Customs and Border Protection is "conducting integration testing to prove compatibility of a blockchain platform with multiple partner systems," said an update from the emerging technologies working group ahead of the Oct. 3 Commercial Customs Operations Advisory Committee meeting. CBP began an initial "proof of concept" in September (see 1808210012) as the agency considers the potential for the distributed ledger technology. Portions of the North American Free Trade Agreement-Central America Free Trade Agreement "import process, specifically verification of intellectual property and relationships between licensees and licensors, have been identified as good candidates for improvement if a transition to a more digitized, decentralized system is undertaken," it said.

Congress needs to “instruct” U.S. Trade Representative Robert Lighthizer to bring a World Trade Organization case for violating WTO rules against unfair trade practices, testified Information Technology and Innovation Foundation President Rob Atkinson Wednesday before the House IT Oversight Subcommittee. Congress should “take a hard line on limiting most Chinese investment” in the U.S., including in Chinese-backed “tech accelerators,” said Atkinson. He urged limiting “ongoing science and technology cooperation” with China, "especially considering that much of that cooperation is lopsided,” he said. The Trump administration placed Trade Act Section 301 tariffs “on a wide array of Chinese exports in an effort to bring the Chinese government to the negotiating table,” said Atkinson. “It is not clear if this approach will succeed.” The “most important step” the U.S. can take is develop a “joint campaign with our allies” to curb bad Chinese behavior, he said, to make "it more likely that China feels like it has no choice but to play more by the rules.”

The Trade Act Section 301 tariffs on Chinese imports that took effect Monday (see 1809240011) will cause “sticker shock” for consumers and harm small businesses, the owner of an independent electronics and appliance store told a free-trade event in Washington Tuesday. “We couldn’t be more discouraged by this ongoing trade war and what it means for our family owned company that has been in business for more than 70 years,” said Ron Romero, owner of Schaefer’s TV and Appliance in Lincoln, Nebraska, according to the National Retail Federation, which organized the Trade Builds America forum with several other groups. “We were only given a week’s notice in some cases to prepare for this latest tariff onslaught that couldn’t have come at a worse time as we approach the holiday shopping season,” NRF quoted Romero as saying. Most of the appliances Romero sells “are assembled by domestic manufacturers but rely on imported components that are being hit by tariffs,” he said. “It simply doesn’t make sense why Washington is making it more expensive to produce goods here in the United States. That will only mean higher costs for American families and small businesses like mine.”

Coping with the U.S.-China trade war “continues to be a moving target,” said Mark Mondello, CEO of contract manufacturer Jabil on a Tuesday earnings call. “You wake up one day, there’s a tweet, you wake up 48 hours later, something else is going on,” said Mondello. “It’s a very complicated issue in terms of what’s going to be, how bad will it get.” There’s some “conversation” in the supply chain that the trade war is “just going to be kind of a little bit of a tit for tat, and then there’s people that have the opinion that it could extrapolate to something much bigger,” he said. If U.S. tensions with China “escalate in a way that we don’t anticipate, but if they were, it absolutely is going to affect our business, as it will everybody’s,” he said. Mondello personally and in dealing with customers tries “not to get too obsessive about how bad things can get,” he said. “We do planning scenarios internally on what we would do, but assuming this thing doesn’t blow up in a big way, I think Jabil’s really well-positioned.”

Low-cost, two-way VHF/UHF radios must comply with rules, said an FCC enforcement advisory Monday. All such radios must be authorized before being imported, advertised, sold or operated here, the agency said. “Many of these radios violate one or more FCC technical requirements,” the FCC said. “Some can be modified to transmit on public safety and other land mobile channels for which they are not authorized, while others are capable of prohibited wideband operations. Such radios are illegal, and many have the potential to negatively affect public safety, aviation, and other operations by Federal, state, and local agencies, as well as private users.”

Micron Technology expects its gross margins to take a “near-term” hit “to the tune of 50 to 100 basis points” from the 10 percent tariffs on $200 billion worth of Chinese imports that take effect Monday and are due to rise to 25 percent Jan. 1 (see 1809180035 and 1809180020), said Chief Financial Officer Dave Zinsner on a Thursday earnings call. Shares fell nearly 8 percent after hours and closed 2.9 percent lower Friday at $44.74. “We are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters,” said Zinsner. “Clearly, tariffs are impacting us,” and reducing Micron’s exposure to the damage “obviously takes some time,” he said. “We have to do some things operationally to get ourselves in a place where it isn’t as impactful, and so, it’ll be a quarter or two probably before we start to see some benefit from the improvement there.” Micron argued unsuccessfully for removing from the Trump administration’s “retaliation list” the tariffs on 8473.30.11 printed circuit assemblies imported to the U.S., which include the “memory modules” it makes at the fab it owns in Xi’an, China.

With the “great news” that Element Electronics persuaded the Trump administration to remove LCD panels and motherboards under the 9013.80.90 and 8529.90.13 line items from the third tranche of Trade Act Section 301 tariffs set to take effect Monday (see 1809180020), Element’s Winnsboro, South Carolina, LCD TV assembly factory “will remain open!” it emailed retail customers Walmart and Target Tuesday. “Thanks again for supporting Element -- the only major television brand assembling TVs in America.” Element threatened to shutter the factory and terminate the remaining 125 jobs there if tariffs on the components it sources from China had gone through because the prohibitively higher costs would have forced the company to import finished TVs from China rather than assemble them in Winnsboro (see 1809130047). "We are working on plans now," Element General Counsel David Baer told us Thursday when asked if the company will restore the Winnsboro workforce to its pre-tariff levels of 300-plus employees. Winnsboro sustained no serious flooding or damage from Florence, and "everyone is safe," though "we got a bunch of rain," said Baer.

The two rounds of Trade Act Section 301 tariffs implemented July 6 and Aug. 23 account for less than 10 percent of the shipment volume FedEx does in the “China-U.S. lane bidirectionally,” and that volume generates about 2 percent of total revenue for the “whole enterprise,” said Raj Subramaniam, FedEx chief marketing and communications officer, on a Monday earnings call. New tariffs on the $200 billion worth of imports taking effect Sept. 24 (see 1809180020) are expected to raise the impact to a quarter of the commerce FedEx does between the two countries, he said. “The uncertainty around the issue and the potential for additional tariffs is affecting the market and we're beginning to see some of the economic activity in China starting to moderate as a result of that,” said Subramaniam about an hour before President Donald Trump announced the third tranche of tariffs would take effect next Monday (see 1809170052). FedEx hasn’t yet seen “any significant shifts in the customer supply chain” as a result of the tariffs, he said. “However, if the situation continues for any amount of time, we do expect customers to diversify their supply chains and perhaps some of the trade patterns might change.” Subramaniam is confident “the scale and flexibility of FedEx will enable us to deliver strong results in enterprise despite any uncertainty on trades and tariffs,” he said.

It's odd to be talking about blockchain in terms of regulatory policy, said Aaron Arnold, a fellow at Harvard University who studies trade controls to prevent proliferation of weapons of mass destruction. The technology is designed to remove the intermediary and decentralize authority, said panelists on blockchain and trade security at the Stimson Center, a Washington think tank on security. A government blockchain verification system is inherently centralized, said Jonathan Tame, manager in Deloitte's technology practice. Arnold gave an example of an instance in which a Massachusetts supplier sent pressure transducers to its Chinese subsidiary, and then an employee there falsified documents about the package's contents and sent the equipment -- used to enrich uranium -- to Iran. If these transactions were on a distributed ledger, “would this have stopped the transshipment to Iran? No," he said. That’s not “to imply that blockchain or distributed ledger technologies have zero applications" here, he said. For a system with items subject to export controls tagged in an unalterable way that goes to a country where it's not allowed, the seller wouldn't be paid.

A Trump administration order imposing the third tranche of Trade Act Section 301 tariffs on imports from China “could come any day, and retailers have been bringing in record amounts of merchandise ahead of that in order to mitigate the impact on their customers,” reported the National Retail Federation Monday. “Retail sales are growing stronger than expected this year thanks to tax cuts and job creation, but tariffs are the wild card that threaten to throw away a significant portion of those benefits.” U.S. consumers “appear to be spending money on goods ahead of the tariff price increases that will eventually come,” said NRF. “But there could be a rocky road ahead as the impact of tariffs begins to be more fully felt.” U.S. retail ports handled 1.9 million 20-foot-long containers or their equivalents in July, a 2.8 percent increase sequentially from June and 5.6 percent increase from July 2017, it said. August was estimated at 1.92 million containers, up 4.8 percent year-over-year, it said. August was the third month in a row to set a new record for the number of containers imported during a single month, it said.