President Trump

The Trade War Wages On
Economic trade war between USA and China

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By Susan Kohn Ross

As has been repeatedly mentioned in the general press, President Trump tweeted on August 1st that the U.S. “will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country.” There are lots of questions about what that short message actually means, and right now, no answers. So far, there is no official notice from the U.S. Trade Representative (USTR) for publication in the Federal Register. There is nothing new posted on the USTR website. We know the President said he picked September 1st because there are goods on the water, but we do not know whether September 1st is the date by which the goods must arrive in the U.S., or must be exported from China. Will the products on List 4 change from those originally published? Whatever goods are on the final version of List 4, will at least some of the products be listed to the 10-digit level? Right now, all products are listed to the eight-digit level, but the descriptions assigned to those classifications, in some cases, do not include all the products encompassed by the very different products classified under that eight-digit number. This is typically the case due to either the type of good or its constituent material. (more…)

Tariff Turbulence Continues to Fly!
USA Mexico Trade War

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By Susan Kohn Ross

Putting all the hyperbole and posturing to one side, the recent agreement between Mexico and the U.S. which averted the tariffs can be found in the U.S. – Mexico Joint Statement released June 7, 2019. It consists of a few broad policy statements:

  1. Mexico will deploy its National Guard throughout Mexico, giving priority to its southern border – meaning the border with Guatemala;
  2. Mexico will take “decisive” action to dismantle human smuggling and trafficking organizations and their illicit financial and transportation networks;
  3. The U.S. and Mexico will strengthen bilateral cooperation, including information sharing and coordinated actions to better “protect” and “secure” their common border;
  4. The U.S. will immediately expand the existing Migrant Protection Protocols so that those crossing into the U.S. to seek asylum will be “rapidly” returned to Mexico where they “may” await adjudication of their asylum claims;
  5. Mexico agrees to “authorize” the entrance of those individuals for humanitarian reasons, in compliance with its international obligations, while they await adjudication of their claims;
  6. Mexico will offer jobs, healthcare and education to those individuals according to its principles; and
  7. The U.S. commits to “work to accelerate” the adjudication of asylum claims and “conclude removal proceedings as expeditiously as possible.”

(more…)

Trade Trouble – East, West and South, but North is Settled for Now!
Container Ship Enroute to Port

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By Susan Kohn Ross

Agriculture Secretary Perdue recently stated the trade damages to be addressed in a new round of farm aid is $15 to $20 billion! The general press is replete with stories about how, as these tariffs continue, companies are making sourcing changes that will be hard to reverse. So, what is the latest news?

First, there is trade with China. It seems clear that unless there is a breakthrough at the G-20 meeting in Tokyo, or shortly thereafter, the anecdotal headaches we hear about will get far more costly. The American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai conducted a survey before List 3 was announced. Even at that point, American companies operating in China acknowledged higher production costs, decreased demand for products, reduced staffing, reduced profits, increased inspections at importation, increased bureaucratic oversight and regulatory scrutiny, slower approval of licenses and permits, higher product rejections, and increasing plans to relocate (but not back to the U.S.). (more…)

USTR Publishes 301 Product List / China Reacts With Its Own List
Tariffs - just ahead

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By Susan Kohn Ross and Kevin Rosenbaum

The U.S. Trade Representative (“USTR”) has prepared for publication a Federal Register Notice (“Notice”) that identifies a list of approximately 1,300 tariff lines on which it proposes to levy additional duties of up to 25% on goods made in China. The pre-published copy of the Notice was released yesterday, April 3, 2018, and includes an Annex identifying the products on which USTR proposes to assess the additional duties. The notice can be found here.  According to an accompanying press release, the sectors targeted for the proposed tariffs “include industries such as aerospace, information and communication technology, robotics, and machinery.” The press release further indicates these tariffs are intended to combat China’s “industrial plans, such as ‘Made in China 2025.’” The tariffs, therefore, are intended to “target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy.”

The Notice announces a public hearing and an opportunity for interested parties to submit written comments. The public hearing will take place on May 15th; interested members of the public must file requests to appear at that hearing, and a summary of expected testimony as well as any other pre-hearing submissions are due by April 23rd. Written comments must be filed by May 11th, and any post-hearing rebuttal comments are due May 22nd. (more…)

Trade Trifecta!
USA and Chinese flags on mountain signpost.

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By Susan Kohn Ross

Some events rather significant to international traders occurred in the last few days. First, on Friday, March 23, 2018, President Trump signed the latest spending bill. It includes a provision to renew Generalized System of Preferences (“GSP”) benefits retroactive to December 31, 2017, when the program last expired. GSP is now authorized through December 31, 2020.

With history as a guide, we should expect Customs and Border Protection to shortly publish a message advising when its programming is updated, the deadline by which to file refunds and similar details. In the past, so long as the entry was filed with an “A” or similar indicator, refunds were routinely issued, but importers would still be wise to make sure their list of eligible entries is current, and then to track their refunds. Since the bill was signed into law on Friday, the deadline to file refund requests will be 180 days later, which works out to September 18, 2018. (more…)

New Tariffs: Definition & Exclusion
storehouse

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By Susan Kohn Ross

When President Trump announced the 25% steel and 10% aluminum tariffs on March 8, 2018, he instructed the Secretary of Commerce to issue regulations explaining how American companies could seek exclusions from those tariffs no later than March 19, 2018, and that deadline has been met. These new regulations can be found here.

Before we discuss the new regulations, we should start with the data Customs and Border Protection (CBP) released with its programming updates to implement these safeguard tariffs. (more…)

Clanging: Here Come Those New Steel and Aluminum Tariffs!
Straight row of metal bars after grinding

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By Susan Kohn Ross

Earlier today, March 8, 2018, President Trump signed two Presidential Proclamations, one dealing with additional tariffs on steel and the other with additional tariffs on aluminum. As has been widely reported in the general press, those rates are 25% on steel and 10% on aluminum. The only countries exempted are Canada and Mexico.

Steel articles are defined as those which are classified under HTSUS 7206.10 through 7216.50 (including ingots, bars, rods and angles), 7216.99 through 7301.10 (including bars, rods, wire, ingots, and sheet piling), 7302.10 (rails), 7302.40 through 7302.90 (including plates and sleepers), and 7304.10 through 7306.90 (including tubes, pipes and hollow profiles). Aluminum products are defined as unwrought aluminum (HTS 7601); aluminum bars, rods, and profiles (HTS 7604); aluminum wire (HTS 7605); aluminum plate, sheet, strip and foil (flat rolled products) (HTS 7606 and 7606); aluminum tubes and pipes and tube and pipe fittings (HTS 7608 and 7609); and aluminum castings and forgings (HTS 7616.99.5160 and 7616.99.51.70). (more…)

Steel & Aluminum: Tough Tariffs, Tough Road Ahead?
steel

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By Susan Kohn Ross

Earlier today, President Trump announced his intention to adopt the recommendations of the Dept. of Commerce and impose tariffs on imports of steel and aluminum. The formal signing is said to be taking place “next week.” President Trump has stated those tariffs will be 25% on foreign-made steel and 10% on foreign-made aluminum. Hopefully when the final document is signed and released, it will become clear how long these tariffs will be in place and whether they will be accompanied by any other measures, such as quotas.

Commerce’s original steel recommendations were: (i) a 24% tariff on all steel imports; or (ii) a 53% tariff on steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam; which (iii) could include a quota from all other countries equal to their 2017 level of imports; or (iv) no tariffs, but a quota on all steel products from all countries equal to 63% of their 2017 import levels. (more…)

New Tariffs: Trade War Washing Ashore?
solar panels under blue sky on sunset

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By Susan Kohn Ross

Yesterday, January 22, 2018, U.S. Trade Representative (USTR) Robert Lighthizer announced the imposition of safeguard tariffs on solar cells and modules. Much has been said in the general press about this case, but only now is the key point starting to register, and is something international traders immediately thought about – is President Trump starting a new trade war with China?

By way of a quick summary, after seeking relief through the antidumping and countervailing duty laws and not getting the desired market relief, Suniva, later joined by SolarWorld, invoked Section 201 of the Trade Act of 1974. The appropriate petition was brought, the International Trade Commission (ITC) conducted the required proceedings, found detrimental harm, and made recommendations to the President. While disagreement among the Commissioners was acknowledged, most favored an increase in duties, and President Trump agreed. Safeguard tariffs have been imposed for four years – the maximum length of time permitted – on a per year basis – 30%, 25%, 20% and 15%. The USTR announcement also states the first 2.5 gigawatts of imported cells are excluded from the safeguard tariff. A critical point here is these safeguards are being imposed on both the cells and the modules, regardless of where made, as would be expected from a global safeguard, but the solar cells are overwhelmingly made in China. (more…)

Walking the North Korean Tightrope
Sanctions against North Korea. Concept

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By Susan Kohn Ross

On September 21, 2017, President Trump issued an Executive Order (yet to be numbered) (“EO”) imposing additional sanctions on North Korea. It took effect the next day. The general press has quoted Treasury Secretary Mnuchin as stating: “Foreign financial institutions are now on notice that going forward they can choose to do business with the United States or North Korea, but not both.” These latest changes raise the specter for even more caution on the part of companies conducting international business. The question every CFO at every company should ask is – is our due diligence program as good as it needs to be? If not, your funds could get seized and dealing with the Dept. of Justice in these types of cases can be quite challenging.   The government often has information the private sector does not possess and, if your due diligence program is not deemed sufficient, you stand little chance of getting those funds released. Given the current climate, you can bet getting funds released related to the North Korea sanctions is going to be even more difficult!

The new Executive Order is broadly worded to include any person who is determined: (more…)