2019

The U.S. Trade Representative (USTR) is required by law to report annually to Congress on compliance by the People’s Republic of China (China) and the Russian Federation (Russia) with commitments made in connection with their accession to the World Trade Organization (WTO), including both multilateral commitments and any bilateral commitments made to the United States.…

The Congressional Research Service (CRS), a nonpartisan staff to congressional committees and Members of Congress, has released an overview report, International Trade and Finance: Overview and Issues for the 116th Congress, in which it offers a brief review of President Donald Trump’s first two years in office and policy issues that the new 116th…

As reported in our post of January 25, 2019, members of the 116th session of Congress are seeking ways to address President Donald Trump’s authority to unilaterally impose tariffs under various statutes. This trend continued on January 30, 2019, with the bipartisan introduction of the Bicameral Congressional Trade Authority Act. Introduced by Sens. Mark Warner (D-VA) and Pat Toomey (R-PA), this bill would restore to Congress its Article I constitutional authority over foreign trade and commerce, specifically focusing on tariffs implemented under the claim of “national security.” The senators stated that recent Trump administration Section 232 actions have been economically disruptive and have damaged U.S. relationships with its allies, including Mexico, Canada, Japan, the EU and India.

With the 35-day partial federal government shutdown ending on January 26, 2019, the U.S. government’s trade-oriented agencies have reopened and are beginning to work through massive backlogs of work as personnel resume full-time operations. What follows is a listing of the current operational status of many of these agencies:

U.S. Customs and Border Protection (CBP)…

The U.S. Department of Justice (DOJ) unsealed two separate indictments on Monday, January 28, 2019, charging Chinese telecommunications giant Huawei with 23 counts of criminal activity. In the Eastern District of New York (EDNY), a 13-count indictment was released charging four defendants affiliated with Huawei. In the indictment, Huawei Technologies Co., Ltd., Huawei Device USA Inc., Skycom Tech Co. Ltd. (Skycom) and Huawei’s Chief Financial Officer Wanzhou Meng were charged with a variety of crimes, including bank fraud, conspiracy to commit bank fraud, wire fraud and violations of the International Emergency Economic Powers Act (IEEPA), which serves as the statutory authority for the Iranian Transactions Sanctions Regulations (ITSR). In the Western District of Washington, the second unsealed indictment charges Huawei Device Co., Ltd. and Huawei Device USA, Inc. with 10 counts of theft of trade secrets conspiracy, attempted theft of trade secrets, wire fraud and obstruction of justice where Huawei employees were allegedly encouraged to steal technology from T-Mobile USA, Inc., a large U.S. telecommunications company.

On Friday, January 25, 2019, President Trump issued a new Executive Order expanding the current sanctions imposed on the government of Venezuela to target the country’s state-owned oil company Petróleos de Venezuela, S.A. (PdVSA) – its primary source of revenue – and to increase pressure on Venezuelan President Nicolas Maduro to step down. This followed the Trump administration’s announcement on January 23, 2019 to formally recognize Juan Guaidó as the interim president of Venezuela and declare Maduro to be illegitimate. In response to the order, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) on January 28, 2019 placed PdVSA on the Specially Designated Nationals (SDN) List and issued General Licenses that will continue for a specified period of time to authorize certain transactions and activities related to PdVSA and its subsidiaries.

Companies or individuals holding debt with certain entities directly or indirectly affiliated with PdVSA must ensure they are fully aware of these recent developments. Due to these modifications, existing contracts and open obligations should be reviewed to ensure they continue to be structured within the scope of these new General Licenses, and, given this heightened political situation, companies should be prepared for additional actions taken by the Trump administration in the form of additional sanctions or other targeted prohibitions until the Maduro regime is replaced.

After much debate and despite continuing criticism, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) lifted sanctions previously imposed upon three Russian entities: En+ Group plc (En+), United Company Rusal plc (Rusal) and JSC EuroSibEnergo (ESE). Effective January 27, 2019, OFAC removed these entities from the Specially Designated Nationals (SDN) List.

This month, two bills have already been introduced in the House of Representatives that show the division among Republican Party members over President Donald Trump’s authority to impose tariffs. On one side of the debate, Rep. Warren Davidson (R-Ohio) introduced the Global Trade Accountability Act of 2019, which seeks to restore Congress’s constitutional authority over trade and international commerce, including approval on tariffs, duties and quotas. In a brief statement, Davidson stated that the bill seeks to “support the President’s Constitutional authority to negotiate trade deals, and restore Congressional responsibility for reinforcing, improving, and approving trade policy.” The bill would require congressional approval for any “unilateral trade action” by the president – including any of the following actions concerning the importation of an article: (i) a prohibition on the importation of the article; (ii) the imposition of or an increase in a duty applicable to the article; (iii) the imposition or tightening of a tariff-rate quota applicable to the article; (iv) the imposition or tightening of a quantitative restriction on the importation of the article; (v) the suspension, withdrawal or prevention of the application of trade agreement concessions as to the article; or (vi) any other restriction on the importation of the article. Before such trade actions could be implemented, the president would be required to submit to Congress a report providing sufficient details on the proposed trade action, and a joint resolution would have to be approved. Davidson previously introduced the bill in the last session of Congress but the legislation did not advance. It is possible, however, that there may be a shifting of congressional direction on this matter given the ongoing trade dispute with China and recent statements from Sen. Chuck Grassley (R-Iowa) that he, as chairman of the Senate Finance Committee, intends to introduce legislation that would limit the president’s authority to impose tariffs.

The White House has released a fact sheet listing the “historic results” of President Donald Trump’s first two years in office. For international trade, these results are listed:

”NEGOTIATING BETTER DEALS FOR THE AMERICAN PEOPLE: President Trump is negotiating fair and balanced trade deals that protect American industries and workers.

  • President Trump negotiated a new

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Three weeks after the partial federal government shutdown began and shuttered most of the trade-related government agencies in Washington, D.C. (see Trump and Trade Update dated December 26, 2018), the Office of the U.S. Trade Representative (USTR) – which had remained fully operational – has indicated that it will begin to furlough staff on…