USTR Finalizes China Tariff Hikes

The Office of the United States Trade Representative (USTR) announced final modifications concerning the statutory review of the tariff actions in the Section 301 investigation China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation. The tariff increases announced in May 2024 were largely adopted, with several updates to strengthen the actions to protect American businesses and workers from China’s unfair trade practices following the review of more than 1,100 comments from the public.

"China Week" in Washington

House Republicans held their highly-anticipated “China Week” by approving several China-related bills while Democrats began the week pushing for the White House to close the so- called de minimis loophole through administrative action, since Republican left the legislation off their agenda. The White House delivered that on Friday. Meanwhile Speaker Mike Johnson failed to schedule any action on the looming government shutdown due to infighting in his caucus.

Voluntary Self Disclosure Changes Codified

The Commerce Department’s Bureau of Industry and Security (BIS) issued a final rule making changes to the Export Administration Regulations (EAR) related to BIS’s policies and practices regarding voluntary self-disclosures (VSDs) and to the BIS Penalty Guidelines. The rule revises the BIS Penalty Guidelines to change how the Office of Export Enforcement (OEE) calculates the base penalty in administrative cases and how OEE applies various factors to the base penalty to determine the final penalty.

Hong Kong Business Advisory

On September 6, the U.S. Departments of State, Agriculture, Commerce, Homeland Security, and Treasury jointly released an updated warning for U.S. businesses about risks to their operations and activities in Hong Kong. Risk factors that were formerly limited to mainland China are now also a concern in Hong Kong and could affect commerce, trade, and seemingly routine individual commercial activities in Hong Kong. Many of these risks stem from the 2020 Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong SAR (National Security Law, or NSL), as well as the Safeguarding National Security Ordinance (SNS Ordinance), which was enacted in March 2024 under Article 23 of Hong Kong’s Basic Law.

Welcome to Your WTTL

The Washington Tariff and Trade Letter introduces a web-based format for easier review, research and sharing. Clicking on a story in the newsletter will now bring you to the full text on our new web site. A .pdf version of the newsletter is available below. For any questions about website access and your subscription, please contact us at Info@TradeRegs.com – Or call the Editor, Frank Ruffing, at +1.703.283.5220

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Vol 44 No. 38 September 16, 2024

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Plastics Pollution Dialogue at WTO

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On the calendar

USMCA Complaint at German-Owned Tannery

The United States has asked Mexico to review whether workers at a German-owned leatherworks supplying the automotive industry are being denied the right to freedom of association and collective bargaining.

Wells Fargo Settles Money Laundering Probe

Compliance-challenged banking behemoth Wells Fargo & Co reached a settlement with the Office of the Comptroller of the Currency (OCC) related to the bank’s anti-money laundering (AML) and sanctions risk management failures. The Formal Agreement identifies deficiencies relating to the bank’s financial crimes risk management practices and anti-money laundering internal controls in several areas including suspicious activity and currency transaction reporting, customer due diligence, and the bank’s customer identification and beneficial ownership programs. The agreement requires the bank to take comprehensive corrective actions to enhance its Bank Secrecy Act/anti-money laundering and U.S. sanctions compliance programs.

Trades Transformative Role - WTO Report

World Trade Organization Director-General Ngozi Okonjo-Iweala touted the trade’s “transformative role in reducing poverty and creating shared prosperity – contrary to the currently fashionable notion that trade institutions like the WTO, have not been good for good for poverty or for poor countries, and are creating a more unequal world.” The report outlines several major findings, emphasizing the need for a comprehensive strategy that integrates open trade with supportive domestic policies to make trade more inclusive.

GAO Report on China's Belt & Road Initiative

The U.S. Government Accountability Office (GAO) report highlights the substantial investments China is making through the world’s largest infrastructure finance program, the Belt and Road Initiative (BRI). Contributors to the report identified challenges to US competitiveness includeing the "lack of a public national strategy to guide and prioritize" U.S. efforts and the "fragmentation of foreign assistance efforts" across several federal agencies.

WTO Fisheries Deal "almost there" per Chair

The chair for the World Trade Organization’s fisheries subsidies negotiations says that members “are almost there” on concluding a deal to address subsidies that contribute to overcapacity and overfishing “before the end of the year.” But in a five-page report emailed to Heads of Delegation on Monday and seen by WTD, Chair Ambassador Einar Gunnarsson of Iceland, acknowledged that “one member is calling for a fundamentally different approach”. That one member is India.

China: US Destroying Multilateral Trade; Touts Green Industry

China has inveighed against US trade policy, calling Washington “a destroyer” to the multilateral trading system,” including the World Trade Organization - in a report on US compliance with the WTO. The 64-page report titled “2024 Report on WTO Compliance of the United States,” and issued by the Chinese commerce ministry yesterday, coincides with the ongoing WTO Public Forum that began early this week. At the Public Forum, China showcased how its rapid green transition could help address climate mitigation.

White House to Gut De Mimimis Exemption

The Biden-Harris Administration has announced a series of new actions aimed at addressing the growing abuse of the de minimis exemption, particularly by e-commerce platforms like Amazon, Shein and Temu. The administration’s efforts come in response to a significant rise in de minimis shipments, which have increased from 140 million annually to over one billion in the last decade, complicating efforts to regulate imports and block illegal goods.

Syria Shipping Update

Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an update to the March 2019 OFAC Advisory to the Maritime Petroleum Shipping Community to highlight risks associated with shipments to Syria. Amendments to this advisory include updates to certain deceptive shipping practices and risk mitigation measures, along with an updated annex of vessels currently identified as blocked property on OFAC’s SDN List, that have been involved in fuel shipments to Syria.

House China Hawks Continue Crane Refrain

Majority staff from the Homeland Security and Select China Committees released a report recapping their efforts to draw attention to the role of Chinese suppliers in U.S. Port Security. China's Shanghai Zhenhua Heavy Industry Co., Ltd. (ZPMC), the world’s largest STS crane manufacturer is an entity of particular focus of the report. Producing nearly 80% of the STS cranes used at U.S. ports ZPMC commands 70% of the global market share.