On July 13, 2018, the Department of Commerce’s Bureau of Industry and Security issued an order terminating the April 15, 2018 Denial Order against Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. (collectively, ZTE). The order confirms that ZTE paid the $1 billion penalty and complied with the requirement of depositing $400 million in
Trade Remedy/Enforcement
ZTE Corporation Moves Closer to Removal of Denial Order
As reported in a Trump and Trade Update dated June 8, 2018, the Department of Commerce reached a superseding settlement agreement with Zhongxing Telecommunications Equipment Corporation of Shenzhen, China (ZTE Corporation) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (ZTE Kangxun) (collectively, ZTE) to remove the Department of Commerce’s Bureau of Industry and Security (BIS) denial order imposed as a result of ZTE’s violations of its March 2017 settlement agreement. BIS has now published the superseding settlement agreement.
European Union and Turkey Announce Tariffs on Certain U.S. Products
In March 2018, President Trump announced that under Section 232 of the Trade Expansion Act of 1962, the United States would increase tariffs on imports of certain steel products by 25 percent and imports on certain aluminum products by 10 percent on countries worldwide, including imports from the members of the European Union (EU) and Turkey. Although the EU was initially exempted from the imposition of tariffs, these tariffs came into place pursuant to two Presidential Proclamations issued on May 31, 2018. In response, the EU and Turkey announced their intent to impose retaliatory tariff measures.
President Trump and Chairman Kim Issue Joint Statement; U.S. Sanctions to Remain in Place
President Donald Trump and Chairman Kim Jong Un issued a joint statement at the conclusion of their summit in Singapore in which both countries committed to further negotiations and future cooperation for the development of new relations between the United States and the Democratic People’s Republic of Korea. In the statement, Trump committed “to provide…
Department of Commerce Announces Sanctions Deal with China’s ZTE, but Will Congress Block It?
On June 7, 2018, the U.S. Department of Commerce announced that Zhongxing Telecommunications Equipment Corporation of Shenzhen, China (ZTE Corporation) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (ZTE Kangxun) (collectively, ZTE) had agreed to additional penalties and compliance measures to replace Commerce’s Bureau of Industry and Security (BIS) denial order imposed as a result of ZTE’s violations of its March 2017 settlement agreement. On April 15, 2018, BIS activated the suspended denial order against ZTE after learning that ZTE had not disciplined numerous employees responsible for the violations that led to the settlement agreement. Instead, ZTE rewarded those employees with bonuses. With the imposition of the denial order by BIS, ZTE announced in early May 2018 that all major operating activities of the company had ceased as a result of the denial order. On May 13, 2018, President Trump, against the advice of U.S. law enforcement and intelligence officials, announced that “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”
Trump Administration Implements Section 232 Tariffs on Steel and Aluminum Imports from Canada, Mexico and the European Union
President Donald Trump signed yesterday two presidential proclamations adjusting imports of aluminum and steel into the United States. In doing so, he stated that measures are now in place to address the impairment to the national security threatened by imports of steel and aluminum from Argentina, Brazil and Australia. South Korea previously reached an agreement with the United States on April 30 to limit its imports of steel. President Trump added, however, that “similar measures are not in place with respect to steel or aluminum imports from Mexico, Canada or the European Union” and that insufficient progress had been made in ongoing negotiations with these countries. He declared that, as of June 1, 2018, the Section 232 tariffs for steel of 25 percent and for aluminum of 10 percent will no longer be suspended for such imports from these countries. The White House indicated that it will continue discussions with them and remains open to discussions with other countries that may lead to permanent country-based exemptions.
Department of Commerce Preliminarily Determines Countervailing Duties for U.S. Imports of Chinese Aluminum Sheet
In its self-initiated investigation, the Department of Commerce has preliminarily determined that countervailing duties (CVD) should be assessed for imports of aluminum sheet from China to counteract Chinese government subsidies. Commerce calculated a 31.20 percent CVD rate for Chinese respondent Yong Jie New Material Co., Ltd.; a 34.99 percent CVD rate for respondents Henan Mingtai Industrial Co., Ltd. and Zhengzhou Mingtai Industry Co., Ltd.; and a 33.10 percent CVD rate for all other Chinese producers and exporters. Due to their failure to cooperate in the investigation, Commerce assigned a 113.30 percent CVD rate to respondents Chalco Ruimin Co., Ltd. and Chalco-SWA Cold Rolling Co., Ltd.
Senate Finance Committee Holds Hearing on Market Access Challenges in China
On April 11, 2018, the Senate Committee on Finance held a hearing regarding the challenges that U.S. businesses, manufacturers and service providers face when trying to access the Chinese market. Links to the witnesses’ written testimony are provided below. Before the committee, these industry witnesses consistently indicated that a long-term strategy – with clear objectives and a timeline – was needed to address China’s trade practices. Perhaps, most poignantly, Dean Garfield, president and CEO of the Information Technology Industry Council, stated, “The U.S.-China relationship is as complex as it is important. The relationship has always been – and likely will continue to be – one of both competition and cooperation. We need to approach managing difficulties in the bilateral trade relationship with the nuance and deliberation they deserve, recognizing that both action and inaction will have consequences for years to come, in positive and negative respects.” He later added that the United States, regardless of China’s practices, must rebalance its approach to strengthening the U.S. economy because, “Regardless of whether China plays by the rules or not, it will continue to develop significant capacity for technological development, innovation, and growth. The United States must be prepared to compete.”
President Trump Announces Trade Enforcement Actions to Address China’s Unfair Practices Related to Technology Transfer and Intellectual Property
Announcing that China’s unfair trade practices in the areas of technology transfers and intellectual property result in harm to the U.S. economy of at least $50 billion per year, President Trump issued a Presidential Memorandum announcing the findings of his administration’s Section 301 investigation into these practices by the People’s Republic of China. This trade…
EU Publishes List of U.S. Products It May Target in Retaliation for Section 232 Aluminum and Steel Tariffs
The European Union (EU) has published a list of U.S. products it might target in retaliation if President Trump moves forward with tariffs on imports of steel and aluminum from the Section 232 investigations. The list is divided into two categories:
- Part A is a list of U.S. products that face immediate retaliation if the
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