Cable modems that include Chinese parts but are assembled in Mexico are subject to the third tranche of 10 percent Trade Act Section 301 tariffs on Chinese imports, said Customs and Border Protection in a Nov. 27 ruling. The ruling request was submitted by Barnes Richardson lawyer Lawrence Friedman on behalf of Zoom Telephonics. CBP's analysis was on two types of modems -- those that include Wi-Fi gateways and those that don’t. All the components involved are products of China and "bulk-packed board assemblies will be shipped in separate boxes from the remainder of the components including the case components, feet, screws, and labels," CBP said. The assembly work done in Mexico doesn't constitute a "substantial transformation" of the Chinese components, CBP said. The modems are classifiable under subheading 8517.62.0010 and therefore subject to the tariffs imposed Sept. 24, it said. The modems meet the North American Free Trade Agreement’s tariff shift requirement and are a product of Mexico for marking purposes, CBP said.

October imports at major U.S. retail ports exceeded 2 million containers in a single month for the first time as retailers continued to rush merchandise into the country ahead of the now-postponed Jan.1 increase in Section 301 tariffs on goods from China, said the National Retail Federation Friday. President Donald Trump “declared a temporary truce in the trade war” when he put a 90-day hold on hiking the 10 percent tariffs to 25 percent (see 1812030002), but “these imports came in before that announcement was made,” said NRF. “We hope that the temporary stand-down becomes permanent, but in the meantime there has been a rush to bring merchandise in before existing tariffs go up or new ones can be imposed.” U.S. ports handled 2.04 million 20-foot containers or their equivalents in October, the latest month for which after-the-fact numbers are available, said NRF. That was up 9 percent from September and up 13.6 percent year-over-year, it said. The previous single-month record, 1.9 million containers, was set in July, it said. NRF estimates ports handled 2.01 million containers in November, a 14 percent year-over-year increase. It forecasts 21.8 million containers will be handled in 2018, a 6.5 percent increase from the record 20.5 million handled in 2017. It sees a “significant slowdown” in 2019 import growth “as the market adjusts to higher prices due to the Trump tariffs and the impact on consumer and industry confidence going forward.”

"I am a Tariff Man," tweeted President Donald Trump Tuesday, three days after postponing hiking to 25 percent the third round of Section 301 duties, giving U.S. and Chinese negotiators 90 days to work out a comprehensive trade deal (see 1812030002). "When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so," tweeted Trump. "It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN." Negotiations with China "have already started," he tweeted. "Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina," he said about Chinese President Xi Jinping.

Any U.S.-Japan trade agreement should “prohibit” customs duties on digital products and electronic transmissions, commented the Information Technology Industry Council in docket USTR-2018-0034. The Office of the U.S. Trade Representative sought feedback to help shape the Trump administration’s negotiating posture (see 1811270002). It’s “tempting” for governments to consider levying duties or other “blanket fees” on digital goods and services, said ITI. Banning those “unnecessary” costs will eliminate burdens on digital trade and “serve as a vital model for future U.S. trade agreements" everywhere, it said. ITI wants the USTR to use negotiations with Japan to promote joint "cybersecurity cooperation efforts,” and “both countries should affirm that risk-based, consensus-driven, and interoperable cybersecurity approaches are more effective at combatting digital threats than prescriptive, mandatory, and sometimes conflicting regulatory regimes that are emerging" worldwide. ITI also urges the USTR to seek commitments from Japan to allow into the country for testing and demo purposes tech devices that don't yet have regulatory authorization, it said. "Currently, Japan does not allow for the importation of any devices that do not hold regulatory authorizations for these purposes. Adoption of measures similar to FCC provisions allowing imports of products for testing or demonstration will give U.S. firms equal opportunities in Japan’s market."

Better protecting U.S. intellectual property rights should be a high priority in negotiating a new trade agreement with Japan, tech groups urged the Office of the U.S. Trade Representative in comments posted this month in docket USTR-2018-0034. USTR sought comment in late October to develop U.S. negotiating positions with the aim of addressing “both tariff and non-tariff barriers and to achieve fairer, more balanced trade.” A “flexible” and “balanced” IP “regime” is critical “for the continued growth of the digital economy,” said the Computer & Communications Industry Association. A U.S.-Japan free trade agreement “should reflect the two trading partners’ commitments to preserving limitations and exceptions in copyright law needed to further innovation,” said CCIA. U.S. trade policy “has long reflected domestic copyright principles by including necessary intermediary protections for online services in trade agreements dating back to 2003,” it said. The “single most important part” of the semiconductor manufacturing industry is its IP, said SEMI, the industry’s top supply-chain trade group. Continued technological development “requires significant resource commitments, and as such, strong global intellectual property protections are a top priority,” it said. “The ability to leverage this intellectual property means that companies in this industry can engage in trade and reinvest revenue into research.” SEMI strongly supports efforts to better protect IP, “and encourages greater enforcement of trade and investment rules,” it said. A Semiconductor Industry Association top negotiating priority is a U.S.-Japan trade deal that ensures access to encryption products, said SIA. “We recommend that all U.S. trade agreements contain specific commitments preventing parties from placing discriminatory restrictions on commercial foreign products with encryption,” said SIA. It also wants a trade agreement that bolsters protections of trade secrets, which remain “extremely vulnerable, especially in jurisdictions with weak laws and/or enforcement practices," it said. SIA warned about "misappropriation of trade secrets enabled or encouraged" by government industrial policy. Comments were due by midnight Monday. The U.S. Office of the Intellectual Property Enforcement Coordinator received comments last week as it looks to put together its next three-year joint strategic plan (see 1811260014).

“Macro uncertainty,” rather than actual changes in buying behavior, characterizes the market mood as companies brace for the Trade Act Section 301 tariffs on Chinese imports to rise to 25 percent on Jan. 1, said Analog Devices CEO Vincent Roche on a Tuesday earnings call. “I’ve talked with quite a few customers” over the past two quarters, and most are “remaining optimistic, though there is obviously concern, which is dampening enthusiasm” for capital expenditures, said Roche. Though cancellations and lead times “for the most part are pretty normal,” there are “pockets of softness” throughout the market, he said. “I don’t get any sense that there’s any form of tension or panic-buying” to beat the higher tariffs, he said.

Import freight costs remained “elevated” in November, mainly in reaction to the Trade Act Section 301 tariffs on Chinese goods, reported IHS Markit Wednesday. “Over the summer, carriers cut capacity on trans-Pacific and Asia-European routes just as demand ramped up quickly and unexpectedly,” said IHS. The announcement of U.S. tariffs on Chinese goods caused importers to “rush in” shipments ahead of the implementation date, “resulting in the peak shipping season moving up one month to July rather than August,” it said. “Since then, volumes have retreated and carriers are keeping additional capacity available through the end of the year to accommodate any uptick in demand” associated with the tariff rates increasing to 25 percent from 10 percent on Jan. 1, it said.

The FCC should help Canada resolve concerns with equipment standards for electromagnetic interference, the National Electrical Manufacturers Association commented to Office of Management and Budget's Office of Information and Regulatory Affairs, for the U.S.-Canada Regulatory Cooperation Council that aims to reduce intercountry regulatory differences. NEMA said earlier this month that Innovation, Science and Economic Development Canada’s Engineering, Planning and Standards Branch proposed revisions to Canada's equipment standards in April that would "create trade barriers and fracture the U.S.-Canada market for many products, including wall mounted lighting dimmers." NEMA recommended the FCC "assist ISED Canada in addressing equipment EMI concerns" and "the agencies develop a common approach that achieves EMI mitigation objectives while minimizing regulatory burden and preventing barriers to trade." The Association of Home Appliance Manufacturers made similar recommendations.

Most stakeholders support the proposed United States-Mexico-Canada Agreement in allowing individual countries to set privacy laws while promoting Asia-Pacific Economic Cooperation privacy rules, Wiley Rein international trade attorney Stephen Claeys blogged Thursday. USMCA goes “farther than those in the Trans-Pacific Partnership agreement in requiring data protection and promoting compatibility.”

Imports at major U.S. retail container ports slowed in September from their “pre-holiday peak,” but stayed at “unusually high levels” as retailers continue bringing in merchandise before the Trade Act Section 301 tariffs increase to 25 percent in January, said the National Retail Federation Friday. Retailers know that tariffs “are set to more than double in just a few weeks,” said NRF. “If there are shipments that can be moved up, it makes sense to do that before the price goes up.” Imports customarily drop off “significantly by this time of year, but we’re still seeing numbers that could have set records in the past,” said NRF. U.S. retail ports handled 1.87 million 20-foot containers or their equivalents in September, down 1.3 percent sequentially from August, but up 4.6 percent year-over-year, it said.