Hong Kong could lose special status and trade benefits.

Last year, the US passed a law that requires Hong Kong to retain independence to qualify for the continued favorable trading terms with the US. I mentioned this in my blog post on June 15th, 2019 here.

The bill requires the US Secretary of State to certify each year that Hong Kong remains autonomous from China. If Hong Kong does not pass the certification of independence from China, then Hong Kong would lose trade privileges with the US (goods from Hong Kong will now be subject to duties on goods from China).

Fast forward almost a year later – where in late May China’s central government passed a national security law to apply to Hong Kong (as Hong Kong has not been able to pass such a law since they were handed back to China in 1997). The new security law would ban secession, subversion of state power, terrorism, foreign intervention and allows mainland China’s state security agencies to operate in the city.

After passage of the security law, Secretary of State Mike Pompeo told Congress that Hong Kong was no longer independent from China – signaling a potential move towards Hong Kong not passing certification.

If Hong Kong loses it’s special status a big impact would be on tariffs on goods from Hong Kong would now apply. This would impact over $66 billion in trade according to 2018 trade numbers. In 2018, Hong Kong was America’s third-largest market for wine, 4th largest for been and seventh largest for agricultural products.

If you have any questions how your imports or exports to and from Hong Kong may be impacted, contact David Hsu 24/7 by phone/text to 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US pork exports to China increase while US faces meat shortage.

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As part of Phase 1 of the US/China trade deal, China agreed to purchase more US goods and one such product has been pork to replace 1/3 of China’s hog population that was decimated in mid-2018 due to African swine fever. Besides pork, China also imported more US beef and poultry products after lifting a prior ban on US poultry. However, one downside of the Phase 1 trade deal has been exasperated by the meat processing plant closing as a result of COVID-19 infections. This has created the issue of too much meat being exported and not enough fresh meat being stocked in US grocery stores.

The U.S. meat shortage and the Phase 1 goals of increasing exports to China seem to be opposing forces, raising the question of whether sales and shipments will or should be limited. Some restrictions would not be surprising given U.S. President Donald Trump’s more combative tone in his recent comments on trade with China.

March 2020 saw the second highest volume of pork to China with the US exporting 95,892 tons, with a combined total of 280,507 tons of pork and pork product exported so far in 2020 (an increase of 300% over the first three months of 2019) with chicken feet being the largest exported US poultry item to China. The combined value of all pork, beef and poultry exports to China for January to March of 2020 totaled $781 million.

If you have any questions about the China trade deal or the 301 duties, contact David Hsu anytime by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

Corona virus’ January and February impact on trade.

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According to the Financial Times, global trade dropped 2.6 percent in February compared to the same time in 2019. This February drop also follows a 1.5 percent drop from January 2020. Specifically, China had a 7.3 percent fall in imports in January 2020 due to parts of the country shutting down in response to the Corona virus. For February, China had another 3.2 percent drop for the month.

The US did not show any impact in trade volume while the EU trade volume dropped 1.5 percent for February 2020. Will be interesting to see March and April numbers when reported.

General importing/exporting questions? Contact experienced trade attorney David Hsu by phone/email at: attorney.dave@yahoo.com, dh@gjatradelaw.com.

USMCA Signing Day for the US.

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Official portrait of President Donald J. Trump, Friday, October 6, 2017. (Official White House photo by Shealah Craighead)

Later today, President Trump will sign the house and senate approved USMCA bill. The replacement for the 25-year old trade agreement NAFTA won’t immediately take effect as Canada remains the only country that has not yet approved the USMCA (expected to do so in a few weeks). Give me a call/text if you have questions how the USMCA will impact you or your business – 832-896-6288 or send me an 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.

U.S. House passes USMCA, next stop the Senate.

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As you are aware, the U.S. House of Representatives passed an updated version of the USMCA earlier this week. The passage by the House includes revisions to an agreement initially agreed to by the US, Mexico and Canada in September 2018.

The next step for the USMCA is the Senate, where it is not expected to be put to a vote until 2020.

What are some of the changes in the USMCA versus NAFTA?

  • If autos are to qualify for no tariffs, then 75% of the components must be manufactured in Canada, Mexico or the United States (currently at 62.5%).
  • 30% of the work on the vehicle must be performed by individuals making $16 or more per hour, with a 40% requirement in 2023.
  • The new agreement allows works in Mexico to unionize.
  • The definition of steel and aluminum for Mexico in regards to the automotive rules of origin includes “melted and poured” in North America.
  • USMCA will be subject to mandatory review every 6 years, if all parties agree, then there is a 16 year period for review, with subsequent reviews every 16 years.

If you have any further questions how your business may be impacted by the USMCA if and when it is passed next year, contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com or dh@gjatradelaw.com.

China leading the way for new trade deal with ASEAN nations.

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This week, the 10 members of the Association of Southeast Asian Nations (ASEAN) are meeting in Bangkok, Thailand and one main focus will be the creation of a free-trade pact that will cover 50% of the world’s population and 40% of the world’s commerce. The ASEAN nations hope to enact the Regional Comprehensive Economic Partnership (RCEP), a trade deal that covers a territory from India to New Zealand.
In negotiation for the past few years, the current US China trade war is pushing the effort to create the RCEP. Will post any updates as available.
Do you have any trade or customs law questions, contact your trade and customs attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US to end Cameroon’s preferential trade status on January 1, 2020.

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Earlier this week, President Trump announced to Congress his decision to end Cameroon’s preferential trade status starting 2020 due to alleged human rights violations  – citing “extrajudicial killings, arbitrary and unlawful detention and torture”.

As of January 1, 2020, Cameroon will be removed from the list of countries benefiting under the African Grown and Opportunity Act of 2000 that encompasses 39 African nations.

Part of the move to end Cameroon’s trade status came from reports by Human Rights Watch (HRW) reports of torture and abuse that included overcrowded conditions, torture and delayed trials.

Overall, Cameroon is the US’s 128th largest trade partner with an estimated $413 million worth of goods exchanged last year.

If you believe you will be impacted by this, contact experienced trade attorney David Hsu to explore your options for exporting and importing from Cameroon after January 1st. Phone/text David at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

US ends preferential trade for Thai exports.

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Earlier this week, the Office of the United States Trade Representative announced Friday it was suspending $1.3 billion in trade preferences for Thailand under the Generalized System of Preferences (GSP) due to Thailand’s failure to protect worker rights.

The worker rights issues have been an issue for over the years and complaints about working conditions have particularly focused on the fishing industry in Thailand.

The loss of GSP for Thai exports are effective next April and Thailand will likely try to negotiate the issue with the US prior to April of 2020.

If you have any questions how the loss of GSP for exports from Thailand will impact your business, contact experienced trade attorney David Hsu 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.