On July 1, 2020, the United-States-Mexico-Canada Agreement (USMCA) entered into force, replacing the 26-year-old North American Free Trade Agreement (NAFTA). The U.S. government has taken several steps toward implementation via executive order and proposed regulations, but the legal framework remains a work in progress.
Since the handover of Hong Kong by the United Kingdom to China in 1997, Hong Kong has enjoyed separate treatment from the mainland by the United States, other countries and international organizations pursuant to the “one country, two systems” model agreed to by the Chinese government. The United States-Hong Kong Policy Act of 1992 authorized separate treatment of Hong Kong in trade and economic relations as long as Hong Kong remains “sufficiently autonomous” from the mainland. Hong Kong’s special privileges under this law, and the laws of other countries, have contributed to Hong Kong’s status as a powerful global financial and trading hub. Continue reading →
The U.S. government has taken steps to allow the United States–Mexico–Canada Agreement (USMCA) to enter into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA). On April 24, 2020, the United States Trade Representative (USTR) notified Congress that Canada and Mexico had taken additional measures to comply with their commitments under the USMCA. The U.S. government also notified the governments of Mexico and Canada that it had completed its domestic procedures to implement the Agreement. Pursuant to its terms, the USMCA will come into force on the first day of the third month after all three Parties certify their readiness for implementation (and of the three parties, the United States was the last to issue these notifications). Continue reading →
On February 3, 2020, the Department of Commerce published a final rule that amends the regulations for countervailing duty investigations to allow the imposition of duties on countries that undervalue their currencies. Publication of the final rule follows a May 28, 2019, notice of the proposed rule. The regulation will go into effect on April 6.
On September 1, a new round of Section 301 duties will be imposed on “List 4” products. President Trump previously announced plans for these duties, but had delayed implementation in June citing progress on the negotiations with China leading up to the G20 summit. Reportedly, however, the recently resumed talks have not led to the progress desired by the Administration. In his series of tweets announcing the 10 percent tariff, President Trump stated that China had failed to purchase increased quantities of U.S. agricultural goods and reduce the flow of fentanyl into the United States.
On May 21, the Office of the United States Trade Representative (USTR) established a process through which U.S. stakeholders may exclude products included in List 3 from a 25% tariff imposed pursuant to the investigation of China’s intellectual property practices under Section 301 of the Trade Act of 1974 (“Section 301”) (discussed here). The window to submit exclusion requests will open “on or around” June 30.
Further to our prior blog post, on May 13, 2019, at the direction of President Trump, the Office of U.S. Trade Representative (USTR) published a proposed tariff list covering approximately $300 billion worth of Chinese imports to be subject to higher duties pursuant to the determinations previously made under Section 301. USTR explained that the United States and China have been engaged in negotiations on a range of issues, including, among others, forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. According to USTR, shortly in advance of the last scheduled round of negotiations, , China “retreated from specific commitments made in previous rounds”, prompting the United States to propose a fourth list of products subject to additional duties (see here and here for a discussion regarding Lists 1, 2, and 3).
On May 9, 2019, the Office of the United States Trade Representative (USTR) issued a Federal Notice indicating that tariffs on $200 billion worth of Chinese imports would be increased from 10% to 25%. These products are included in the third set of tariff categories (the first two sets are discussed here) announced by USTR in connection with the investigation under Section 301 of the Trade Act of 1974 into China’s acts, policies, and practices related to intellectual property (discussed here). The increase will go into effect on May 10, 2019 at 12:01 am eastern daylight time. Over the weekend, President Trump also threatened a 25% tariff will “shortly” be imposed on the remaining $325 billion worth of imports not currently subject to tariffs. For the prior three sets of Section 301 duties, there were proposed regulations with opportunity for public comment, and it seems likely that USTR would follow the same approach if there will be a fourth set.
On April 8, 2019, the United States Trade Representative (USTR) proposed imposing tariffs on $11.2 billion worth of products from the European Union (EU). USTR took this action in connection with an over decade long battle between the EU and the U.S. before the World Trade Organization (WTO) over mutual claims of illegal government subsidies to Airbus and its American rival, Boeing. In May 2018, the WTO Appellate Body upheld a panel finding that the EU failed to eliminate certain subsidies previously found to be WTO inconsistent, authorizing the U.S. to seek retaliatory tariffs on EU goods. USTR has estimated that the EU subsidies to Airbus have resulted in harm of $11 billion in trade annually to the U.S. This figure is subject to review by a WTO arbitrator who will determine the level of countermeasures to be authorized in the case. This report is expected to be issued this summer.
On April 17, 2019, the Trump Administration announced that it will allow U.S. citizens whose property was seized by the Cuban Government after 1959 to sue foreign companies that “traffic” in their confiscated property. This step implements Title III of the “Cuban Liberty and Democratic Solidarity Act” or “Libertad,” often referenced as the “Helms-Burton Act”, which had been suspended for over 20 years. The announcement reflects the Trump Administration’s goals of rolling back the Obama Administration’s relaxation of sanctions on Cuba and pressuring Cuba to back off its support for Nicolás Maduro in Venezuela.