I want to file a 301 exclusion – what info do I need to provide the USTR?

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As you are aware, the exclusion process for List 3 is now openuntil September. We have received a lot of exclusion requests and I thought I’d share the information the US Trade Representative (USTR) requires in order to review an exclusion request:

1. 10-digit subheading of the HTSUS applicable, use 8/10 digits (if there are different HTSUS 8 and 10 digit codes used, we will need a separate request)

2. Product name

3. Detailed description of the product: (1) physical characteristics (e.g., dimensions, weight, material composition, etc.). (2) Requestors may submit a
range of comparable goods within the product definition set out in an exclusion request. Thus, a product request may include two or more goods with
similar product characteristics or attributes. Goods with different SKUs, model numbers, or sizes are not necessarily different products.

4. The products function, application (whether the product is designed to function in or with a particular machine or other device), principal use, and any
unique physical features that distinguish it from other products within the covered 8-digit HTSUS subheading. Requestors may submit attachments that
help distinguish the product (e.g., CBP rulings, photos and specification sheets, and previous import documentation). Documents submitted to support a
Requestor’s product description must be made available for public inspection and contain no BCI. USTR will not consider requests that identify the
product using criteria that cannot be made available for public inspection.

5. Requestors must provide their relationship to the product (Importer, U.S. Producer, Purchaser, Industry Association, Other) and provide specific data
on the annual quantity and value of the Chinese-origin product, domestic product, and third-country product the Requestor purchased, in 2017, 2018,
and the first quarter of 2019.

6. Requestors must provide information regarding their company’s gross revenues for 2018, the first quarter of 2018, and the first quarter of 2019.

7 For imports sold as final products, Requestors must provide the percentage of their total gross sales in 2018 that sales of the Chinese-origin product
accounted for.

8. For imports used in the production of final products, Requestors must provide the percentage of the total cost of producing the final product(s) the
Chinese-origin input accounts for and the percentage of their total gross sales in 2018 that sales of the final product(s) accounted for. Required
information regarding the Requestor’s purchases and gross sales and revenue is BCI and the information entered will not be publicly viewable.

9. Whether the particular product is available only from China and whether the particular product and/or a comparable product is available from sources
in the United States and/or in third countries. The Requestor must provide an explanation if the product is not available outside of China or the Requestor
is not sure of the product availability.

10. Whether the Requestor has attempted to source the product from the United States or third countries.

11. Whether the imposition of additional duties (since September 2018) on the particular product has or will cause severe economic harm to the
Requestor or other U.S. interests.

12. Whether the particular product is strategically important or related to “Made in China 2025” or other Chinese industrial programs.

If you have any questions about the exclusion request process, contact experienced attorney trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com.

France to begin digital tax against Google, Amazon, Facebook, and Apple.

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While the Trump administration investigates Google and other tech companies for potential anti-trust violations here in the US, the Trump administration has threatened retaliatory tariffs against French imports if France implements a tax on digital activities.

The digital tax law was passed by the French Parliament on July 11th and to tax Google, Amazon, Facebook and Apple (known as the “GAFA” companies). The 3% tax on digital services would generate 400 million euros in 2019 and expected to generate 650 million by 2022.

In response, the US Trade Representative has begun an investigation against France for unfairly targeting US-based companies and is now open for public comment before a public hearing on August 19th.

We may see new tariffs on the over 36 billion in French imports into the US starting in August. If you import any items from France and want to know how you may be impacted, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

Apple shifts Mac Pro production to China, then asks to not pay tariffs on imported Mac Pros.

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The Mac Pro was the last Apple product manufactured in the US, and last June, Apple announced they would shift Mac Pro production to China.

On July 18th, Apple filed “exclusion requests” with the US Trade Representative to exclude certain items from the 25% 301 duties on goods imported from China.

The parts include a CPU, heat sink, power supplies, USB charging cables, circuit boards, graphics processing modules, computer enclosure, the Magic Mouse and Magic Trackpad.

To view Apple’s exclusion requests, go here: https://exclusions.ustr.gov/s/PublicDocket and search by “Organization Name” for “Apple”.

If you want to file an exclusion request, contact experienced trade attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

US/China trade talks amid new charges against Huawei.

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Earlier this week, Chinese Vice Premier Liu He and his trade team arrived in the US to begin negotiations with US Trade Representative Robert Lighthizer. At about the same time of Vice Premier Liu He’s arrival, the US Department of Justice announced charges against Huawei for violations of US sanctions against Iran and among other things, theft of US intellectual property from T-Mobile.

Negotiations are in progress to reach a deal that could prevent an additional 15% tariff (total 25%) on $200 billion worth of goods from China before the March 1st deadline.

Since the truce, China has increased their purchases of American exports, such as soy beans and have also taken steps to crackdown on intellectual property theft. However, the US government is also requesting China open its market and limit government direction for state-owned enterprises (SOE). A change to Beijing’s economic support of certain industries is likely something that will not change.

Check back for the latest news as it becomes available. If you have any export compliance questions or have concerns about compliance with US sanctions, contact trade attorney, David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

Key 2019 Trade Deadlines.

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Happy new year everyone! Hope your new year is off to a great start.

2018 was a busy year for trade policy and 2019 will likely continue that trend. Here’s some important dates for trade in this new year:

1/1/2019 – the updated US trade agreement with South Korea signed in September 2018 will enter into force.

1/7/2019 – during this week, a US delegation will travel to Beijing for trade talks with Chinese officials. This will be the first face to face meeting since President Trump met with President Xi Jinping at the G20 summit on December 1st.

1/7/2019 – while a delegation goes to Beijing, the EU Trade Commissioner will meet with USTR Robert Lighthizer on other trade negotiations with the EU.

1/10/2019 – this is the deadline for submission of comments by US businesses regarding restrictions on high-tech American exports such as microprocessors and robotics

1/21/2019 – the US and Japan will likely enter into formal talks for a trade agreement.

2/17/2019 – deadline for the U.S. Department of Commerce to publish their report on the justification of tariffs on foreign cars. Once a report is submitted, President Trump has 3 months (May 18th) to make a decision on tariffs for foreign cars.

3/1/2019 – end of the 90-day truce started on December 1st. If no trade agreement is reached, $200 billion of Chinese goods will see increased tariffs from 10% to 25%.

4/2019 – deadline for the U.S. Department of Commerce to publish a national-secuirty report on the impact of uranium imports.

1st half of 2019 – congress will vote on the U.S.-Mexico-Canada Agreement to replace NAFTA.

Check back for more updates as they become available. If you have any questions how these upcoming events will impact your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

US Trade Representative Lighthizer will meet with tech CEOs.

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According to anonymous sources, U.S. Trade Representative Robert Lighthizer will meet with CEO’s from Google, Microsoft, Qualcomm and Oracle today in Silicon Valley.

The topics likely center around intellectual property protections, the ongoing trade war, reports of bias in news searches, emerging technologies such as 5G, AI and robotics.

Other topics could include the Trump Administration’s plan to increase restrictions on exports of new technologies to China due to national security concerns. The new technologies include AI, quantum computing, and speech recognition.

Check back for more news as they become available.

The NAFTA (USMCA) loyalty oath?

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As has been widely reported, the new NAFTA agreement (USMCA) contains what has been branded a “loyalty oath” among the US, Canada and Mexico.

What is this “loyalty oath”?
In short, the oath says that in the event any USMCA member enters into a free trade agreement (FTA) with a non-market country, the other two remaining countries can leave the agreement and form their own bilateral trade pact.

Why is this clause in the USMCA?
This clause is likely an effort by the US Administration to isolate China economically since neither Canada or Mexico would want to leave the USMCA. This clause is also aimed at limiting the imports from China to Mexico/Canada for shipment into the US duty free.

Is a “loyalty oath” found in other trade agreements?
Currently, no, however this inclusion in the USMCA may be an indication of what will occur in future trade agreements to further isolate China from their trading partners.

Is the “loyalty oath” set in stone?
Right now, no, the disclaimer on the current USMCA text states: “Subject to Legal Review for Accuracy, Clarity, and Consistency Subject to Language Authentication“. Only upon ratification by all countries can we know for sure whether this is in the agreement.

What is a market or non-market economy?
This loyalty oath against non-market economies is likely aimed at China while not specifically named in the agreement. Beijing has asked for recognition as a “market economy” within the World Trade Organization (WTO) since their accession agreement expired in December 2016. If China is branded a “market economy”, this would limit trade remedies such as anti-dumping/countervailing duties to be used against Chinese imports.

What are the non-market economies around the world?
According to the European Union, besides China, the other non-market economies include Vietnam, Kazakhstan, Albania, Armenia, Azerbaijan, Belarus, Georgia, the Democratic People’s Republic of Korea, Kyrgyzstan, Moldova, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan.

Where can I read the full text of the “loyalty oath”
I could not find any news sources that cited the USMCA section.

The exact text of the oath is copied below:

4. Entry by any Party into a free trade agreement with a non-market country, shall allow the other Parties to terminate this Agreement on six-month notice and replace this Agreement with an agreement as between them (bilateral agreement).

The official PDF on the US Trade Representative website can be accessed here: (last accessed October 9, 2018).

https://ustr.gov/sites/default/files/files/agreements/FTA/USMCA/32%20Exceptions%20and%20General%20Provisions.pdf

See Article 32.10 (4)

If you have any questions about NAFTA or the USMCA and how this may impact your business, call experienced trade attorney, David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

Current US Tariff Action Deadlines

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I receive many questions about the deadlines for all the various tariff actions, I thought I’d post all the upcoming deadlines for your convenience.

If you have any questions regarding any 301 or 232 duties or are interested in filing of comments or an exclusion, or need assistance filing a response to comments, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

August 20-23 – Public hearing in DC for List 3

August 23, 2018 – 25% duty effective on List 2

September 6, 2018 – deadline to submit written comments for List 3

September 6, 2018 – deadline to submit post-hearing rebuttal comments

October 9, 2018 – deadline for product-specific exclusions for List 1

14 days after request for exclusion posted on docket – deadline for responses to requests for product-specific exclusion.

7 days after the close of response period – deadline for responses filed during the 14-day response period.

To Be Announced – 10% or 25% duty on List 3

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 attorney.dave@yahoo.com.

Trump proposes further tariffs on $200 billion worth of Chinese goods.

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Official Portrait of Ambassador Robert E. Lighthizer

US Trade Representative (USTR), Robert Lighthizer released a statement supporting Trump’s request for the USTR to identify $200 billion worth of Chinese goods for an additional 10% in tariffs.

This follows Trump’s announcement last Friday of a 25% tariff on $50 billion in Chinese goods to counter what Trump claims to be “China’s theft of intellectual property and technology and its other unfair trade practices”.

Lighthizer’s full statement reads:

“I support the President’s action. The initial tariffs that the President asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese. It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses. At the President’s direction, USTR is preparing the proposed tariffs to offset China’s action.”

Call David Hsu if you have any questions on how US and Chinese tariffs may impact your business, 832-896-6288 or mail at attorney.dave@yahoo.com.