GoPro will move most of its U.S.-bound action-camera production out of China by summer as a hedge against its products’ exposure on “any new” Section 301 tariffs list, the company said on Dec. 11. GoPro escaped tariffs through the three rounds of duties imposed between July and September. “Today's geopolitical business environment requires agility, and we're proactively addressing tariff concerns” with the move, Chief Financial Officer Brian McGee said. “This diversified approach to production can benefit our business regardless of tariff implications.” McGee spoke on a quarterly earnings call in early November of GoPro preparations to move production out of China if “necessary.” President Donald Trump threatened Sept. 17 to "immediately pursue" a fourth tranche of tariffs on $267 billion worth of additional imports if China retaliated for the duties that took effect Sept. 24. China did retaliate, but Trump never acted. GoPro didn’t comment on where it’s moving production to.

Chern-Chyi Chen, deputy representative for trade and economic affairs for Taiwan in Washington, said "witnessing a trade paradigm shift" has been very interesting. Taiwan, the 11th-largest trading partner with the U.S., is accelerating its investment outside of China as the U.S.-China trade conflict builds, according to Rupert Hammond-Chambers, the president of the U.S.-Taiwan Business Council. The two were guests at a Heritage Foundation event on U.S. trade with Taiwan on Nov. 13. The event was timed to a new report on Taiwan from Heritage researcher Riley Walters.

Reclassifying Chinese imports into Harmonized Tariff Schedule codes for goods not exposed to Section 301 tariffs is perhaps the least understood, most underused strategy that companies can try for minimizing the duties’ impact, a UPS executive said during an Oct. 3 webinar on high-tech supply chains. “If you’re not participating in what that classification process looks like, you’re taking a risk, I would say, at a minimum,” said Ron Shepherd, vice president at UPS Trade Management Services.

The two rounds of 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 represents about 2 percent of total revenue for the “whole enterprise,” said Raj Subramaniam, FedEx chief marketing and communications officer, on a Sept. 17 earnings call. New tariffs on the $200 billion worth of imports would raise the impact to a quarter of the commerce FedEx does between China and the U.S., 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,” Subramaniam said about an hour before President Donald Trump announced the third tranche of tariffs would take effect Sept. 24. 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 that “the scale and flexibility of FedEx will enable us to deliver strong results in enterprise despite any uncertainty on trades and tariffs,” he said.

There's been momentum in the NAFTA negotiations, but "we still think it is likely the president could withdraw," said Brian Kingston, a vice president with the Business Council of Canada. President Donald Trump has threatened to leave the deal (see 1708310011). The Canadian government has made a lot of diplomatic outreach in the U.S. Congress recently, and Kingston is hopeful that lawmakers would just sit on the request and not take action, he said during an event at Johns Hopkins University's School of Advanced International Studies on March 15. That would result in a "zombie NAFTA," he said. "Not an ideal outcome." An announcement to withdraw is really a six months' notice of withdrawal, and some believe the U.S. cannot end NAFTA tariff rates without a congressional vote to set replacement rates (see 1711150031).

Industry representatives on March 4 made their case to the Office of the U.S. Trade Representative to add all 29 HTS subheadings covering travel goods under review for addition to the list of eligible products under the U.S. Generalized System of Preferences. During USTR’s public hearing for the U.S. GSP Program 2015/2016 Annual Review of Products and Competitive Need Limitation Waivers, Allison Baron, a lawyer representing Michael Kors, claimed that, if added, the higher volume of “certain handbags and travel goods products” flowing to the U.S. would benefit U.S. consumers by allowing importers to offer “desirable goods” at competitive prices, defraying higher labor costs. USTR has published a list of subheadings for travel goods it accepted for GSP review during this cycle (here).

The addition of several industry-suggested travel items to the U.S. Generalized System of Preferences Program would help U.S. companies diversify sourcing and reduce about $75 million in duty costs, without hurting domestic production, American Apparel & Footwear Association Executive Vice President Stephen Lamar wrote in a Feb. 29 letter to the International Trade Commission (here). AAFA representation testified on Feb. 24 before the ITC, urging the body to consider according GSP benefits to all eligible travel goods from all GSP beneficiary countries. A U.S. government decision is expected in June, and if approved the products "should" be able to enter duty-free treatment on July 1, AAFA said in an email. Items suggested for GSP beneficiary treatment include luggage, backpacks, purses, and wallets, according to AAFA's letter. AAFA argued that goods from China, Vietnam, Italy, and France compose 86 percent of all U.S.-imported travel items by value, and added that travel goods "are not considered import-sensitive," as the U.S. has a 98-percent import penetration of these goods, meaning "very few" of them are made in the U.S. Another letter (here) written to ITC from a coalition of 23 industry organizations, including AAFA, reiterated this point. "There is virtually no production of these items in the United States and, as such, there will be no domestic industry that will be negatively affected by the proposed designation," the coalition letter states. "On the other hand, U.S. brands, private label designers, made-to-order producers, as well as the U.S. workers they employ and the consumers they serve, stand to benefit greatly from lower duty costs under the GSP."

The government of Canada recently issued the following trade-related notices for March 9 (note that some may also be given separate headlines):

Latin American and Caribbean nations are struggling to break into global value chains and attract foreign investment due in large part to downward economic trends, export decreases and poor transportation and logistics infrastructure, said a number of trade scholars and analysts at a Woodrow Wilson International Center for Scholars event on Oct. 27 (here). The region’s geographic isolation increases the already-critical need for transportation and logistical improvements, the panelists said. “When you are thinking about the logistics infrastructure area, it is not only about the big public works like, you know, ports and airports,” said Inter-American Development Bank (IDB) trade economist Juan Blyde. “It’s also about the ‘soft’ policies like, for example, improving the efficiency of a customs office.” The Pacific Alliance, a 2011 trade pact comprised of Chile, Colombia, Mexico and Peru, is a relative paradigm for how harmonized rules of origin can help facilitate regional supply chains, arguably more important than globally supply chains, said some of the speakers.

The Minnesota U.S. District Court on July 9 let an importer’s lawsuit against a sourcing agent to proceed, dismissing its breach of contract claim because it was filed too late but allowing claims related to fraudulent misrepresentation. Liberty Diversified International imported and sold hand trucks from China under its Safco trade name. When the hand trucks became subject to antidumping duties of over 300 percent, it asked its Hong Kong-based sourcing agent, Denson International, to shift production to a factory with a lower rate. But Liberty says it later found out Denson lied about where it was getting the hand trucks, costing it nearly $2 million in duties and customs penalties.