Large European companies are increasingly side-stepping U.S.-China trade war tariffs by reorganizing supply chains, while smaller companies are finding creative ways to dodge tariffs or simply eat the costs, according to a Dec. 9 report from the European Union Chamber of Commerce in China. The fact that European companies have “negated” the effects of trade war tariffs “only serves to highlight the futility of bilateral tariffs in a global marketplace,” said Joerg Wuttke, president of the Chamber. “Repetitive swings of the tariff hammer have proven anything but strategic.”

The European Commission will double the tariffs on tableware from more than 30 companies in China that were found to have helped other Chinese companies avoid the existing antidumping duties on tableware, it said in a news release. “The investigation has confirmed that Chinese companies are evading anti-dumping duties of around 36% by channelling their ceramic exports through other companies that were subject to lower anti-dumping duties of around 18%,” it said. As a result, those companies will also be subject to the higher duty rate. The new rate will apply from March 21, 2019, and the EC will collect about €15 million ($16.7 million equivalent) in retroactive duties, it said. “This is the Commission’s largest anti-circumvention investigation to date,” the EC said. “It involved very significant resources, with 20 Commission investigators carrying out on spot verifications at 50 Chinese companies.”

Costa Rica’s tax administration is requesting comments on a proposal for a charging mechanism that would apply for value-added tax purposes involving certain cross-border purchases, according to a Dec. 11 post from KPMG. The draft mechanism proposes that Costa Rican issuers of debit cards or credit cards collect VATs for those purchases through a digital platform, KPMG said. The platforms could choose to register with the tax administration, KPMG said, or the VAT collection mechanism would be applied and collect VAT directly through the cards, the post said.

The Canada Border Services Agency updated Memorandum D19-6-3 on importing energy-using goods to add some new product requirements. The memo was updated to reflect amendments that “as of December 12, 2019, add import reporting requirements for the following new products: electric furnaces, heat and energy-recovery ventilators, commercial gas boilers, commercial oil boilers, commercial electric water heaters, commercial gas-fired storage water heaters, commercial oil-fired water heaters, household and commercial gas-fired instantaneous water heaters, miscellaneous refrigeration products, portable air conditioners, and clean water pumps,” the CBSA said. Natural Resources Canada also released an updated list of the affected Harmonized System codes in November (see 1911040042).

Cambodia is collaborating with South Korea on a one-year “feasibility study” of a free trade agreement between the two nations, according to a Dec. 12 report from the Hong Kong Trade Development Council. In a joint statement, the countries said a trade deal will “strengthen relations,” promote “service exports” and improve economic growth, the report said. Cambodia mainly exports garments, footwear, electronics, natural rubber and travel accessories to South Korea, while importing South Korean knitted textiles, trucks, electronics, cosmetics and beverages, the report said. All the goods are likely to be impacted by a potential trade deal.

Although the Senate Finance Committee will still have a mock markup on the U.S.-Mexico-Canada Agreement, it will happen after the implementing bill has been sent to Congress, so it will be more “mock” than in past deals. The reason the process of Congress weighing in on a trade deal is a mock markup is that under fast track, or Trade Promotion Authority, Congress cannot amend the deals. But typically, the administration sends up a draft implementing bill, and then does incorporate at least some of Congress's suggestions on language before sending the final implementing bill.

House Democrats and the Office of the U.S. Trade Representative say that the new NAFTA can serve as a template for future trade deals, but experts question how that might come to pass, and a key Republican wants at least one Republican priority restored in future deals.

President Donald Trump tweeted Dec. 12 that U.S. and China negotiators are “Getting VERY close to a BIG DEAL with China. They want it, and so do we!” However, Trump has said before that the two sides were very close -- including two months ago -- and nothing came of it. Numerous media outlets reported Dec. 12 that administration officials said an agreement in principle has been reached between China and the U.S., but no announcement had been made by press time. Several media outlets reported that the U.S. was willing to cancel tariffs set to take effect Dec. 15 and cut existing Section 301 tariffs by half, and an adviser to the president said Trump would cut tariffs, but did not say by how much. An announcement is expected on Dec. 13.

The State Department announced sanctions on three Iranian entities linked to weapons proliferation and eight entities involved in weapons smuggling from Iran to Yemen, the agency said Dec. 11. The announcement targets the Islamic Republic of Iran Shipping Lines (IRISL), its China-based subsidiary, E-Sail Shipping Company, and the Iranian airline Mahan Air. The Treasury’s Office of Foreign Assets Control previously sanctioned E-Sail in 2018, Mahan Air in 2011 and IRISL in 2008.

The Treasury’s Office of Foreign Assets Control sanctioned the son of Nicaraguan President Daniel Ortega and three Nicaraguan companies owned by the Ortega family, Treasury said in a Dec 12 press release. The action targets Rafael Antonio Ortega Murillo and two companies he operates -- Inversiones Zanzibar, S.A. and Servicio De Proteccion Y Vigilancia, S.A. -- as well as Distribuidor Nicaraguense de Petroleo, S.A., a chain of gas stations controlled by the Ortega family. Inversiones Zanzibar is used to transfer and hide profits from Distribuidor Nicaraguense, Treasury said. Servicio De Proteccion Y Vigilancia is a security firm that has received “millions” in government contracts, the press release said.