Breaking news – Section 301 Statement by US Trade Rep. Robert Lighthizer and list of Chinese goods impacted by $200 billion in tariffs.

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Robert Lighthizer, official portrait, work of the U.S. Federal Government

U.S. Trade Representative (USTR) Robert Lighthizer released a statement today regarding Section 301 of the Trade Act.

The full statement can be read here.

Here’s a summary of the statement:
1. Last Friday, US started imposing tariffs of 25% on $34 billion worth of Chinese imports.
2. Will eventually cover $50 billion in Chinese imports.
3. Tariffs are against products that benefit from China’s industrial policy and forced technology transfer practices.
4. China retaliated with $34 billion in tariffs and threats on $16 billion more.
5. In resopnse to China’s retaliation, President Trump ordered tariffs of 10% on an additional $200 billion in Chinese imports.

Brief history of the 301 tariffs:
1. Last August (2017), President Trump asked USTR to begin the Section 301 process. The basis of the 301 was due to China’s”abusive trading practices with regard to intellectual property and innovation.”
2. USTR conducted investigation, published 200 page report showing: “China has been engaging in industrial policy which has resulted in the transfer and theft of intellectual property and technology to the detriment of our economy and the future of our workers and businesses. ”
3. The USTR also found these “practices are an existential threat to America’s most critical comparative advantage and the future of our economy: our intellectual property and technology.”

To view the Federal Register notice and list of proposed tariffs on $200 billion of Chinese imports, click here.

If you have any questions how these 301 tariffs may impact your business, or if you would like to submit comments to the US Government, please contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

ZTE deal is good to go – House bill does not include Senate language “undoing” ZTE deal.

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Last Thursday, the US House of Representatives (“House”) passed its version of the defense appropriations bill, formally known as the the “John McCain National Defense Authorization Act for Fiscal Year 2019”, or “NDAA” for short.

The House bill passed on a 359-49 vote and authorized $675 billion in defense spending for next year. The final bill does include the Senate language prohibiting ZTE and Huawei from selling goods or services to the Pentagon.

More importantly, the final bill does not include Senate language that would have “undone” ZTE’s deal ($1 billion in fines, US government oversight, $400k in escrow, etc.) Despite bipartisan support in the Senate for amended language that would have prevented a deal with ZTE, the House did the right thing and removed this amendment from the final bill.

News of this final bill probably won’t make it to the news outlets, but this final bill is a win for President Trump and the administration – and will be the first time the US Government has had oversight of a large Chinese company.

With the ZTE deal saved and ZTE now eligible to buy hardware and software from US companies – companies such as Qualcomm, Lumentum, Oclaro, Broadcom, Intel, MACOM, Semtech, and other U.S.-based vendors in the ZTE supply chair are probably breathing a sigh of relief.

Check back for more ZTE news, if you have any questions about ZTE, trade or customs law, contact David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Trump claims Harley Davidson using tariffs as an excuse to close US plant and move to Thailand.

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Back in April 27th of this year, I wrote on my blog post here that I suspected Harley Davidson was using international trade, tariffs and the US withdraw of the TPP as excuses for two unpopular moves by the company: (1) closing a Missouri factory and (2) moving production to Thailand.

As Harley Davidson is a foreign entity in Thailand, it is not easy for Harley Davidson to just decide to open a factory in Thailand overnight, here’s why you can’t just open a factory overnight –

It takes time and planning, sometimes years of planning – corruption and lack of transparency in government and state agencies, high tariffs on imports (ad valorem tariffs from 50-80% according to export.gov), changes in Thailand’s legal frame work increasing rule of law and consumer protection, higher insurance premiums and a lengthy patent registration process (export.gov claims the patent process may take several years). This doesn’t include the time to find the space, building or retrofiting an existing factory, hiring and training a local work force, working out the logistics to get supplies to the assembly line and then all the permitting, registration and other red tape needed.

Today, July 26, 2018, U.S. President Donald Trump accused Harley-Davidson of using trade tensions as an excuse to move production overseas:

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced &amp; unfair trade is, but we will fix it…..</p>&mdash; Donald J. Trump (@realDonaldTrump) <a href=”https://twitter.com/realDonaldTrump/status/1011568906992017408?ref_src=twsrc%5Etfw”>June 26, 2018</a></blockquote>
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Reuters reported that the plan for the Thailand-made motorcycles would be shipped to the EU to avoid any potential tariffs on US goods. It is estimated the tariffs could cost anywhere from $90 to $100 million per year. The Reuters article also mentioned the move would not result in retail or wholesale price increases in the EU.

Check back for more updates as they become available.

Trump threatens tariffs on imports of European cars.

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According to Bloomberg, the Trump administration threatened a tariff of 20% on cars imported from the European Union if the EU does not remove import duties on U.S. goods.

President Trump tweeted:

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.

Not mentioned in the Bloomberg article – but some European manufacturers already make vehicles in the US. For example, Mercedes-Benz builds their GLE SUV, GLS SUV, the C-Class and the GLE Coupe in Alabama. BMW builds their X3, X4, X5, X6, and X7 models in South Carolina. Mexico is also host to manufacturing for Audi’s Q5 and VW’s Tiguan and Jetta models.

The EU has already imposed tariffs on $3.3 billion in U.S. goods and would impose further tariffs in the event the U.S. goes through with the import car tariffs.

Further updates will be posted as they become available.

Trump administration considering new tariffs on imported vehicles.

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Reuters reports the Trump administration may consider imposing new tariffs on imported vehicles based under Section 232 of the Trade Expansion Act of 1962.

A little bit of background – a section 232 investigation is conducted under the authority of the Trade Expansion Act of 1962, as amended and the purpose of a 232 investigation is to determine the effect of imports on the national security. Investigations may be initiated based on an application from an interested party, a request from the head of any department or agency, or may be self-initiated by the Secretary of Commerce.

Reuters reports the administration is currently considering tariffs of up to 25 percent for imported vehicles. As this was just announced, the plan is still not yet implemented and will receive much feedback from interest groups, foreign trading partners, domestic dealers of importer cars and anyone else involved in the import car business.

Check back for the latest news. If you have any questions about the current steel and aluminum tariffs initiated under section 232, contact experienced trade attorney – David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Does President Trump want the US to become the 12th TPP member?

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According to a Daily Caller website article published today, President Trump asked Ambassador Robert Lighthizer and National Economic Council director Larry Kudlow to look into rejoining the trans-pacific partnership. The Daily Caller cites Senators Ben Sasse and Pat Roberts as the source of the news.

Sasse noted that Trump “deputized” Kudlow to “go get it done” and explore the possibility of rejoining TPP as the 12th party now that the other 11 nations have struck a deal. “It might be easier for us to join now, as opposed to long process,” he elaborated.

No other details are mentioned in the article but updates will be posted they are available.