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.

US China exchange good will measures prior to next trade talks.

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US and China will send mid-level negotiators to meet in a few weeks prior to higher level talks afterwards. In advance of the meetings, both sides have displayed signs of good will – for example, the US rescheduled the proposed October 1st deadline for new tariffs to take effect to October 15th, as October 1st is the 70th anniversary of the founding of the People’s Republic of China (PRC).
China on the other hand, has indicated their importers are looking to increase purchases of American agricultural products such as soybeans, pork and other farm goods.
US Trade Representative Robert Lighthizer has indicated the talks will occur sometime in October. I don’t believe an agreement can be reached – the US is using trade as a leverage against China’s ambitions to be the world leader in robotics, artificial intelligence and high tech industries (2025), along with allegations of steal trade secrets and forcing foreign firms to participate in joint ventures with required tech transfers.
If you have any questions about how the current 232 or 301 duties will 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 and China trade talks to resume in October.

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The office of the US Trade Representative (USTR) confirmed on Thursday that a deputy-level meeting would be held in mid-September to discuss plans for trade talks in October.
This past Sunday, new tariffs on US$125 billion of Chinese imports, including shoes and smartwatches, came into effect after President Trump said he was disappointed in China’s lack of effort to buy US farm goods. In return, China responded with duties on $75 billion of American goods, affecting crude oil exported from the US.
The agreed to talks in October will hopefully resolve the 13-month trade war between the two countries.
If you have any questions how your company may be impacted by the US/China trade war – contact experienced trade attorney David Hsu at by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Japan downgrades South Korea’s trade status.

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This past Wednesday, Japan downgraded South Korea’s preferential trade status – requiring Japanese manufacturers to now apply for approval for technology-related goods to be exported to South Korea. Japan claims the trade status of South Korea was needed over concerns the technology could be used for military purposes. Prior to Wednesday, exports to South Korea required less compliance as a preferential trade partner. South Korea also announced their action to downgrade Japan’s trade status to take effect later this month (September).

As previously posted on this blog, South Korea accuses Japan using trade as retaliation in responses to court decision granting compensation to individuals who were victims of forced labor during Japan’s occupation of Korea. The AP reports leadership from both countries are working on an agreement.

Citizens from both countries have also joined in street protests and boycotting goods from either country.

USTR to open comment period on List 4.

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This past Thursday, the US Trade Representative (USTR) gave formal notice of the plan to raise tariffs on $300 billion of Chinese imports from 10% to 15% starting December 15th. The formal notice starts the opportunity for importers or anyone impacted by the potential tariffs to submit comments. The comments are an opportunity for businesses to tell the White House why the tariffs are good or bad. As in the past, comments have been both supportive and critical of the potential tariffs.
This round of tariffs encompasses goods on “List 4” and includes mostly consumer goods – such as smartphones, computers, and other consumer electronics.
If you want to submit comments regarding any goods on “List 4”, contact experienced trade and customs attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Trump delays List 4 tariffs until December 14th.

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The Trump administration has postponed the levying of 10% tariffs on List 4 goods covering $300 billion in imports from China until December 15th. The initial date of September 1st was postponed after reports of a phone call with Beijing.

A new round of trade talks will be held in September after this month’s talks did not result in a trade deal.

There is still time to lower your import risk, if you would like solutions to lowering the duties you need to pay, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US collected $63 billion in tariffs through June.

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According to the Wall Street Journal, the Treasury department’s tariffs is expected to generate almost $72 billion in tariffs through June of this year. This number will likely go much higher if the “List 4” duties take effect on September 1st. On September 1st, over $300 billion in Chinese goods will be subject to a 10% tariff with a potential to increase to 25%.

Specifically, as of June 30th, the Treasury department has collected $63 billion in tariffs over the past 12 months. In contrast, prior to the trade war, the US only brought in $30 billion dollars.

The WSJ estimates the annual generated amount can be as high as $100 billion by the end of the year once the 10% duties are placed on over $300 billion worth of imported goods from China.

If you have any questions how the current 301 duties or proposed List 4 duties will impact you, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

China currency move believed to be in response to tariff threat.

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According to the Washington Post, China let the exchange rate for the yuan to fall below seven per dollar. A weak Chinese currency has the effect of increasing the country’s exports, hurting foreign competitors.

The WP further quotes People’s Bank of China blaming the decline on “trade protectionism,” a reference to the ongoing trade dispute between the US and China. The remainder of the article lists the various markets world wide and the subsequent decline since China’s announcement.

As previously blogged, China will take other measures in response to the trade war besides imposing their own duties on US imports. China has currently imposed duties covering 110 billion US goods, and can only impose an additional duty on $50 billion before China covers all of the $160 billion in US goods last year.

 

Intel has begun selling to Huawei as US loosens restrictions.

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Since the US eased restrictions on supplying components to Huawei, the largest US chimpaker, Intel, said they have begun selling products to Huawei “within the rules of the law”. Additionally, Intel says they are also requesting an export license to sell “general purpose computing” chips to Huawei that do not pose a national security risk.

As you are aware, the Trump administration raised concerns regarding the use of Huawei technology may contain backdoors that would allow the Chinese government to spy on users, posing a national security risk. As a result, the US Department of Commerce added Huawei to their entity list this past May. Inclusion on the entity list precluded Huawei from buying parts and components from American companies without US government approval (an export license).

However, after the Trump met with Chinese President Xi Jinping at the G20 summit last month, President Trump said that US firms can resume selling equipment to Huawei.

Additionally, earlier in July, Commerce Secretary Wilbur Ross announced an easing of restrictions against the Chinese company in line with Trump’s statements after the G20 summit, stating that the US would issue licenses to US companies looking to sell to Huawei as long as the sales do not pose a threat to national security. An export license would still be required as Huawei has not been removed from the entity list.

If you have any questions whether your company can continue to do business with Huawei, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.