President Donald Trump wants discussions about Hong Kong protests and alleged Chinese human rights abuses included in the phase two trade negotiations with China, he told a news conference Wednesday in Davos, Switzerland, before departing from the World Economic Forum. “We are discussing that already,” said Trump. “We’d like to see if we can do something.” The Chinese Foreign Affairs Ministry didn't comment. Trump also wants to do a trade deal with the EU and thinks he can pull one off before the November election, now that the phase one deal with China is complete. The EU is “tougher to do business with than China,” he said. “We have a great relationship with China now. We had some testy moments -- very testy, beyond testy, worse than a lot of people would understand. But we got it done, and I think phase two will go nicely also.”

Stillwater Designs and Audio made “exhaustive attempts” to find contract manufacturers in the U.S. and in third countries able to source the speakers it imports from China and escape the 15 percent Section 301 List 4A tariff exposure to those products, said the vendor Tuesday in the Office of the U.S. Trade Representative public docket. It filed separate tariff exclusion requests for speakers in their enclosures imported under the 8518.21.00.00 tariff code and speakers not mounted in their enclosures sourced under the 8518.29.80.00 subheading. Stillwater did find contract manufacturers “with potential to produce these goods," but none has "the capacity nor related infrastructure to support the volume,” it said. “Because these products and the technology required for production are considered run-of-the-mill, intellectual property infringement is a non-issue,” said the vendor. “The additional tariffs on these goods imported from China do not in any way influence the Chinese government to alter or change the policies and practices identified by USTR in its Section 301 Report. These goods simply have no connection to the targeted Chinese policies and practices identified in the USTR’s Section 301 investigation.” USTR is scheduled to roll back the List 4A tariffs by half Feb. 14. Importers that land tariff exclusions can qualify for refunds of duties paid retroactive to when List 4A took effect Sept. 1.

Tech and business groups hailed Thursday’s Senate 89-10 ratification of the U.S.-Canada-Mexico Agreement. The measure awaits President Donald Trump’s signature. Canada's parliament isn't expected to ratify it until February. Mexico OK'd it in June. Senate approval is an “historic bipartisan victory for all Americans, especially manufacturers, farmers, and service providers,” said the U.S. Chamber of Commerce. The agreement’s digital trade provisions will help the future of the content industry “look brighter, particularly in Mexico,” said the Motion Picture Association. USMCA “will modernize trade among our closest trading partners and pave the way for continued prosperity across the borders of North America,” said the National Retail Federation. The agreement “will help ensure that more products researched, designed, and made in America -- including semiconductors -- can flow to customers" worldwide, said the Semiconductor Industry Association. “Businesses in all sectors rely on the free movement of data across borders, and the USMCA is a strong step towards creating international consensus on how that data should be treated,” said BSA|The Software Alliance. USMCA brings “North American commerce into the digital age with robust rules that will prove critical to the continued growth of the Internet economy,” said the Computer & Communications Industry Association. Sen. Bernie Sanders, I-Vt., (see 2001150080) joined eight Democrats, including Minority Leader Chuck Schumer, D-N.Y., to vote against USCMA. Sen. Pat Toomey, R-Pa., was the only Republican to vote no.

U.S. President Donald Trump signed the phase one trade deal Wednesday alongside Chinese Vice Premier Liu He. It's "a transformative deal" and "a sea change in international trade," Trump told a White House ceremony. It reflects "great progress on protecting intellectual property, on preventing forced technology transfer" and other measures, said Vice President Mike Pence, per a government transcript. It "signals a turning point for the U.S. tech sector," said CompTIA Executive Vice President-Advocacy Cinnamon Rogers. "This agreement will begin to address key industry concerns with China, including forced technology transfer and IP protections," said Information Technology Industry Council CEO Jason Oxman. The U.S. will reduce tariffs on about 3,800 eight-digit tariff lines from 15 percent to 7.5 percent in 30 days, when the just-signed agreement takes effect, an administration official told reporters on condition of not being identified by name.

Four Senate committees OK'd the U.S.-Mexico-Canada Agreement, clearing the way for a floor vote Thursday. Those voting no were Bernie Sanders, the Vermont independent running for president; Jack Reed, D-R.I.; and Brian Schatz, D-Hawaii. The chamber's full vote is a "key" action, said the Information Technology Industry Council Wednesday. ITI deems USMCA a "landmark improvement in our relationships with two of our most important trading partners from the perspective of the tech sector," CEO Jason Oxman wrote Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y. ITI backs HR-5430. USMCA also came up at Tuesday night's Democratic presidential contenders' debate (see 2001150057).

Treasury Department Foreign Investment Risk Review Modernization Act final regulations made several changes, without providing a further definition for “critical technologies” that industry had sought (see 1911210029). The regulations, effective Feb. 13, as expected (see 1909040029) expand authority of the Committee on Foreign Investment in the U.S. to review a broader range of foreign business dealings in the U.S. “Commenters recommended narrowing the definition and noted that the Department of Commerce, at the time of the proposed rule, had yet to define emerging and foundational technologies,” Treasury said Monday. “FIRRMA defines ‘critical technologies,’ and FIRRMA does not give the Treasury Department discretion to change this statutory definition through these regulations.” The agency won't define emerging and foundational technology, deferring to the Commerce Department. Commerce didn't comment Wednesday. Regulations got other changes based on public comments, Treasury says in Friday's Federal Register. Comments on a non-tech change are due Feb. 18. The Covington law firm outlined the changes.

France’s enactment of a digital services tax (see 1912030002) sets a “troubling precedent” because the DST “unnecessarily departs from progress towards stable, long lasting international income tax policies,” and “disproportionately impacts U.S.-headquartered companies.” So testified Sam Rizzo, Information Technology Industry Council director-policy, before a Trade Act Section 301 hearing Tuesday, according to a transcript released Friday at the Office of the U.S. Trade Representative. The tech industry worries about “an accelerating trend toward the unilateral adoption of DSTs” in other countries, said Rizzo. U.S. “policy responses” need to be “about more” than the French DST, he said. “It is about preventing the wide-scale application of targeted, unilateral taxes which stand to undermine a functioning international tax system and compromise the predictability it has afforded to companies to conduct business globally.” USTR proposed retaliatory tariffs of up to 100 percent on some French non-tech imports. Tariffs on wines "will result in a devastating revenue loss" for members of the National Association of Wine Retailers, testified Director Jeff Zacharia. Many members "anticipate that they'll have to lay off up to 25 percent of their workforce due to declines in sales revenue from tariffs on sparkling wines from France and the other tariffs in place, leading to loss of thousands of jobs," he said.

Import volume at major U.S. retail container ports is expected to return to its “usual seasonal patterns” in early 2020, after “a year of fluctuations driven by the uncertainty of the trade war with China,” said the National Retail Federation Friday. The “cycle of imports surging ahead of expected tariff increases” wasn't good for retailers “trying to manage their inventory levels or trying to make long-term business plans,” said NRF. It estimates the U.S. handled 1.67 million 20-foot-long cargo containers or their equivalents in November, down 11.2 percent from October and down 7.5 year over year, it said. “With on-again, off-again progress on trade negotiations reported throughout the fall and other factors affecting shipping, an expected surge ahead of the canceled December tariff increase did not materialize.”

Smartphones get their own subcategory and note in the 2022 edition of the harmonized system of tariffs for internationally traded goods, the World Customs Organization said Wednesday. The change for smartphones will “clarify and confirm the current heading classification of these multifunctional devices,” it said. The WCO also said “flat panel display modules will be classified as a product in their own right," simplifying "by removing the need to identify final use.”

Vizio became the first major TV brand to seek exclusions from the List 4A Section 301 tariffs on finished flat-panel sets from China, filing Tuesday for exemptions on four classifications of 8528.72.64 goods that vary by screen size. Vizio is “working closely” with its third-party original design manufacturers to shift production outside China, posted the vendor in the Office of the U.S. Trade Representative public docket. “Some of the ODMs moved manufacturing to third countries including Mexico in the late Q3 2019 timeframe.” Despite those efforts, it’s “extremely difficult” for Vizio to transfer production to other third countries, including Taiwan, Thailand and Vietnam, “without significant cost” that would “far exceed” the brand's “modest profit margin,” it said. That would “likely” result in a “significant price increase to American consumers,” it said. “Responsibly exploring alternatives to manufacturing, without sacrificing quality, safety, and the low prices that define our brand takes considerable time.” TV imports to the U.S. became a much more Mexican-centric business in October, the second full month of 15 percent tariff exposure for finished sets from China (see 1912060006). More than two-thirds of October’s TV unit imports to the U.S. came from Mexico, while China’s share plummeted to half its October 2018 level. List 4A tariffs took effect Sept. 1 at 15 percent but are due to be rolled back by half sometime after the U.S. and China sign their phase one trade deal at the White House Jan. 15 (see 1912310016).