The U.S.-Mexico-Canada Agreement on free trade “would strengthen U.S. technological and trade leadership, and advance U.S. firms’ ability to grow platforms and services that enable engagement with the Internet and the digital economy,” wrote CTA, the Information Technology Industry Council, Internet Association and nine other tech groups Sunday to House Ways and Means and Senate Finance Committee leadership, urging USMCA approval. “As Congress considers the many important provisions in the USMCA, we urge lawmakers to take into account the significance of the digital trade rules on the U.S. economy and vote to adopt,” they said. “Passing the USMCA quickly is a critical opportunity to shape global trade rules.” When the North American Free Trade Agreement was implemented 25 years ago, “there were no digital provisions,” they said. “Today, the U.S. tech industry is facing a number of challenges from foreign governments seeking to displace U.S. technology leadership. American companies are especially under threat from discriminatory policies, market-distorting industrial policies, and inadequate intellectual property protection and enforcement in China.”

Keeping in place permanently the temporary “tariff suspensions” on flat panels and assemblies that Element Electronics imports from China is “vital” to the workers who assemble finished LCD TVs in South Carolina, Element commented (login required) Tuesday in International Trade Commission docket 332-565. The 4.5 percent duties on LCD TV components Element sources under the 9013.80.90 and 8529.90.13 tariff lines were temporarily suspended in the Miscellaneous Tariff Bill (MTB) Act that President Donald Trump signed into law Sept. 13 to promote U.S. production at companies that rely on small-volume imports. Element's comments were part of the review process for an ITC report to Congress due within year after the MTB's enactment summarizing the legislation’s impact to the U.S. economy. “Tariff inversion” in the U.S. TV sector “incentivizes production abroad,” said Element. The 4.5 percent duties put Element at a significant cost disadvantage to finished TVs from China assessed a 3.9 percent rate, it said. “To make matters worse,” importers of finished TVs from Mexico paid zero duty under the North American Free Trade Agreement, it said. “Since 2013, the US has imported on average over 17 million finished LCD TVs from Mexico per year (or about 46% of total US LCD TV imports). These duty free imports are a major source of competition for Element's US production facility.” The MTB duty suspension “has been a job-saving development that has gone a long way to level the playing field for Element's workers” in South Carolina, said Element. “lt is vital that the existing MTBs are made permanent to provide a permanent solution to the tariff inversion.” The company made many of the same arguments when it testified successfully last summer for the removal of Section 301 tariffs on 9013.80.90 and 8529.90.13 goods from China.

The U.S.-Mexico-Canada Agreement on free trade “would modernize and strengthen protections for Americans' copyrighted works,” but “takes a decidedly un-modern approach to online copyright infringement that takes place on user-upload websites” like YouTube, blogged Free State Foundation Senior Fellow Seth Cooper Thursday. USMCA “could perpetuate the significantly under-protective notice and takedown system that prevails in U.S. copyright law,” he said. The Trump administration and Congress “should make clear that the USMCA's online infringement provisions are not precedent for future trade agreements,” he said.

“Substantive progress” is being made in “high-level” trade talks between China and the U.S., said a Chinese Foreign Ministry spokesperson Wednesday. “We are keeping in contact with each other.” The Chinese and U.S. teams “will continue to meet each other halfway and work together for a mutually beneficial agreement,” he said. President Donald Trump will dispatch U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing for “continued negotiations” that begin April 30 on a trade deal, said the White House Tuesday. Vice Premier Liu He, who will lead the talks for China, will then head a Chinese delegation to Washington for additional talks starting May 8, it said. “The subjects of next week’s discussions will cover trade issues including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases, and enforcement.”

Though the Trump administration postponed indefinitely raising the10 percent tariffs on Chinese goods to 25 percent (see 1903010031), iRobot, even “at the 10 percent level,” anticipates incurring $20 million to $25 million in tariff costs for 2019, said Chief Financial Officer Alison Dean on a Q1 earnings call Wednesday. IRobot argued unsuccessfully last summer for removing duties on the finished vacuum cleaners it imports from China under the 8508.11.00 tariff line on grounds that the duties would hurt the company and that robotic vacuums aren't an “industrially significant technology in China.” IRobot raised prices Jan. 1 on its i7 and i7 Plus premium vacuums to offset the higher costs, said Dean. “If tariffs are increased at some point in 2019, we would likely increase our prices again to offset the incremental tariff costs incurred,” she said. “Should the tariffs be lifted altogether, we would expect to lower prices to their pre-tariff levels. Any change in tariffs would take time to implement, as we and our retailers work through channel inventory, and we provide any contractual price change notifications to our partners.” Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told reporters Wednesday that the U.S. will step down the Section 301 tariffs and China the retaliatory duties in phases, with each side lifting the tariff at roughly the same time if they believe the other side is complying with a trade deal in good faith. He said the reductions will probably be done in tranches. "Over how long a period of time, I don't know," he said. "But there won't be a 100 percent reduction of tariffs on the day the agreement's signed." U.S. Trade Representative Robert Lighthizer in recent congressional appearances refused to say publicly whether a deal hinges on lifting the Section 301 tariffs on Chinese imports or keeping them in place to force China's compliance (see 1903130036). To mitigate the impact of the current tariffs, iRobot is "moving some of our production outside of China and starting with some of our more easy-to-build products,” said CEO Colin Angle. “China is where we are doing our most advanced work right now.” The company hopes to have a Malaysian production line “running at the end of this year and have our first products coming off the line,” said Dean. It won’t be “meaningful in terms of how many units are being produced in 2019 and when we’ll actually sell those in market,” she said. Shares plunged 23 percent Wednesday, closing at $100.42, as Q1 revenue fell roughly 5 percent short of Wall Street expectations, though sales were up 7 percent year over year.

Public interest comments are due April 25 on a Tariff Act Section 337 complaint at the International Trade Commission seeking a ban on imports of Cree LED packages containing potassium fluorosilicate-based phosphor on patent-infringement grounds, said a Federal Register notice Wednesday. Current Lighting Solutions, General Electric and Consumer Lighting alleged in an April 11 complaint that Cree and its Hong Kong and Chinese subsidiaries are importing LED packages that comprise fluoride-based phosphors activated with manganese that copy their patented technologies. The lighting is most commonly found in products designed for museums and high-end retail displays. Current, GE and Consumer Lighting seek a limited exclusion order and cease and desist orders against Cree LED packages and components that infringe its patents. Cree didn’t comment.

Applied Materials didn’t respond to queries Tuesday seeking comment on a Nikkei report the company ordered staff to suddenly stop doing business with customer Xiamen San'an Optoelectronics Friday, a day after the Chinese LED chipmaker appeared on a U.S. government “unverified list” of foreign entities. Applied supplies semiconductor production equipment and large-area deposition systems for LCD and OLED display manufacturing (see 1902150002). Xiamen San'an describes itself as China’s “largest LED epitaxial wafer and chip manufacturer, endeavoring to become top 1 in the global LED industry.” It was among 50 entities that Commerce’s Bureau of Industry and Security added to the unverified list Thursday after the agency “could not verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the U.S. Government's control,” said a Federal Register notice. Under Export Administration regulations, “license exceptions” for exports, re-exports and in-country transfers involving a foreign party are “suspended” when that entity appears on the list, said the notice. Exporters doing business with a listed entity also must ask that trading partner for a statement acknowledging the listing before doing further commerce, it said. Efforts to reach Xiamen San'an, whose shares are listed on the Shanghai stock exchange, were unsuccessful Tuesday due to time zone differences.

The Electronic Piracy Information Center is concerned about Customs and Border Protection use of personally identifiable information in cargo screening. "Although CBP claims that risk scores are only used on cargo and not individuals," the impact of cargo holds or screening affects individuals, EPIC commented on the 21st Century Customs Framework, posted Friday in docket 2018-0045-0044. "It is imperative that the methods -- now mostly secret -- and factors used in making targeting assessments are made public, and that the system is governed by ethics and accountability." The agency should adopt the "Universal Guidelines for Artificial Intelligence," the group said.

Though “it appears” President Donald Trump’s threat to close the southern border “is (most likely) off the table for the time being” (see 1904040018), a bottleneck in the flow of import goods to the U.S. through Mexican ports of entry is likely to worsen, blogged customs expert Ted Murphy with Baker & McKenzie Friday. The Department of Homeland Security is still reassigning Customs and Border Protection agents “to help deal with the increase in the number of migrants seeking to enter the United States,” said Murphy. Roughly 750 CBP agents have been deployed so far, but the number could climb as high as 2,000, he said. With “fewer agents to handle cargo clearance, it is leading to increasing delays at many of the land border crossings," he said. "We expect this trend to continue, and likely to get worse, in the short term.” Trump, meeting with reporters at the White House Friday, denied changing his mind on the border closure. "I may shut it down at some point, but I’d rather do tariffs" on automobiles entering the U.S. from Mexico, he said. "Mexico, I have to say, has been very, very good" in reducing the flow of migrants into the U.S. "over the last four days, since I talked about shutting down the border," said Trump. "If they continue that, everything will be fine. If they don’t, we’re going to tariff their cars at 25 percent coming into the United States. ... That means we make money as opposed to lose money. We probably bring those car companies back into the United States."

President Donald Trump directed the Department of Homeland Security to deliver a report on online trafficking of counterfeit and pirated goods. Due in about 200 days, it's aimed at gaining a better understanding of how online third-party marketplaces and other third-party intermediaries facilitate illegal activity, their origins and what goods are trafficked. Another goal is to “identify administrative, regulatory, legislative or policy changes that would enable agencies … to more effectively share information regarding counterfeit and pirated goods,” Trump said Wednesday.