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.

Canada approves USMCA trade deal.

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While the US is focused on the Corona Virus (COVID-19), on Friday, Canada formally approved the United States-Mexico-Canada Agreement (USMCA), the last nation needed to implement the deal to replace the 25-year-old North American Free Trade Agreement (NAFTA).

The trade deal was ratified by the Mexican legislature last June, the US legislature this past January and formally ratified by Canada on Friday. The Canadian parliament is now shut down for five weeks in response to the coronavirus pandemic.

Contact experienced trade attorney David Hsu by phone/text at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com if you have any questions about how the new USMCA will impact you and your business!

Japan-US Trade Pact in effect starting January 1, 2020.

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Mt. Fuji in the background, source: Jane Chang

The Japan-U.S. trade agreement started in April 2019, and starting January 1st, comes into effect, resulting in an immediate cut in tariffs on American farm products and a variety of Japanese industrial goods. Unfortunately, the trade agreement does not include passenger cars and auto parts. In addition to a trade agreement, the US and Japan reached an agreement on digital trade. As the US pulled out of the Trans-Pacific Partnership, this trade agreement was crucial for continued US/Japan trade.

Some terms of the trade deal include a reduction in import duty of US beef from 38.5% to 26.6%, with the ultimate duty rate of 9% in 2033. Other duties on cheese, wine, pork will eventually reach zero. In return, US duties on Japanese air conditioner parts and fuel cells were also removed as part of the deal.

While this current trade deal does not address import duties on cars and parts from Japan, second round talks with Washington (set for April 2020) may result in a trade deal. But the United States maintains import duties on cars and auto parts from Japan, despite strong calls for their abolition by the Japanese side.

We have been keeping up with this new trade deal, if you are wondering how it may impact your business, give us a call or text at 832-896-6288 or send us an email to David Hsu at attorney.dave@yahoo.com or work official email: dh@gjatradelaw.com.

US China Trade Deal as of 12/13/2019.

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

As you are aware, the Trump administration has confirmed a trade deal with China has been reached.

Phase one of the trade deal was just announced:

-List 1 remains at 25%

-List 2 remains at 25%

-List 3 remains at 25%

-List 4b is gone (4b was initially scheduled to take effect December 15th, and included consumer electronics such as cell phones, laptops, computers, etc.).

-“Most” (not all) of List 4a is going to drop to 7.5%.

We will monitor the Federal Register for what specifically is being reduced. If you have any further questions, contact experienced trade attorney David Hsu for immediate help 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.

 

US and Japan reach trade deal.

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Last week, President Trump and his counterpart Prime Minister Abe of Japan reached a trade deal to cut tariffs and increase trade between the two nations.

Part of the deal includes Japan agreeing to reduce or cancel tariffs on American agricultural exports such as beef, corn, pork and fruit – with the US agreeing to reduce tariffs on bicycles, flowers, tea and other industrial products.

At the same time, the agreement prohibits future tariffs on streaming videos, music and video games.

If you have any questions about how the new trade deal with Japan 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.

Japan seeks assurance from US on car tariffs.

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Trade representatives from the US and Japan are working out details for a trade deal between the two nations – with both sides hoping to sign a trade deal this week during the United Nations General Assembly in New York.

Previously, Trump has threatened the imposition of tariffs of upwards of 25% on Japanese cars, and the Japanese want a clause added to any trade deal that would cancel any trade benefits if and when the US imposes tariffs on automobiles.

This is the only issue currently delaying the signing of a long awaited trade deal between the US and Japan.

Other parts of the trade deal are expected to include more access for US farmers to the Japanese market, modernization of digital trade rules, internet development, prohibition of cross-border taxation of e-commerce and data localization requirements.

Post Brexit US, Britain trade deal?

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According to the Associated Press, at last week’s visit to London, Vice President Pence indicated to Britain’s Prime Minister Boris Johnson that President Trump would be eager to reach a new trade deal with the UK once the UK leaves the European Union with the AP quoting Vice President Pence: “The minute the U.K. is out, America is in”.
While the US may be eager to join a trade deal, the AP cited British officials who are hesitant to entering into any deals that may favor the US. For example, the EU agriculture policy benefits British farmers, and any trade deal will include US demands for more access for agricultural products.
Another trade issue that will arise post-Brexit is between the UK and Ireland. With the
UK and Ireland belonging to the EU, free trade of people and goods has moved across the border with no problem. However, post-Brexit, this may complicate a new trade deal with the UK. In 2018, the UK was America’s 4th biggest export market with a US trade surplus of $18.6 billion.

Potential US Japan deal looks to boost US agriculture exports.

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As promised during his campaign, President Trump withdrew the US from the Trans Pacific Partnership – leaving Canada, Mexico and Australia as the major players; opting instead to enter into bilateral agreements with individual countries.
After the TPP took effect this January, US farm exports to Japan dropped by 2% for the first half of the year, with a projected annual net farm income loss of $4.4 billion annually. This could be due to US exports of beef to Japan now subject to a 38.5% duty, ground pork at 20% and some cheeses at 40%. The lack of a trade deal has also impacted
Japan’s exporters of steel and aluminum to the US. The President has previously threatened Japan with duties on auto imports.
The US and Japan have reached an agreement in principle expect to make the trade deal official in the upcoming months.