May 2019

During the month of May while President Donald Trump’s escalating trade war with China was garnering most of the headlines, the Trump administration also continued to apply economic pressure on Venezuela. In May, the Departments of Commerce, State and the Treasury further tightened sanctions and export restrictions on Venezuela.

On May 10, 2019, the Department of State announced that, pursuant to Executive Order 13850, the United States determined persons operating in the defense and security sector of the Venezuelan economy may be subject to economic sanctions. On the same date, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies that operate in the oil sector of the Venezuelan economy, and also sanctioned two vessels, which transported oil from Venezuela to Cuba:

  • Monsoon Navigation Corporation is based in Majuro, Marshall Islands, and is the registered owner of the vessel, Ocean Elegance.
    • Ocean Elegance is a crude oil tanker (IMO: 9038749) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.
  • Serenity Maritime Limited is based in Monrovia, Liberia, and is the registered owner of the vessel, Leon Dias.
    • Leon Dias is a chemical and oil tanker (IMO: 9396385) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.

In a proposed rule scheduled for publication in the May 28, 2019 Federal Register, the International Trade Administration (ITA) of the Department of Commerce (Commerce) is proposing to modify two regulations that would clarify how ITA determines the existence of a benefit resulting from a subsidy in the form of currency manipulation and undervaluation and how companies in the traded goods sector of an economy can constitute a group of enterprises for purposes of determining whether a subsidy is specific. In a Commerce press release, Secretary Wilbur Ross stated, “This change puts foreign exporters on notice that the Department of Commerce can countervail currency subsidies that harm U.S. industries … Foreign nations would no longer be able to use currency policies to the disadvantage of American workers and businesses.”

In a filing with the Office of Management and Budget (OMB) seeking emergency clearance for an information collection and form approval, the Office of the U.S. Trade Representative (USTR) formally indicated that it is “establishing a process by which U.S. stakeholders can request the exclusion of particular products classified within a covered tariff subheading from…

On May 20, 2019, the Department of Commerce’s Bureau of Industry and Security (BIS) issued a 90-day temporary general license that partially restored the export licensing requirements under the Export Administration Regulations (EAR) for exports, reexports and transfers (in-country) to Huawei Technologies Co., Ltd. and its 68 affiliates (Huawei), which were added to the Entity List on May 16, 2019 (see Trump and Trade Update of May 17, 2019). The temporary general license permits these activities:

  • Continued Operation of Existing Networks and Equipment, subject to other provisions of the EAR, necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches, subject to legally binding contracts and agreements executed between Huawei and third parties on or before May 16, 2019.
  • Support to Existing Handsets, subject to other provisions of the EAR, necessary to provide service and support, including software updates or patches, to existing Huawei handsets that were available to the public on or before May 16, 2019.
  • Cybersecurity Research and Vulnerability Disclosure, subject to other provisions of the EAR, the disclosure to Huawei of information regarding security vulnerabilities in items owned, possessed or controlled by Huawei when related to the process of providing ongoing security research critical to maintaining the integrity and reliability of existing and currently fully operational networks and equipment, as well as handsets.
  • Engagement as Necessary for Development of 5G Standards by a Duly Recognized Standards Body, subject to other provisions of the EAR, engagement with Huawei as necessary for the development of 5G standards as part of a duly recognized international standards body (e.g., Institute of Electrical and Electronics Engineers (IEEE), Internet Engineering TaskForce (IETF), International Organization for Standards (ISO), International Telecommunications Union (ITU), European Telecommunications Standards Institute (ETSI), 3rd Generation Partnership Project (3GPP), Telecommunications Industry Association (TIA), and GSM Association (GSMA or Global System for Mobile Communications)).

On May 17, 2019, the United States, Canada and Mexico concluded an agreement in which the United States agreed to remove the Section 232 tariffs for steel and aluminum imports from those countries and Canada and Mexico agreed to remove all retaliatory tariffs imposed on U.S. goods. Accordingly, President Donald Trump issued proclamations declaring that…

On May 16, 2019, President Donald Trump issued a proclamation reducing Section 232 tariffs on steel imports from Turkey from 50 percent to 25 percent, which had been in effect since August 2018 (see Trump and Trade Update of August 17, 2018). This tariff decrease will become effective May 21, 2019, at 12:01 a.m.…

President Donald Trump today announced that his administration would delay for six months any action on the determination of the Department of Commerce (Commerce) in the Section 232 national security investigation into imports of automobiles and automobile parts. This investigation under Section 232 of the Trade Expansion Act of 1962 was self-initiated by Commerce in…

The Federal Register notice filed by the Department of Commerce’s Bureau of Industry and Security (BIS) to be published on Tuesday, May 21, 2019, indicates that the U.S. government has added Huawei and 68 of its non-U.S. affiliates to the Entity List because BIS has found that “there is reasonable cause to believe that Huawei…

President Donald J. Trump has issued an executive order, “Securing the Information and Communications Technology and Services Supply Chain,” that declares a national emergency as to the threats against information and communications technology and services in the United States. It delegates authority to the secretary of Commerce to prohibit transactions posing an unacceptable risk to the national security of the United States or the security and safety of U.S. persons. In a brief press statement, the White House noted, “The President has made it clear that this Administration will do what it takes to keep America safe and prosperous, and to protect America from foreign adversaries who are actively and increasingly creating and exploiting vulnerabilities in information and communications technology infrastructure and services in the United States.”

After trade negotiations between China and the United States faltered last week, China announced on May 13, 2019, that it would retaliate against the United States’ increase in Section 301 tariffs on certain Chinese products from 10 percent to 25 percent (see Trump and Trade Update of May 9, 2019). China’s Ministry of Finance announced that as of June 1, 2019, it will increase the tariffs on imports of U.S. goods valued at approximately $60 billion in response to the increase in tariffs implemented by the United States. While not adding goods to its list at this time, China will be increasing the tariffs it imposed on over 5,000 U.S. products on September 24, 2018 (see Trump and Trade Update of September 19, 2018). With the May 13 announcement, the Ministry of Finance indicated that on June 1, 2019, 2,493 U.S. products will now be subject to a 25 percent tariff; 1,078 products will be increased to a 20 percent tariff; and 974 products will be subject to a 10 percent tariff. A 5 percent tariff will remain in place on 595 U.S. products. (Note: All of the linked documents related to the announcement by China’s Ministry of Finance are in Chinese. As soon as English translations become available, they will be posted.)