import of Australian barley and a beef ban on Australian beef suppliers due to labeling issues. Australia argues they do not want a trade war and that no evidence supports dumping of Australian barley or errors in beef labeling.

If you have any trade, import, export, or compliance questions – feel free to contact David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

China announces 80% tariffs on Australian barley – the new trade war?

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That escalated quickly! In addition to banning imports of Australian beef, the Chinese government announced on Monday, May 18th, 2020 an 80% tariff on Australian barley exports starting today.

The tariffs are likely in response to Australia’s government demanding an inquiry into the cause of the corona virus. The Chinese President Xi Jinping has claimed China acted “with openness and transparency” in their handling of the outbreak.

Also on Monday, the World Health Organization (WHO) also agreed to launch an independent probe into how they handled the international response to the corona virus. The countries requesting the investigation included African, European and other countries and is looking for a review of the WHO’s response to the corona virus outbreak.

In response to the new tariffs, Australia’s Minister for Trade Simon Birmingham on Monday night denied Australia had subsidized or dumped barley in China. Will be following this news carefully as China accounts for 33% of Australia’s total exports at $135 billion in 2019.

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.

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 may impose 100% tariff on French champagne, cheese and handbags over digital services taxes.

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This past Monday, the Trump administration announced the United States may impose duties of 100% on $2.4 billion in imports from France of items including champagne, handbags, and cheese in response to France’s 3% tax on digital services earned by companies with more than $27 million in French revenue and 750 million euros worldwide.

The US opposition to the tax has bipartisan support, with top Republican and top Democrat Senators Charles Grassley and Ron Wyden claiming “the French digital services tax is unreasonable, protectionist and discriminatory.”

French officials counter by saying the digital tax is not aimed specifically at US technology companies, but rather any digital firm.

The public is able to submit public comments through January 14th on the proposed tariffs and a public hearing is scheduled for January 7th.

If you have any questions how the proposed duties may impact your business, 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 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.

 

Phase 1 of the China trade deal explained.

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Earlier this week, US and Chinese representatives met for the 13th time in ongoing negotiations to reach a trade deal. On Friday, President Trump outlined what has been referred to as “Phase 1”:
1. Suspension of tariff hike set for October 15th that would have increased tariffs from 25% to 30% on $250 billion in Chinese goods.
2. Some intellectual property protections on copyrights, trademarks and piracy (no movement on technology transfers, data flows, cyber security, product standard reviews or the new social credit system.
3. China’s commitment to purchase $50 billion in US agricultural products
The announcement is short on details and more information should be available in 5 weeks and details will be posted as soon as they are available.
If you have any questions how these duties will impact your business, or for any questions on trade with China, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US DOJ warns of increase in Chinese theft of trade secrets.

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According to CNBC, the Justice Department launched the “China Initiative” in November 2018 in response to Chinese national security threats while the Chinese have accused the United States protecting US companies from competition and attempting to hinder China’s technological development.

The Justice Department issued a warning to companies to bolster their defenses against economic espionage, which has seen an 80% increase in cases since 2012. US Deputy Assistant Attorney General Adam Hickey is quoted as saying more “more cases are being opened that implicate trade secret theft”.

Further more, Adam’s states:

“We expect other nations will want to become self-sufficient in critical technologies. That’s what we’d expect of a responsible government,” he said. “The issue isn’t that China has set out to do that. It’s that part of their industrial policy, part of the way they try to accomplish that, is state-sponsored theft or creating an environment that rewards or turns a blind eye to it.”

The DOJ believes part of the continued espionage efforts are part of the “Made in China 2025” strategic plan to reduce China’s dependence on importations of technology in 10 industries including information technology, robots, aviation, bio-pharmaceuticals and railway transportation.

If you have questions on imports or exports from China, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.