The U.K.’s Secretary of State for International Trade, Elizabeth Truss, provided a written statement on “Free Trade Agreements with the Rest of the World” on February 6th.

She said, “…this Government has ambitious goals for British trade. We aim to secure free trade agreements with countries covering 80% of U.K. trade within the next three years. We will drive a hard bargain and, as with all negotiations, we will be prepared to walk away if that is in the national interest. Independence will allow the U.K. to become a truly Global Britain, championing free trade and showing the U.K. is a force for good.”

Truss added a key priority was to “deepen trade and investment relationships with like-minded partners, starting with the USA, Japan, Australia and New Zealand. These bilateral negotiations will also be a potential stepping-stone to joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Regarding the U.K.-USA Free Trade Agreement (FTA) the Government will be setting out negotiating objectives in due course, alongside a response to the public consultation as well as an initial economic assessment. This will be the first in a series of statements setting out our plans for FTAs with global partners.”

She added that when negotiating trade deals, the National Health Service (NHS) will not be on the table. Further, Truss said, “…we will not compromise on our high environmental protection, animal welfare and food standards.”

Finally, some of the priority areas of the U.K.-U.S. Free Trade Agreement were provided, which included:

  • Good Market Access;
  • Trade Remedies;
  • Sanitary and Phytosanitary Standards;
  • Sustainability;
  • Trade in Services;
  • Mutual Recognition if Professional Qualifications;
  • Investment;
  • SMEs;
  • Digital Trade;
  • Intellectual Property; and
  • Government Procurement.

 

 

 

In ruling NY N308565, Customs and Border Protection (CBP) determined the classification of wireless earbuds from China, the IFrogz® Airtime Premier. The earbuds are imported along with a charging case and a USB-C charging cable. The IFrogz® Airtime Premier earbuds use Bluetooth 5.0 to wirelessly connect to an audio source. They feature an integrated microphone on each earbud for hands-free phone calls and execute remote control and navigation of the source device through tap sequences on both earbuds (i.e. tap right ear bud to decrease volume, or answer phone).

CBP determined that the applicable subheading for the wireless earbuds is 8517.62.0090, HTSUS, which provides for “Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other.” The general rate of duty will be Free.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8517.62.0090, HTSUS, unless specifically excluded, are subject to an additional 15% ad valorem rate of duty. At the time of importation, 9903.88.15, in addition to subheading 8517.62.0090, HTSUS, must be reported.

New Measures for Rerouting Flights and Passengers from China

The Department of Homeland Security (DHS) announced over the weekend that to combat the spread of the Coronavirus, all flights departing after 5 pm EST on February 2, 2020 from China, and all passengers traveling from China will be routed through one of 11 U.S. airports where they will be required to make first entry and be screened:

  • John F. Kennedy International Airport (JFK), New York
  • Chicago O’Hare International Airport (ORD), Illinois
  • San Francisco International Airport (SFO), California
  • Seattle-Tacoma International Airport (SEA), Washington
  • Daniel K. Inouye International Airport (HNL), Hawaii
  • Los Angeles International Airport, (LAX), California
  • Hartsfield-Jackson Atlanta International Airport (ATL), Georgia
  • Washington-Dulles International Airport (IAD), Virginia
  • Newark Liberty International Airport (EWR), New Jersey
  • Dallas/Fort Worth International Airport (DFW), Texas
  • Detroit Metropolitan Airport (DTW), Michigan

Note that per DHS notice, the authorization for rerouting to EWR, DFW, and DTW begins February 3, 2020.

Travelers will pay no additional costs for any rerouting. Notably, flight crew, and flights carrying cargo-only are excluded from these new measures.

Screening, Quarantine Requirements Imposed; Foreign Nationals Who Visited China Will Be Denied Entry

These 11 airports will implement the administration’s recently announced Coronavirus screening and quarantine protocol, under which:

  • U.S. citizens who have been in Hubei province within 14 days of their return will be subject to up to 14 days of mandatory quarantine.
  • U.S. citizens who have been in other areas of mainland China within 14 days of their return will undergo proactive entry health screening and up to 14 days of self-quarantine with health monitoring.
  • Foreign nationals (other than immediate family of U.S. citizens, permanent residents, and flight crew) who have traveled in China within 14 days of their arrival will generally be denied entry into the U.S.

These restrictions will have immediate and wide- ranging impacts for businesses operating internationally, particularly those that rely on U.S. citizens and foreign nationals to travel to and from China and the United States. Given the fast-changing nature of this outbreak, multinational companies should continue to seek guidance from counsel to assist their employees, contractors, suppliers, and business visitors as they adjust their international business needs in accordance with applicable laws and regulations.

As concern about coronavirus – the upper-respiratory infection that was first diagnosed in humans in Wuhan, China in late 2019, and has spread to the United States in recent days – grows worldwide, employers face a series of questions regarding the impact the virus will have on the workplace.

What Must Employers Do to Maintain a Safe Workplace?

U.S.-based employers may have concerns about compliance with workplace safety laws,  including the Occupational Safety and Health Act (OSHA). Under OSHA, workers have the right to working conditions that do not pose a risk of serious harm; to receive information and training about workplace hazards; and to exercise their rights without retaliation, among others. To that end, employers should continue to monitor the development of the coronavirus and analyze whether employees could be at actual risk of exposure. Employers may refer to OSHA’s Guidance for Preparing Workplaces for an Influenza Pandemic. While not written to address coronavirus in particular, this Guidance does provide steps employers can take to address public health crises. OSHA has also aggregated its resources relating directly to coronavirus, and will continue to update its guidance as conditions evolve.

Given that employers have a legal obligation to provide a safe workplace for employees, employers should take some basic steps to help prevent the spread of disease and keep employees healthy:

  • Educating employees on the signs and symptoms of the coronavirus and the precautions that can be taken to minimize the risk of contracting the virus. At this time the CDC believes symptoms appear within two to fourteen days after exposure, with some infected individuals showing little to no signs.
  • Providing hand sanitizer and hand washing stations, flu masks and facial tissues; encouraging employees to wash hands with soap and water for at least 20 seconds; and cleaning and disinfecting frequently-touched objects and surfaces.
  • Minimizing unnecessary meetings and visitors, and assessing the risks of exposure by identifying workers who may have recently traveled to, come in direct contact with, or are scheduled to go to Wuhan City, and the Hubei Province in China.
  • Implementing and/or evaluating workplace emergency response protocols.
  • Implementing travel guidelines and procedures for approvals for travel to China.
  • Allowing sick employees to work from home or take leave as appropriate.

Does Contraction of Corona Virus Implicate the ADA?

One question facing U.S.-based employers is whether an employee who contracts coronavirus – or, for that matter, any similar communicable disease, like influenza – could be considered to have a disability under the meaning of the Americans with Disabilities Act (ADA). Generally, the answer is no. Although an argument might be made that an upper-respiratory virus like the coronavirus meets the ADA’s definition of a “disability” on the basis of its limiting of the major life function of breathing, the fact that the coronavirus is a temporary condition weakens that argument. That said, employers should take care not to make assumptions about any employee’s illness or other health condition – including refraining from making armchair diagnoses which run the risk of generating a “regarded as” claim under the ADA. The ADA permits employees to bring claims that an employer discriminated against them because the employer regarded them as having a physical or mental impairment that substantially limits a major life activity. Employers may note that the U.S. Equal Employment Opportunity Commission has issued a fact sheet on Pandemic Preparedness in the Workplace and the ADA, which provides some guidance on this issue. Employers should also consider applicable state and local laws, which may apply definitions of “disability” broader than that of the ADA.

How Should Employers Handle Travel Concerns?

As of January 27, 2020, the CDC had issued a “Level 3” health travel notice advising travelers to avoid all non-essential travel to China. On January 30, following the World Health Organization’s (WHO’s) global health emergency declaration, the U.S. State Department raised its China travel advisory to “Level 4: Do Not Travel.” In its communication, the U.S. State Department noted that “the World Health Organization has determined the rapidly spreading outbreak constitutes a Public Health Emergency of International Concern” and advised that “travelers should be prepared for travel restrictions to be put into effect with little or no advance notice.”  Employers should consider whether to limit business travel to affected areas at this time and provide reasonable accommodations such as video conferencing during the duration of the threat and heightened risk.

Many large global employers have put a complete suspension on travel to China, or implemented policies which would require senior management approval for any such travel that would be considered essential. Employers would be wise to be particularly sensitive to requests from employees whose health is vulnerable, including employees with immunodeficiencies and those who are older or pregnant. Employers should also monitor travel alerts issued by the U.S. State Department, which provides objective guidance about the level of danger posed by travel to specific areas. Indeed, at this time, commercial carriers have reduced or suspended routes to and from China.

To the extent employers have employees who have recently traveled to China, and to the Wuhan area in particular, employers can consider asking the returning employees to work from home and/or place them on paid leave to ensure they are not bringing the virus into the workplace. Any such approach should take into account the recency of the travel, the areas to which the employee traveled, and the employee’s current condition. In short, employers should consider the facts and circumstances of each situation and make decisions that protect against the potential spread of the virus but also account for employee rights.

Employers with employees in China should continue to work closely with their employees and be mindful of the local regulations being implemented for safety precautions. The State Council in China issued a Circular on January 27 under which the public holiday of the Chinese New Year will be extended to February 2 (Sunday) and all employees will start to return to work on February 3 (Monday). Following this announcement, several local governments issued local rules to further extend the start date for all companies to open offices locally (i.e., February 9th). Employers should be mindful of the continued updates and communicate closely with their employees in China.

Employers in the U.S. and elsewhere are wise to remain sensitive to employee concerns and accommodate them to the extent reasonable. They should avoid assuming that any given employee would opt out of travel, e.g. passing over a pregnant employee who may in fact want to take an opportunity which would require travel, as doing so could give rise to an accusation of disparate treatment. And, to the extent possible, employers should not pressure employees into traveling; disciplining an employee for refusing to travel to Asia may not directly give rise to an actionable claim, but would negatively impact workplace morale.

What Else Should Employers Keep In Mind?

The number of new coronavirus cases is small, and employers should not overreact to any threat it poses. Many employers can likely continue to operate largely as normal; those with significant employee travel or employee interchange in Asia should continue to take steps that are appropriate in light of all circumstances and updates issued by the State Department and the WHO.

Coronavirus impacts persons of all ethnicities; singling out employees because of their ethnicity for testing, leave, or other virus-related actions could lead to discrimination charges. All policies should be enforced in a uniform and consistent way. Within China, as the quarantine measures are now conducted by the local governments, any employees who are ordered to be quarantined by the local government (including patients, suspected patients and individuals who are categorized as close contacts), should not have their pay impacted by the fact that they cannot perform work during the special period due to the quarantine measures. Employers should continue to check updated local rules in China for further information as different local governments in China may have different local rules regarding employee benefits and pay practices during the extended period after February 3rd – the official date published by the State Council for employees to return to work.

U.S.-based employers should not administer any medical tests for workers, unless they are otherwise a job-related necessity, because insisting upon such tests may violate the ADA. U.S. employers operating abroad should consult applicable laws and regulations regarding medical testing in other countries. However, employers should reinforce sick leave policies and encourage employees to stay home if they are feeling ill, to the extent feasible. And, employers should not offer medical opinions or propagate information about the virus that does not come from a reliable government source. As this situation continues to evolve, employers should continue to seek guidance from counsel.

Chinese law requires companies to accurately classify and declare goods imported into or exported out of China under its version of the Harmonized System (HS). Importers and exporters who fail to properly classify products may be e subject to criminal or civil penalties. Tariff misclassification in China has become a flashpoint for multinational companies due to uncertainty caused by the convergence of the following events:

US-China Trade War: Over the past year, the US and the People’s Republic of China (PRC) have imposed substantial, retaliatory tariffs on goods coming from each country. Tariff classification is critical in determining whether affected products fall within the tariff lists issued by the two countries.. Many multinational companies have been re-examining the HS codes of their products in an effort to assess whether there are opportunities to mitigate the impact of the tariffs resulting from the trade war. In some cases, this has resulted in the declaration of different HS codes for the same product – which can be flagged by the customs authorities of either country. Multinational companies need to be prepared for inquiries or investigations from China Customs and have a strategy to mitigate potential penalties.

China Customs Reform: The General Administration of Customs of the PRC (“China Customs”) implemented a series of trade facilitation reforms over the past few years. For example, prior to the reforms, China Customs would verify the HS code declared by the importer before subject goods were released. After the reforms, China Customs stopped conducting such verifications, which effectively shifts the burden to the importer to ensure that the goods are correctly classified. Thus, the release of goods by China Customs does not mean that China Customs views the corresponding tariff classification declarations as accurate. China Customs may initiate a post-clearance audit on tariff declarations anytime up to three years after release of the corresponding goods. China’s trade facilitation reforms in this area may actually increase noncompliance risk for importers. Without shipment-by-shipment verification by China Customs at clearance and release of goods, a relatively minor mistake could result in severe consequences for companies.

Restructuring of China Customs: The merger of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) into China Customs, and the subsequent rotation of officers between the two agencies, has created an uneven level of expertise in handling issues such as tariff classification across the combined agency. The differing levels of experience and expertise of China Customs officers are bringing more uncertainty, risks and challenges for multinational companies.

Generally, China Customs’ initial approach to tariff classification is to determine whether an imported product satisfies the explicit provisions of the PRC tariff classification rules. If the product classification is not consistent with the classification rules, China Customs deems the classification to be a regulatory violation. Generally, the explicit classification rules cover the following circumstances:

  1. The product in question is expressly described in the headings or subheadings or the explanatory notes to the sections, chapters or (sub)headings of the PRC Tariff Schedule.
  2. The product in question is a commodity specifically provided for in the Explanatory Notes to Headings of the PRC Tariff Schedule.
  3. The product in question is identical to a commodity as described in the Explanatory Notes to Subheadings of the PRC Tariff Schedule.
  4. The product in question is identical to those which have been covered in the classification rulings or decisions issued by China Customs.
  5. There is evidence showing that China Customs has made a pre-classification ruling or decision on the product and has sent such ruling or decision to the company engaged in the import or export activity.

Where a misclassification constitutes a regulatory violation, the violating company may be subject to confiscation of illegal gains (if any) plus a fine ranging from 30% to 200% of the underpaid import taxes. An intentional misclassification may expose the violating company to a smuggling charge, which is a criminal offense.

A misclassification would not be deemed as a regulatory violation (and thus no penalty would be imposed) if the misclassification does not fall within any of the above circumstances, and meets any of the following requirements:

  1. The misclassification arose from an incorrect pre-classification ruling issued by China Customs.
  2. The product in question has been substantively reviewed by China Customs in the past, but the HS code declared by the company has never been challenged by China Customs. Substantive review includes laboratory testing, physical inspection, or a request for the company to file a supplementary declaration or revised declaration of HS code.
  3. The classification of the product in question is technically difficult and has been submitted to GAC’s Technical Committee on Tariff Classification for its review.

For companies involved in exporting components and parts or newly developed products, it is essential to develop an in-depth understanding of Chinese tariff classification issues, including effective communications with China Customs. Strategic legal and operational perspectives are essential in determining the HS codes and duty rates applicable to products in the current international trade environment, particularly given the possible civil and criminal liability.

From a compliance perspective, multinational companies should seek pre-classification rulings from China Customs for their most significant products as well as actively monitor changes to the Subheadings and Headings of the Explanatory Notes of the PRC Tariff Schedule.

In ruling NY N308615, Customs and Border Protection determined the classification of face/facial sheet masks from China. The first item is described as a “Radiant Glow Face Mask”. It is a liquid preparation packaged for retail sale in a 20ml pouch. The user is directed to apply the preparation in a thin layer to a cleansed face, leave on for up to 20 minutes, then rinse. The remaining items are three facial sheet masks: a “Brightening Facial Sheet Mask”, a “Hydrating Facial Sheet Mask”, and a “Purifying Facial Sheet Mask,” all packaged for retail sale in 20ml pouches. The sheet masks are white paper masks with cutouts for the eyes, nose and mouth, saturated in a liquid preparation. The user is directed to press the mask into cleansed skin, around edges of the nose, and the cheeks, leave on up to 20 minutes, remove the mask and discard.

CBP determined that the applicable subheading for the four Face/Facial sheet masks will be 3304.99.5000, HTSUS, which provides for Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or sun tan preparations; manicure or pedicure preparations: Other: Other: Other. The rate of duty will be free.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3304.99.5000, HTSUS, unless specifically excluded, are subject to an additional 25% ad valorem rate of duty. At the time of importation, the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 3304.99.5000, HTSUS, must be reported.r

Crowell & Moring has released Litigation Forecast 2020: What Corporate Counsel Need to Know for the Coming Year. The eighth-annual Forecast provides forward-looking insights from leading Crowell & Moring lawyers to help legal departments anticipate and respond to challenges that might arise in the year ahead.

For 2020, the Forecast focuses on how the digital revolution is giving rise to new litigation risks, and it explores trends in employment non-competes, the future of stare decisis, the role of smartphones in investigations and litigation, and more.

The story focusing on international trade, “Importing: Risky Business,” focuses on how for companies that import goods into the U.S., new, expansive tariffs have made business much more complicated and expensive — and have increased risk from a legal standpoint.

Be sure to follow the conversation on Twitter with #LitigationForecast.

In ruling NY N308621, Customs and Border Protection (CBP) determined the classification of Balenciaga’s Speed Footwear (Style numbers 530349 W05G0 1000 and 560235 W1HP0 1000). The products are closed toe/closed heel, above-the-ankle, slip-on footwear with outer soles of rubber or plastic materials. The sock-type uppers are composed of knitted textile materials. Both styles feature foxing-like bands applied to and molded at the soles and overlapping the uppers ¼ of inch or more. The foxing-like bands cover 73 percent of the circumference of the shoes. Style #530349 W05G0 1000 has an F.O.B. value of $193 per pair. Style # 560235 W1HP0 1000 has non-functional decorative laces and an F.O.B. value of more than $15/pair.

CBP determined that the applicable subheading for the referenced items is 6404.19.9030, HTSUS, which provides for footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials: footwear with outer soles of rubber or plastics: other: other: valued over $12/pair: for men. The rate of duty will be 9% ad valorem.

With regard to the applicable rate of duty, the men’s Balenciaga’s Speed Footwear Style 530349 W05G0 1000 and 560235 W1HP0 1000 are also provided for in subheading 9902.14.49, HTSUS, which provides for footwear for men, valued over $24/pair, covering the ankle but not covering the knee, with outer soles of rubber or plastics and uppers of textile materials (provided for in subheading 6404.19.90). This subheading provides for a temporary reduction in the rate of duty for the subject footwear if it meets the prerequisites of this tariff provision. Accordingly, the footwear is entitled to beneficial treatment under HTSUS subheading 9902.14.49. The rate of duty is 8.1% ad valorem.

Our retail multinational clients often ask if there is an effective way of protecting intellectual property rights (IPR) in China. While traditional enforcement remedies in China have been ineffective in the past, customs border protection schemes in recent years have provided a cost effective tool to protect the IPR of brand owners in the retail industry.

There are generally two customs IPR border protection schemes available in China: (i) the ex-officio or active protection scheme, and (ii) the passive protection scheme.

The precondition for active protection from China Customs is recording the IPR with the General Administration of Customs of China (GACC). Potential advantages for brand owners include the customs authorities monitoring for suspicious activities, inspecting import and export shipments, and working with the brand owners to identify infringing goods. If a specific shipment of goods is suspected of infringing a recorded IPR, China Customs has the ability to suspend the clearance of the goods, detain the goods upon the request of the brand owner after posting a deposit, and investigate the suspected infringement. If infringement cannot be determined, the brand owner can still pursue the case in court.

If a brand owner has not yet actively registered its IPR with the GACC, the passive protection scheme would apply. China Customs generally would not initiate an investigation on the detained shipments in the passive protection scheme. However, a brand owner may request the customs authority to detain a suspected shipment by providing evidence to prove the existence of infringement and a deposit equivalent to the value of the goods. The brand owner would then need to file a lawsuit in court within 20 working days or the customs authority would release the goods.

Around 50,000 valid IPR registrations have been recorded with the GACC up to September 2019. China Customs took over 49,700 border protection measures in 2018, resulting in seizures of over 47,200 shipments of goods suspected of IPR infringement. In 2018, 97% of the seizures were based on customs’ ex-officio actions, while only around 3% was initiated by brand owners under passive protection scheme.

Registration of IPR with GACC is FREE since 2015, so a brand owner has no reason not to register. To make customs IPR protection even more effective, a brand owner should maintain close contact with China Customs and offer product identification training sessions to customs officials located at ports where infringing products are most likely to enter or exit China. The more awareness a brand owner can bring to its products and potential infringement, the more effective border enforcement actions will be.

Today President Trump and Chinese Vice Premier Liu He signed a “Phase One” trade agreement, the first formal text agreement between the two sides since the United States initiated the Section 301 investigation in August 2017, which has since led to mounting U.S. and Chinese tariffs affecting bilateral trade.

The agreement does not specifically address any tariffs currently in place. Instead, it includes pledges by China to increase U.S. exports of certain goods by specified amounts above 2017 baselines by 2020 and 2021, along with commitments in the areas of intellectual property, technology transfer, agriculture (including agricultural biotechnology), financial services, and currency and foreign exchange. The agreement also includes a mechanism for bilateral consultation and enforcement.

Existing tariffs: While the Phase One trade agreement forestalled tariffs set to begin in December 2019 when it was first announced, the text of the Phase One trade agreement released today does not directly address U.S. or Chinese tariffs in place as a result of the trade dispute.

In December 2019, President Trump announced that 15% tariffs on $110 billion in imports would be cut to 7.5%. Beyond that, neither the U.S. nor China has pledged to cut additional existing tariffs. U.S. Treasury Secretary Steve Mnuchin and U.S. Trade Representative (USTR) Robert Lighthizer issued a joint statement on January 14 that “there is no agreement for further reduction in tariffs” at this time, which means that $370 billion in Chinese imports will continue to be subject to U.S. tariffs.

Expanding trade: China has pledged that it will increase import levels for some goods and services by specified amounts above 2017 import levels over a two-year period ending in 2021:

  • Certain manufactured goods, including autos, aircraft, electronics, some pharmaceutical products, and industrial machinery: Increase of $32.9 billion by 2020 and $44.8 billion by 2021;
  • Agricultural goods, including soybeans, meat, seafood, grains, and cotton: Increase of $12.5 billion in 2020 and $19.5 billion in 2021;
  • Energy products, including liquefied natural gas, crude oil, and coal: Increase of $18.5 billion in 2020 and $33.9 billion in 2021; and
  • Services, including financial services, travel, telecommunications, and information services: Increase of $12.8 billion in 2020 and $25.1 billion in 2021.

The agreement does not specify how China will increase import levels, leaving open questions as to whether China will increase state-ordered imports of certain commodities or encourage private sector imports through trade liberalization (or a combination of both). For U.S. companies in these sectors, there may be opportunities to demonstrate to U.S. and Chinese policymakers how they can help China meet these commitments through increased exports.

Intellectual property: China has agreed to commitments strengthening protections for trade secrets (including from misappropriation via cyber intrusions), combatting online piracy, enhancing patent protections for pharmaceuticals, improving trademark and copyright enforcement, and preventing manufacture and export of pirated or counterfeit goods, including unlicensed use of software.

Technology transfer: China has agreed that it will not support or direct outbound foreign investment aimed at acquiring foreign technology, and that it will refrain from pressuring (formally or informally) U.S. entities to transfer technology through administrative or licensing requirements or as a condition of market access.

Agriculture: China has agreed to commitments related to sanitary and phytosanitary approvals for a range of agricultural imports, including dairy, infant formula, meat, grains, pet food, and biotechnology products.

Financial services: China has agreed to commitments relaxing controls and enhancing approval systems for U.S. financial services companies operating in China, including the removal of foreign equity limits for the insurance, securities and fund management, and futures sectors.

Macroeconomic policies and exchange rate: Both sides committed to make public disclosures of foreign exchange reserve and balance of payments data, and avoid competitive currency devaluations and manipulation of exchange rates.

Enforcement: On enforcement, the Phase One Agreement establishes new bilateral consultative bodies to discuss implementation of the agreement, including:

  • A “Trade Framework Group” chaired by the U.S. Trade Representative and a Chinese Vice Premiere, for semiannual, high-level consultation on the status of the agreement’s implementation;
  • A “Bilateral Evaluation and Dispute Resolution Office” within each government, led by a Deputy U.S. Trade Representative and a Chinese Vice Minister respectively, that will meet quarterly to assess specific issues and complaints; and
  • A re-established bilateral macroeconomic dialogue, led by the U.S. Secretary of the Treasury and a designated Chinese Vice Premier, that will meet “regularly.”

The Trump Administration has stated that it will enter into negotiations for a “Phase Two” agreement, seeking to address issues not covered in Phase One.

Further information on U.S. and Chinese tariffs currently in place can be found here