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 dhsu@givensjohnston.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 dhsu@givensjohnston.com.

India postpones retaliatory tariffs on US goods until January 31st.

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According to the Economic Times, India has postponed imposition of duties worth $235 million on American goods until January 31, 2019.

The retaliatory tariffs were in response to the Trump administration’s tariffs on imported steel and aluminum. The start date of India’s retaliatory tariffs was set for tomorrow (December 17th).

The new tariffs include a 120% tariff on US chickpeas, 70% tariff on chana and 40% on lentils.

The US and India are currently negotiating a settlement on various issues – India would like greater access to the US market for their agriculture, automobile, parts and engineering while the US seeks greater access for farm and medical devices.

Check back for the latest news as they become available. If you have any questions how your company’s exports to India may be impacted or if you have questions on how to save on steel and aluminum duties from India – contact experienced trade attorney David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

China set to resume importing oil from the US.

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According to the Financial Tribune, the trading arm of China’s Sinopec and largest buyer of US crude oil – Unipec, will resume purchase of US crude oil very soon at a significant volume.

Unipec has not imported US crude oil in August or September of this year. However, since the “truce” in the US and China trade war in early December where both sides agreed to suspend raising tariffs for an additional 90 days, Chinese refiners have started to look to the US for crude oil.

China suspends 25% tariff increase on US vehicles and auto parts.

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According to the Associated Press this morning, China announced a 90-day suspension of increased tariffs on $126 billion of US cars, trucks and auto parts.

The suspension on Friday was likely a response to President Trump’s December 1st decision to suspend tariff hikes that were set to begin January 1st. These initial China tariffs of 25% were in response to Trump’s 25% tariff on $50 billion of Chinese goods.

The US and China are still working on a solution to solving the trade dispute but no face to face negotiations have been set. Check back for more details as they are available.

China purchases additional 500,000 tons of U.S. soybeans.

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According to CNBC – following the meeting between President Trump and President Jinping Xi earlier this month, Chinese state-owned companies purchased 500,000 tons of U.S. soybeans valued at $180 million.

While the purchase does help, CNBC reports that American farmers have only sold 8.2 million metric tons of soybeans to China this year, down from 21.4 million metric tons during the same period last year.

In addition to U.S. soybean farmers being impacted by the trade war, China is also facing a shortage of soybean supplies and it was reported that in September, Chinese officials considered cutting the soy ration for hogs.

Check back for more news as they become available.

Summary of information we have about the Huawei CFO Arrest.

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Below is a summary in bullet point of news we know about the arrest of Huawei’s CFO as reported by multiple sources:

  1. Who is Meng Wangzhou?
    1. 46 year-old global CFO of Huawei
    2. Daughter of Huawei founder.
    3. She faces extradition to the US.
    4. She also goes by Cathy or Sabrina
  2. When was the arrest?
    1. December 1, 2018
    2. The arrest warrant was issued on August 22nd.
  3. Where did they arrest the CFO?
    1. The arrest took place in Vancouver’s airport as she traveled from Hong Kong to Mexico.
  4. Why did they arrest the CFO?
    1. The arrest stems from 2013 statements made by Meng Wanzhou. In 2013, she told financial institutions Huawei had no connection to a Hong-Kong based company called Skycom.
  5. Why is Skycom Tech Co. Ltd. under investigation by the US?
    1. Skycom is suspected of selling Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator.
    2. There is an embargo in place and selling HP equipment to Iran is in violation of US sanctions.
    3. Meng’s lawyer claims Huawei already divested itself from Skycom and left the Skycom board.
    4. US authorities also believe Huawei operated Skycom as an “unofficial subsidiary” to conduct business in Iran.
    5. Meng previously served on the board of Skycom from February 2008- April 2009 according to Skycom filings with Hong Kong’s Companies Registry.
    6. Several past Skycom directors may also have connections to Huawei.
  6. Tell me more about the court case?
    1. Eastern District of New York.
    2. US authorities will like allege Meng played a role in fraud by telling banks there was no link between Huawei and Skycom.
  7.  Why arrest the CFO in Canada?
    1. The US does not have an extradition treaty with China
    2. Canadian authorities consider her a flight risk because of her wealth.
  8.  What is China’s response?
    1. The Chinese government has demanded Meng’s immediate release.
    2. China has asked Ottawa and Washington to clarify their reasons for the detention.
    3. The arrest has sparked anger on Chinese social media with users calling for boycott of US goods.
  9.  Who is Huawei?
    1. Huawei was founded in 1987 by Zhengfei Ren, a prominent business figure in China.
    2. Huawei is the world’s second-largest maker of smartphones (behind Samsung) and one of the world’s largest makers of telecommunication equipment.
    3. Huawei and ZTE are considered by some US officials as a threat to national security due to the potential for spying on US companies or agencies that use their equipment.

Check back for more news as they develop.

China to cut import tariffs on wide range of products.

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According to Reuters, China’s finance ministry will reduce import tariffs on textiles and metals from 11.5% to 8.4% on November 1st. Tariffs on wood and paper products, minerals and gemstones will be cut from 6.6% to 5.4%.

The reduction in tariffs on imports is part of Beijing’s efforts to increase imports this year and likely due to the current trade situation between China and the United States.

November 1st marks the second time in which China reduced import tariffs – the first reduction occured in early July and covered import tariffs on mostly consumer items – such as clothing, home appliances, fitness products among others.

US and Canada working towards NAFTA agreement.

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According to Bloomberg, the US and Canada are working on keeping Nafta an agreement between the US/Mexico and Canada.

Bloomberg quotes Mexican Economy Minister Ildefonso Guajardo as saying the US and Mexico are postponing publishing the text of their two-way trade deal in the event the US and Canada reach an agreement.