Yesterday, the U.S. House of Representatives approved the Uighur Intervention and Global Humanitarian Unified Response Act (UIGHUR Act) of 2019. The vote was 407 to 1.  The legislation encourages high-level U.S. involvement in the Uighur human rights crisis by ordering the Administration to identify and sanction Chinese officials over human rights abuses in the Xinjiang Uighur region. In addition the Administration must, within four months of the legislation’s enactment, submit to Congress a list of Chinese officials deemed responsible for, or complicit in, human rights abuses in Xinjiang. On the same day, those individuals are subject to sanctions under the Global Magnitsky Act, seizing their U.S.-based assets and barring them from entry onto U.S. soil. The House bill was a revamped version of the Uyghur Human Rights Policy Act, passed by the Senate in September. It will now be sent to the Senate, either to be passed in its current form or to set up a Conference Committee to craft updated legislation. 

The U.S. will impose duties of up to 100 percent on products of France, including handbags, after determining France’s Digital Services Tax is “unreasonable or discriminatory and burdens or restricts U.S. commerce,” according to the USTR notice. USTR will hold a public hearing on the action on January 7, 2020. The retaliation will cover $2.4 billion of imports from France and the additional duties could be as high as 100 percent.  The retaliation list includes cheese, champagne, cosmetics, as well as kitchenware and tableware.  Most important for fashion brands and retailers are handbags, which are listed below:  

• 4202.21.30 ............... Handbags, with or without shoulder strap or without handle, with outer surface of reptile leather
• 4202.21.60 ............... Handbags, with or without shoulder strap or without handle, with outer surface of leather, composition or patent leather, nesoi, n/o $20 ea.
• 4202.21.90 ............... Handbags, with or without shoulder strap or without handle, with outer surface of leather, composition or patent leather, nesoi, over $20 ea.
• 4202.22.15 ............... Handbags, with or without shoulder straps or without handle, with outer surface of sheeting of plastics
• 4202.22.40 ............... Handbags with or without shoulder strap or without handle, with outer surface of textile materials, wholly or in part of braid, nesoi
• 4202.22.45 ............... Handbags with or without shoulder strap or without handle, with outer surface of cotton, not of pile or tufted construction or braid
• 4202.22.60 ............... Handbags with or w/o shoulder strap or w/o handle, outer surface of veg. fibers, exc. cotton, not of pile or tufted construction or braid
• 4202.22.70 ............... Handbags with or w/o shoulder strap or w/o handle, with outer surface containing 85% or more of silk, not braided
• 4202.22.81 ............... Handbags with or without shoulder strap or without handle, with outer surface of MMF materials

Today’s news about the U.S.-China trade deal is unnerving Wall Street and once again raises questions about the real progress to negotiate the phase one deal.  Speaking with reporters today in London, President Trump said “a China trade deal depends on whether I want to make it.”  Trump was clear that he is in no hurry.  “I have no deadline. … In some ways I like the idea of waiting until after the election for the China deal.”  Is this tough talk intended to increase the pressure on China to make concessions in the talks?   Or is this an insight into President Trump’s economic policy?  The Axios headline is “Trump Brings the Trade War Back to Life,” which captures the shift from recent weeks when Administration officials have been consistently optimistic that there will be no new tariffs imposed on Chinese imports.    Commerce Secretary Wilbur Ross spoke trade on Fox Business yesterday saying that December was a “really good time” to add more tariffs to Chinese imports because it wouldn’t “interfere with this year’s Christmas.” Ross also noted in the interview that time was running out to reach a trade deal before the next round of tariffs are scheduled to kick in on December 15. 

USTR issued a statement today saying it is “initiating a process to assess increasing the tariff rates and subjecting additional EU products” to the retaliatory tariffs over the EU airbus dispute after a World Trade Organization (WTO) compliance panel today rejected the European Union’s (EU) claims that it removed illegal airbus subsidies. There is already a 10 percent tariff on aircraft and 25 percent tariff on an array of consumer goods, including apparel products from the UK. A Federal Register Notice regarding that process will be issued this week, according to USTR, and we will share those details when they are available.