Government agencies beyond Customs and Border Protection are starting to take a closer look at blockchain, said Vincent Annunziato, director of CBP’s Business Transformation and Innovation Division, in an interview. The Food and Drug Administration is “starting to move, especially, I think, because of the food safety” aspect, he said. The Health and Human Services Department “got an authority to operate” and have “a system that they’re standing up,” he said. The regulatory and legal aspects of CBP’s blockchain efforts will likely "ramp up" if the Commercial Customs Operations Advisory Committee recommends moving forward based on results of proof of concept testing (see 1903120038), said Annunziato. At that point, the Office of Regulations and Rulings (OR&R) would have to get involved by reviewing requirements that weren’t necessary during the test, which simulated the North American Free Trade Agreement and Central America Free Trade Agreement certificates of origin process, he said. OR&R will be more connected during the coming blockchain test involving intellectual property rights, Annunziato said. It will need to play an active part in the IPR piece because of its role in approving applicants that ask CBP for protection, he said. The specific application of blockchain to the NAFTA/CAFTA processes is less important to the test itself, he said. Activities such as sending documents, storing documents and re-keying information would no longer be necessary, he said.

President Donald Trump doesn't plan to remove tariffs on Chinese imports, even as the U.S. and China work toward a trade accord, he told reporters Wednesday. “We're not talking about removing them,” he said of the tariffs. He wants to leave them “for a substantial period of time because we have to make sure that if we do the deal with China, that China lives by the deal," he said. China historically has had “a lot of problems living by certain deals," he said. Negotiations are “coming along nicely," Trump said. Top U.S. representatives will travel to China this weekend to “further the deal," he said. The U.S. is taking in "billions and billions of dollars right now in tariff money, and for a period of time that will stay," he said. A Chinese Foreign Ministry spokesperson sidestepped some questions, and hopes "the two sides will follow the important instructions of the two heads of state and reach a mutually beneficial agreement on the basis of mutual respect," he said Thursday. "Consultations have made substantive progress." U.S. Trade Representative Robert Lighthizer declined repeatedly in congressional appearances to commit publicly to whether a trade deal hinges on lifting tariffs or keeping them in place to enforce China's compliance (see 1903130036).

China’s mobile ecosystem added $750 billion in value to the country’s economy in 2018, or 5.5 percent of GDP, GSMA reported. It's the top mobile market, with almost 1.2 billion unique mobile subscribers on Dec. 31, the group said Wednesday: Some 69 percent of mobile connections there are smartphones.

FedEx experienced “a significant amount of traffic that was put on the water” beginning in late summer as importers tried to beat the Jan. 1 increase in the List 3 Section 301 tariffs on Chinese goods, said CEO Fred Smith on a fiscal Q3 call Tuesday. Smith’s account squares with recent National Retail Federation reports of busy Q4 import activity at major U.S. container ports (see 1812070026). Though President Donald Trump postponed the increase to March 1 and delayed it again indefinitely (see 1902250001), “there was a lot of inventory that was moved into the U.S." in calendar Q4 and a subsequent slowdown in calendar Q1, he said. “So hopefully now with the anticipation of a trade deal,” said Smith, “maybe we'll go back into a more normal cycle.” FedEx estimates U.S. e-commerce numbers about 50 million packages in “average daily volume,” and forecasts that will double to 100 million by 2026, said Brie Carere, chief marketing and communications officer. “We expect one in four incremental e-commerce packages to be locally fulfilled between now and 2026,” she said. “Innovations” like the robotic FedEx SameDay Bot, unveiled last month, and the new FedEx Extra Hours program will help meet the trend, she said. Hours “enables merchants to fulfill locally as late as midnight while enabling their customers to shop in the evening with next-day or two-day delivery,” she said.

The Chinese foreign ministry gave few new details Tuesday on the status of U.S.-China negotiations aimed at reaching a comprehensive trade accord on technology transfer and intellectual property security. “The working teams of the two sides are in close contact and the relevant consultations have also made progress,” said a spokesperson. “We hope the working teams will implement the important consensus of the two heads of state and reach a mutually beneficial and win-win agreement. This is in the interests of the two countries and also meets the shared aspiration of the international community.” The U.S. was in the “final weeks” of either reaching a “structural,” enforceable trade agreement with China or walking away from the negotiations empty-handed, U.S. Trade Representative Robert Lighthizer testified last week (see 1903130036).

Recent supply-chain “activity” emanating from tariffs on Chinese goods “ebbed and flowed” among clients of contract electronics manufacturer Jabil, said CEO Mark Mondello on a Q2 call Thursday. “We've been very helpful to a significant amount of our customers in terms of game plans” for shifting supply chains outside China, he said. “Some have been proactive and some are taking a wait and see.” For customers seeking to modify supply chains to escape or reduce duties exposure, “we are very well-positioned to accommodate them,” he said. “It's kind of a wait and see for a lot of us in the next six to eight weeks” as U.S.-China trade talks move toward some unknown conclusion, he said. The U.S. "before too long" will have either "a good result or we’re going to have a bad result,” U.S. Trade Representative Robert Lighthizer told the Senate Finance Committee Tuesday (see 1903130036)

Section 301 tariffs on Chinese imports would reduce U.S. GDP by up to $1 trillion within a decade if left in place, concluded a Rhodium Group study for the U.S. Chamber of Commerce. The tariffs are “eroding” U.S. “competitiveness” in information and communication technology and “undermining globalized supply chains,” said the chamber, which plans to release the report Friday. “U.S. tariffs, together with Chinese retaliation, are disrupting global trade and supply chains, further damaging American businesses, workers, farmers, ranchers and investors,” commented the chamber in August, arguing unsuccessfully against imposition of the List 3 tariffs that took effect Sept. 24. The three rounds of tariffs imposed since July are costing the tech industry $1 billion a month in higher fees, estimated CTA in December (see 1812140045). U.S. Trade Representative Robert Lighthizer, in two recent appearances before Congress, refused to say if a trade deal with China hinges on lifting the tariffs or keeping them in place to enforce Chinese compliance (see 1903130036).

Some participants in Customs and Border Protection’s proof of concept (POC) for blockchain using North American Free Trade Agreement and Central America Free Trade Agreement certificates like the results. Some in the trade business say it complicated things (see 1903070014). There's consensus the POC showed the technology deserves further consideration, said Emily Beline, senior attorney at FedEx. The trade industry gave "universal support" for CBP to continue in the blockchain realm, she told a Georgetown University law school event Friday. Vincent Annunziato, director of CBP’s Business Transformation and Innovation Division, said uploading some forms makes it instantaneous to later review them: "If we put out a request" to Walmart, for example, and "Walmart sends us the information, guess who's notified? The government, the broker, Walmart, they're all notified." That’s better than a document that requires someone to "look at it," he said. "I don't have to look at anything when I have digital data." Blockchain should cut times the data needs to be re-entered, Annunziato said. The moderator, Barnes Richardson lawyer Lawrence Friedman, agreed with an audience member there's some concern "as I think about my clients" on the blockchain creating new requirements that aren’t legally mandated. CBP is still examining how to go forward when weighing the "efficiencies gained," Annunziato said. "There may be scenarios where what we can do is keep it in a situation where it's not required but it's optional if available." Data in the blockchain isn't necessarily better because it’s there, said Christine McDaniel, senior research fellow at George Mason University's Mercatus Center. "The integrity of the data is as strong as the weakest link of the participants."

March retail imports are expected to drop to their lowest levels in nearly a year, with retailers in their annual “lull” between promotional shopping periods and the Section 301 tariff increase on Chinese imports indefinitely on hold (see 1903010031), said the National Retail Federation Friday. Retailers are “taking a break from the rush to bring merchandise in ahead of tariff hikes now that the increase that was scheduled for March has been delayed,” said NRF. “We are hoping that the delay is permanent and, better yet, that tariffs of the past year will be removed entirely. But either way, imports will start to build up again soon as retailers prepare for the summer.” NRF estimates U.S. ports will handle 1.59 million 20-foot-long cargo containers or their equivalents in March. That would be a 3.2 percent increase from March 2018, but the lowest monthly level since April, it said.

General Electric’s trade policy director doesn’t buy the conventional wisdom that it’s too hard for U.S. companies to source goods from countries other than China to escape the Trump administration’s Section 301 tariffs on Chinese goods, he said Tuesday. “Supply chains are actually kind of flexible," Drew Quinn told an International Trade Association workshop on Asia. He conceded he agrees with those who argue not many countries of origin can match the skills or scale found in China. Legislation introduced last week in the House (HR-1452) and Senate (S-577) to mandate an exclusion process for the List 3 tariffs that took effect Sept. 24 would grant exemptions to goods “not commercially available” outside China, or not produced outside China ”at a cost-competitive price at commercial scale,” as International Trade Commission data would define that (see 1903010031). GE hasn’t heard back from the Office of the U.S. Trade Representative about any of the 25 exclusion requests it made to exempt power, aviation and healthcare goods from the List 1 tariffs, said Quinn, a former deputy USTR. He worries that only List 3 tariffs would be lifted in a U.S.-China trade deal, he said: "We hope that List 1's 25 percent tariffs does not become the new normal."