Supply Chain

U.S. Customs and Border Protection’s Office of Trade and the USDA is hosting a webinar on Wednesday, August 21, 2024, at 2:00 p.m. ET titled Lacey Act and Phase VII Implementation. The webinar will provide an overview of the Lacey Act, describe the 2008 amendments to the act covering plants and plant products and their requirements, and provide the latest updates on Phase VII of the Import Declaration Implementation Schedule. 

A bipartisan group of House lawmakers, including the chairman and ranking member of the House Select Committee on China, unveiled legislation yesterday creating a new structure within the US government to prosecute international trade crimes. This bill would direct DOJ to establish a new structure dedicated to prosecuting nternational trade crimes in order to enhance US capabilities for detecting, investigating and prosecuting trade fraud, duty evasion, transshipment and other trade-related crimes.

The United States is asking Mexico to review whether workers at a Chinese-owned manufacturing facility located in Mexico are being denied worker rights. The request, under the US-Mexico-Canada Agreement’s rapid response labor mechanism, seeks information on whether workers at the Impro Industries Mexico, S. de R.L. de C.V. facility in the city of Villa de Reyes in the State of San Luis Potosí, Mexico, are being denied the right to freedom of association and collective bargaining. Impro is a Hong-Kong based maker of cast and machined component parts for use in the aerospace, energy, medical, automotive, and agricultural industries,. Impro’s 'Phase One' Project features a 1,200,000 square feet facility, 45km south of the San Luis Potosi International Airport.

Legislation to ban Chinese-made connected vehicles from US military bases and other federal installations was introduced yesterday by Sen. Sherrod Brown (D-Ohio). The Countering Adversary Reconnaissance (CAR) Act would bar Chinese connected vehicles from much of the U.S., making it impractical and unprofitable to import them in the first place. The Countering Adversary …

The State Department issued a Statement of Concern Tuesday focused on certain minerals supply chains from Rwanda and eastern Democratic Republic of the Congo. The statement clarifies the specific risks associated with manufacturing products using minerals extracted, transported or exported from eastern DRC, through Rwanda and Uganda, according to State.

The Commerce Department’s Bureau of Industry and Security and the Department of Health and Human Services’ Administration for Strategic Preparedness and Response announced Tuesday that they are conducting a comprehensive assessment of the US Active Pharmaceutical Ingredient industrial base to gain an understanding of the supply chain network. The resulting information will allow the federal government to more accurately plan and develop funding strategies to help ensure the availability and security of the API supply chain and to raise awareness of current limited domestic manufacturing capabilities, among other potential issues, according to BIS.

The Forced Labor Enforcement Task Force (FLETF), released an updated Uyghur Forced Labor Prevention Act (UFLPA) Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China (PRC). Notably in this year’s strategy, the FLETF has identified new high priority sectors for enforcement – aluminum, polyvinyl chloride (PVC), and seafood – for the first time since 2022.

The Department of Homeland Security, Chair of the Forced Labor Enforcement Task Force (FLETF) released a summary of enforcement efforts since enactment of the Uyghur Forced Labor Protection Act. Highlighted in the fact sheet are the impacts the FLETF has made on Solar, PVC and Cotton supply chains, as well as a summary of the recent designation of New High Priority Sectors for Enforcement

The USTR's office Monday released the second Report on the Operation of the United States-Mexico-Canada Agreement (USMCA) with Respect to Trade in Automotive Goods . The  conclusion of the report is that there is no conclusion.   The automotive industry continues preparing for full implementation of the USMCA rules of origin (ROOs) when special flexibilities afforded under alternative staging regimes begin to expire in 2025. 

Wednesday Sen. Sherrod Brown (D-OH), United Steelworkers leadership and Cleveland Cliffs leadership called on the administration to act to stop the surge in Mexican steel imports, which has been attributed to the Chinese government routing steel through Mexico to avoid U.S. tariffs. "The Mexican government is currently violating a 2019 agreement with the U.S. and threatening steelworkers in Ohio and around the country," according to a statement.

Milwaukee Tool faces allegations of utilizing forced labor in a Chinese prison factory to manufacture work gloves, where workers endured harsh conditions, including beatings and torture. The lawsuit, filed on Thursday in the U.S. District Court in Milwaukee, asserts that the  company either knew or should have known that the gloves were produced through forced labor, contravening the U.S. Trafficking Victim Protection Act.

While Fulfilled by Amazon merchants have long taken advantage of the duty-free treatment of small shipments, Amazon's own merchandise sales have customarily involved the payment of tax and duty, creating an opening for the Chinese e-tailers Shein and Temu. Not for long.   Wednesday, Amazon announced a new channel for its platform which will sell consumer goods and clothing direclty from China to US customers.  Eliminating the US warehousing nexus puts the Seattle-based merchant on equal footing with its Chinese rivals, in terms of landed cost.

The United States last year imported 3 billion pounds of UCO, half of which came from China – up from a total of 200 million pounds imported in 2020. A bipartisan group of senators is calling on the Biden Administration to address this surge in imports.

Just in case you're still depending on a Russian vendor for your cybersecurity, the Commerce Department has banned Kaspersky Labs from directly or indirectly providing anti-virus software and cybersecurity products or services in the United States or to U.S. persons. The Final Determination by the Bureau of Industry and Security (BIS) is the first of its kind and is the first Final Determination issued by BIS’s Office of Information and Communications Technology and Services (OICTS).  

 Congressional China hawks called for the Commerce Department to include Chinese drones in evolving regulations for connected vehicles.  "With UAVs’ connected software and hardware posing similar national security threats to those of other identified connected vehicles, such transactions present undue and unacceptable risks to U.S. national security," the lawmakers wrote.

Senate Finance Committee Chair Ron Wyden, D-Ore., called on BMW to provide straight answers about its use of parts made by a banned Chinese supplier, following shifting explanations from the German automaker in response to a Finance Committee Democratic staff investigation. “The Committee is continuing to investigate several aspects of BMW’s exposure to forced labor through JWD, its tier 3 supplier,” the Senator wrote in a letter to the automaker.

Canadian helmet manufacturer Galvion, Ltd. has agreed to pay $2,495,000 to resolve allegations that it violated the False Claims Act through the knowing sale of non-conforming parts to the United States Department of Defense. Through prime vendors, the company sold products to the United States under a Defense Logistics Agency program which requires that textiles be sourced from the United States in accordance with the Berry Amendment. The investigation stemmed from a complaint made to the DLA Hotline related to the origin of materials used in the company’s products.

Congressional Republican China hawks have called for a comprehensive ban on trade and investment dealings with two leading manufacturers of electric vehicle battery systems, Led by the new Chair of the House Select China Committee John Moolenaar (R-MI), the lawmakers wrote letters detailing "shocking new evidence implicating major Chinese battery manufacturers, Gotion and CATL, in Chinese Communist Party state-sponsored slave labor and the ongoing Uyghur genocide." The letters to Mr. Silvers detail supply relationships between the two firms and mineral, metals and labor providers currently under US sanction for their involvement in modern slavery in the Xinjiang Uyghur Region of Western China.

The Department of Commerce  seeks public comment to inform its work on assessing and analyzing risk in global supply chains. The deadline is June 21. This includes input into a determination of an initial list of “critical sectors” and “key goods” as provided under the Indo-Pacific Economic Framework for Prosperity (IPEF) Agreement Relating to Supply Chain Resilience.

A bipartisian gropu of China hawks on Capitol Hill sent  sent a letter to MSCI's President Henry Fernandez outlining "significant concerns" after the firm removed its forced labor red flag for Volkswagen's factory in China. The Volkswagen factory in Xinjiang is known for using Uyghur forced labor, This led MSCI, an American finance company, to grant Volkswagen a “red flag” rating in 2022.  However, MSCI , relying on an audit the lawmakers describe as "flawed," made the decision to lift Volkswagen’s “red flag” rating. 

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