The Commerce Department is considering several expanded restrictions on foreign shipments to Huawei of items containing U.S. technology (see 1911070026), said Rich Ashooh, assistant secretary-export administration. The department is discussing expanding the direct product rule that subjects certain foreign-made products containing U.S. technology to American regulations, and a broadened de minimis rule, he told a Regulations and Procedures Technical Advisory Committee meeting. Ten associations wrote Secretary Wilbur Ross last week that the potential changes “could negatively impact a wide range of commercial transactions” that don't have national security implications. BSA|The Software Alliance, CompTIA, the Information Technology Industry Council, the Semiconductor Industry Association, the Software & Information Industry Association and others said the department proposals would encourage “design-out of U.S. technology by non-U.S. firms, while also imposing massive new compliance burdens for U.S. and non-U.S. companies alike." Ashooh said Tuesday any potential rule changes would likely be subject to public comment, under the Export Control Reform Act. “The default is to go seek the public support,” he said.

The U.S. Chamber of Commerce is “seriously disappointed” intellectual property protections on “biologics” were removed from the U.S.-Mexico-Canada Agreement compromise deal between House Democrats and the Office of the U.S. Trade Representative (see 1912100022), said CEO Thomas Donohue Wednesday. Removing the protections “was based on the false assumption that these provisions would raise U.S. drug prices,” said Donohue. “In fact, the original biologics provision would have resulted in more funding for innovative medical research with no additional cost to U.S. consumers.” The Chamber will continue working for USMCA’s “expeditious passage” in Congress but thinks “the outcome in the area of intellectual property cannot stand as a precedent for future agreements,” he said. Donohue immediately praised the compromise deal when it came out Tuesday, but said the Chamber would need to review the details and their impact with members.

World Trade Organization members extended a moratorium on customs duties on data transfers. Renewed at every opportunity since 1998, it remains at least until the WTO’s conference in June. Members also agreed Tuesday “to continue work under the existing 1998 work programme on e-commerce in the beginning part of 2020,” the body said. The International Chamber of Commerce said the actions underscore the continued importance of the body, despite no functioning dispute settlement mechanism due to appellate vacancies. "The shutdown of the Appellate Body is, without doubt, a blow -- but we shouldn’t slip into exaggerated claims about the imminent death of the WTO. ... WTO committees will continue the essential daily work of resolving trade frictions, while new rule making -- in areas such as services, investment and e-commerce -- is advancing at a rate not seen for over a decade,” said ICC Secretary General John Denton.

Fossil Group seeks exclusions from the 15 percent List 4A Section 301 tariffs it has paid on seven classifications of traditional-watch parts it imports from China since the duties on those goods took effect Sept. 1, said postings Monday in the U.S. Trade Representative’s public docket. It requested exemptions on four classifications of watch straps imported under the 9102.11.10.30, 9102.11.25.30, 9102.11.30.30 and 9102.11.45.30 tariff subheadings, plus three on the watch cases it imports under the 9102.11.10.20, 9102.11.30.20 and 9102.11.45.20 classifications, said the postings. As with the exemption it sought Friday on the finished watches it sources from China (see 1912060062), Fossil said it uses a factory in India to supply the watch parts to the local market there, but the facility doesn’t have the capacity to service the company’s global needs. Fossil also is “not aware of any facility in the U.S. that can meet its needs for capacity, supply chain logistics, pricing, quality control and timely delivery of its traditional watch products to the standards it currently achieves in its supply chain,” it said in each of the postings.

Retail imports through the major U.S. container ports “bumped up significantly” in November as retailers imported merchandise ahead of the 15 percent Section 301 List 4B tariffs set to take effect Sunday, said the National Retail Federation Monday. “At this point, holiday merchandise is already in the country, so the direct impact of new tariffs won’t be seen until the season is over,” said NRF. Tariffs are bad for “consumer and business confidence,” it said, urging the Trump administration to cancel or postpone List 4B “as a sign of good faith.” The U.S. needs a trade deal with China “as soon as possible so we can bring an end to the trade war that has put a drag on the U.S. economy for far too long,” it said. The White House didn’t comment. NRF estimates U.S. ports handled 1.88 million 20-foot-long cargo containers, but that November imports jumped to an estimated 1.95 million, an 8 percent increase from November 2018, and the highest volume since August.

Fossil Group filed for an exemption to the 15 percent List 4A Section 301 tariffs it has paid since Sept. 1 on the traditional watches it imports from China under the 9102.11.25.20 subheading, said a Friday posting in the U.S. Trade Representative’s public docket. “Fossil continues to look for ways to diversify its sourcing for traditional watches,” said the vendor. It recently invested in a factory in India that has “capacity to address our product needs” for the local market, but can’t “address our product needs in the global markets,” it said. “Watch manufacturing is a highly specialized skill which cannot be readily duplicated.” Moving traditional watch manufacturing out of China “is not feasible at this time, especially in the very challenging market for traditional watches that Fossil has been experiencing over the last couple of years,” it said. Movado shares recently plunged after the CEO blamed the success of the Apple Watch for the demise of the traditional watch business (see 1911260063). The exemption request doesn’t include Fossil smartwatch imports, which also have List 4A exposure. Fitbit filed Oct. 31 for a tariff exemption on the smartwatches and fitness trackers it imports under the 8517.62.00.90 subheading. Under USTR rules, any tariff exemption granted goes to all goods imported under the product subheading, not to the company submitting the exclusion request.

President Donald Trump has “no deadline” for striking a trade deal with China, he told reporters Tuesday during a meeting in London with NATO Secretary General Jens Stoltenberg. “I like the idea of waiting until after the election for the China deal.” The Chinese “want to make a deal now, and we’ll see whether or not the deal’s going to be right,” he said. “It’s got to be right.” A trade agreement is “dependent on one thing -- do I want to make it?” Trump said. “We’re doing very well with China right now. We can do even better with the flick of a pen.” China didn’t comment. Trump previously suggested Chinese negotiators would drag their feet in the trade talks in hopes of landing a more favorable deal under a possible Democratic administration. But the Chinese understand that “waiting out” Trump’s term “is not an option,” said Myron Brilliant, the top global relations point man at the U.S. Chamber of Commerce, in October (see 1910100029). Extending the U.S.-China trade war for another year past the 2020 election would be a “bad deal” for “every segment of the economy,” said David French, senior vice president-government relations at the National Retail Federation, virtually the only group to comment Tuesday on Trump's remarks. “We want and need to see a deal as soon as possible,” said French. Four rounds of Section 301 tariffs on Chinese goods at 15 percent and higher “continue to hurt U.S. businesses, workers and consumers and are a substantial drag on the U.S. economy,” he said.

Jasco Products didn’t conceal its anger in seeking exclusions from the 15 percent List 4A Section 301 tariffs it pays on the plastic AC outlet safety covers and seven other classifications of tech accessories it imports from China. Jasco is “being forced by its own federal government to undergo a worldwide scouting expedition” for alternative sourcing, “and is actively evaluating several dozen suppliers outside of China,” said the supplier in each of its eight exclusion requests posted Monday in the Office of U.S. Trade Representative’s public docket. Finding alternative sourcing “will take years and tens of millions of dollars along with extensive business disruption due to the time and resource commitment involved,” said Jasco. “It takes time to identify potential suppliers and perform audits to ensure that the factories meet Jasco’s rigorous standards for quality, safety, labor conditions, and environmental protections.” Even if Jasco “qualifies viable factories,” it will take “tens of millions of dollars redeveloping existing products since tools and molds cannot easily be transferred between factories in different countries,” it said. Landing U.S. regulatory approvals for the redesigned goods also will be “time consuming and costly,” it said. The Trump administration “is essentially requiring Jasco to waste tens of millions of dollars redeveloping existing products Jasco already sells with no discernable return on investment at the expense of developing new innovative products to drive future growth,” it said. Jasco’s effort to shift sourcing outside China “all presupposes that these factories have readily available capacity they are not already utilizing for their existing customers,” said the company. “These factories will need to expand their operations significantly to support the volume from Jasco and other companies working to avoid Chinese tariffs which will take years.” USTR didn’t comment.

A U.S. foundation representing organizations in the semiconductor technology sector will move to Switzerland due to concerns over U.S. trade restrictions, according to a Nov. 25 Reuters report. RISC-V Foundation, a nonprofit, said it has not yet faced restrictions but is “concerned about possible geopolitical disruption,” according to Reuters. The move comes as the Commerce Department restricts sales to certain Chinese technology companies and prepares to release proposed restrictions on emerging and foundational technologies. A spokesperson for RISC-V declined to answer questions but referred to a message on the foundation’s website that says the move “has the effect of calming concerns of political disruption to the open collaboration model.” The company stressed that it does not have any commercial interest in the goods that may be restricted and there have “not been any export restrictions on the Foundation in the U.S.” A Commerce Department spokesperson said its export controls are designed to “ensure bad actors cannot acquire technology that harms U.S. citizens or interests, while promoting innovation to fuel continued American technological leadership.” Commerce “meets regularly” with industry members for input, the spokesperson said, including on “technological developments, market conditions and the effects of its regulations.”

Laser phosphor displays (LPDs) that Prysm imports for integrating into display wall systems are classifiable as finished monitors, and not parts of monitors, ruled the Court of International Trade Tuesday. The LDPs can’t be considered parts of a larger whole because there's no uniform configuration of which a single LDP can be considered a part, the court found, siding with Customs and Border Protection. CBP classified the LDPs Prysm imported in 2016 as color monitors and assessed 5 percent duties on them. Prysm protested, arguing the LDPs should have been treated as duty-free parts. The court disagreed, deciding a proprietary image processor receives the input video source and can control up to 30 LPDs. Even a single LPD is capable of displaying an image, rendering it a monitor under Harmonized Tariff Schedule definitions, it said. Prysm didn't comment.