Supply Chain

Troubled Chinese-owned printer manufacurer Lexmark agreed to be acquired by Xerox Corporation, clearing the way for resolution of its slavery problem.   The Department of Homeland Security had added the firm's parent Ninestar and certain of its subsidiaries to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, and the company "is suffering irreparable harm to its business and reputation based on the listing," according to a statement at the time.

Troy A. Miller, U.S. Customs and Border Protection (CBP) Senior Official Performing the Duties of the Commissioner, delivered opening remarks to the Commercial Customs Operations Advisory Committee (COAC) meeting Dec. 11 in Washington, DC, where he outlined steps being taken to address the flood of de minimis shipments swamping customs operations.

The Office of the U.S. Trade Representative is launching a Section 301 investigation to examine the PRC’s targeting of foundational semiconductors (also known as legacy or mature node chips) for dominance and the impact on the U.S. economy. In addition, the investigation will initially assess the impact of the PRC’s acts, policies, and practices on the production of silicon carbide substrates or other wafers used as inputs into semiconductor fabrication.

The White House issued the first-ever Quadrennial Supply Chain Review Thursday, highlighting US government’s efforts to tackle risks, eliminate bottlenecks and ensure the efficient operation of supply chains. Key initial findings shared in the review include that nearly every industry in the economy scores high in at least one indicator of risk interdependence is high, and US goods industries have poor import diversification.

This week Commerce Department announced the latest in the Biden Adminstration's scramble to get the CHIPS grant commitments out before the change of regime.  The $7.626 billion of subsidies went to two American companies, two from Korea, and one from Taiwan.   The funds are to build facilities in the United States.

On Tuesday the American Anode Material Producers filed a petition calling for an anti-dumping investigation with punitive tariffs of up to 920% on Chinese graphite, acccording to news reports and an announcement from the producers' lawyers. A ninefold increase in graphite pricing would double the cost of a US-made EV battery.   While the US produces no natural graphite, synthetic material from China is subject to a 25% levy, imposed during the first Trump administration in 2018.    Tesla and two Korean battery firms have been lobbying for exemptions, asserting that nascent US synthetic graphite capacity is inadequate.

The United States – for the third time – is seeking establishment of a panel under the US-Mexico Canada Agreement’s labor rights dispute settlement mechanism. The request comes after the US was unable to agree with the Mexican Government on a response to alleged worker right violations at a mining facility state of Zacatecas owned by a Canadian miner. In at least 22 cases to date, the United States and Mexico have been able to cooperate to successfully address labor rights violations at the Mexican facilities in question, according to the US Trade Representative’s Office. But the two sides were not able to reach agreement on a resolution in this case.

President Joe Biden plans to formally block Nippon Steel's proposed takeover of U.S. Steel on national security grounds once the $15 billion deal is referred back to him later this month, Bloomberg News reported on Tuesday, citing people familiar with the matter. CFIUS, the U.S. national security panel reviewing the deal must refer its decision on the merger to Biden by Dec. 23. A referral to the president suggests at least one panel member sees the deal as risky, the report added.

Members of the House Select Committee on China unveiled three bipartisan bills last week aimed at reducing US dependence on China for critical minerals. The bills were developed by the panel’s Critical Mineral Policy Working Group, which held its final meeting of the year Wednesday. The bills, included in a report released by the working group promote international cooperation and workforce reforms, as well as measures which appear designed to render uneconomic Chinese battery and magnet manufacturers in the US.

The US Trade Representative’s Office announced last week it is hiking tariffs on tungsten and some clean energy products from China as it wraps up a Section 301 investigation. The tariff rates for solar wafers and polysilicon will increase to 50 percent, and the rates for certain tungsten products will increase to 25 percent, according to USTR.

The US Trade Representative’s Office is gearing up for its 2025 Section 301 review to identify countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access. USTR is seeking public comments on that identify acts, policies, or practices that may form the basis of a country’s identification as a Priority Foreign Country or placement on the Priority Watch List or Watch List.

Senators Tom Cotton (R-AR) and Rick Scott (R-FL) have introduced legislation which blocks the recently finalized Treasury Department rule on 45X production tax credits from being implemented. The legislation was introduced in the House by Reps. John Moolenaar (R- MI) and Jared Golden (D-Maine). The 45X credit subsidizes the production of five types of goods: solar energy components, wind energy components, battery components, inverters, and critical minerals. The 45X credit is projected to cost taxpayers $72.7 billion between FY2023 and FY2027.

A Chinese national who purchased a Kentucky magnet company was indicted for his role in an illegal scheme to send export-controlled defense-related technical data to China and to unlawfully supply the Department of Defense (DOD) with Chinese-origin rare earth magnets for aviation systems and military items.  

A Chinese national who purchased a Kentucky magnet company was indicted for his role in an illegal scheme to send export-controlled defense-related technical data to China and to unlawfully supply the Department of Defense (DOD) with Chinese-origin rare earth magnets for aviation systems and military items.  

Friday Bureau of Industry and Security (BIS) released a report on the use of mature-node semiconductor chips, or legacy chips, in supply chains that directly or indirectly support U.S. critical infrastructure. Nearly half of surveyed companies were unable to determine whether their products contained any chips manufactured by PRC-based foundries. The report notes that capacity expansion in China has begun to cause pricing pressure on U.S. chip suppliers.

A Chinese-owned producer and distributor of aluminum extrusions in the Dominican Republic has been determined to be employing convict, forced or indentured labor by US Customs and Border Protection. This comes on the heels of a successful appeal by Kingtom Aluminio SRL, of an Enforce and Protect Act (EAPA) case before the U.S. Court of International Trade (CIT), where an alleger asserted Kingtom Aluminio was evading antidumping and countervailing duty orders on aluminum extrusions from China. 

Tadashi Yanai, chairman and president of Fast Retailing, the parent company of Japanese fast fashion giant Uniqlo, said the company does not use Xinjiang cotton. Speaking in Tokyo about the firm's measures to be more transparent about where the materials in its clothes come from and how they are made, Yanai said: "We're not using [cotton from Xinjiang," BBC reported on Thursday.  "Actually, it gets too political if I say anymore so let's stop here,"

The Department of Homeland Security (DHS), on behalf of the Forced Labor Enforcement Task Force (FLETF), announced the addition of 29 companies based in the People’s Republic of China to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List – bringing the total number of entities on the UFLPA Entity List to 107.  The 29 added entities span sectors including agriculture, food processing, and industrial materials.  Twenty-three additional entities in agriculture are cited for sourcing products like tomato paste, walnuts, and raisins from XUAR, with sales traced through online wholesale markets.

United States Trade Representative Katherine Tai announced Friday  that the United States has asked Mexico to review whether workers at Akwel Juárez México, S.A. de C.V., in Ciudad Juárez, Mexico, are being denied the right to freedom of association and collective bargaining. The United States has suspended liquidation of tariffs on goods from the facility, which manufactures auto parts. The request, which was made in response to a petition, marks the thirty-first time the United States has formally invoked the Rapid Response Labor Mechanism (RRM) in the United States-Mexico-Canada Agreement (USMCA).

On November the 25th, governments from across the world will meet in Busan, South Korea, for INC-5, the final stage of negotiations for a Global Plastics Treaty. This session aims to finalize an international legally binding instrument addressing plastic pollution, encompassing the entire lifecycle of plastics.

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