capital report: sept. 18, 2018

Tariffs on $200 Billion of Imports from China Finalized

Yesterday, Sept. 17, the Office of the U.S. Trade Representative (USTR)  released a list of approximately $200 billion worth of imports from China that would be subject to additional tariffs. The additional tariffs will be effective starting Sept. 24, 2018, and initially will be in the amount of 10 percent. Starting Jan. 1, 2019, the level of the additional tariffs will increase to 25 percent.

The list contains 5,745 full or partial lines of the original 6,031 tariff lines that were on a proposed list of Chinese imports announced on July 10, 2018. After a public hearing and commenting review process, USTR removed 297 tariff lines, including consumer electronic products, chemical inputs, textiles and agriculture, and health and safety products.

The proposed action is the third round of tariffs released by USTR in response to Section 301 investigation findings on China’s unfair trade practices related to forced technology transfer. Earlier this month, the Auto Care Association filed comments and testified at the Section 301 hearing before USTR.

A formal notice of the tariff action will be published in the Federal Register shortly.

View 301 Tariffs Resource Page:


U.S.-Mexico Trade Deal Finalized While Negotiations with Canada Continue

The White House announced last month that the U.S. and Mexico reached a preliminary agreement to modernize the North American Free Trade Agreement (NAFTA). The agreement, called the United States-Mexico trade agreement, currently excludes Canada, but the U.S. and Canada continue to negotiate in order ensure the final deal is trilateral.

According to sources, the updated auto rules of origin requires that 75 percent of a vehicle’s content must come from North America, up from the current 62.5 percent to receive duty-free treatment; and that 70 percent of steel, aluminum and glass used in autos must be sourced from North America. Additionally, the U.S. and Mexico agreed on a labor wage provision requiring 40 percent of a passenger vehicle’s final assembly be completed by workers making at least $16 USD per hour. The threshold is 45 percent for light trucks.

The U.S. has agreed to keep the 2.5 percent tariff currently applied under World Trade Organization (WTO) rules for non-conforming autos that do not meet the rules of origin requirement if made at an existing manufacturing facility. Non-conforming autos made at new plants may be subject to additional tariffs pending results of the Section 232 autos/auto parts investigation.

A deal involving Canada is currently unresolved, although both parties claim to be close to an agreement. Trade experts have claimed that all three governments hope to sign a final deal before Mexico’s new president takes office on Dec. 1.

Questions? Contact Angela Chiang.

View NAFTA resource page:


Texas Legislator Talks Advocacy with Auto Care Leaders

Texas State Senator Dawn Buckingham joined attendees of the Auto Care Association’s Fall Leadership Days in Austin, Texas, earlier this month to discuss her background as a small business owner and share her thoughts on the impact of constituent advocacy on public policy.

Senator Buckingham spoke to the group during the association’s “REV Talk” on Thursday, Sept. 5. REV stands for “Revolutionary Educational Visionary.” These sessions aim to provide relevant content to meeting attendees in a more relaxed setting.

Tom Tucker, director, state government affairs, Auto Care Association, led a Q&A with the senator, asking how she navigated the political system as a doctor and small business owner. She gave practical guidelines for making the biggest impact as an advocate, including cultivating relationships with staff and being a reliable source on relevant issues.

It is essential that auto care businesses, large and small, get involved in the policy process, especially during the busy election season when legislators want to hear from voters. The Auto Care Association is here to help you every step of way.

Questions? Contact David Pinkham.

Schedule an in-district meeting with your local legislator today:


USTR Still Seeking Comments on Identifying Foreign Markets for Counterfeit Goods

Last month, the Office of the United States Trade Representative (USTR) published a notice requesting comments to assist in identifying internet and physical markets based outside the U.S. that should be included in the 2018 Notorious Markets List. The Notorious Markets List identifies marketplaces that either facilitate or directly engage in counterfeiting or copyright piracy, causing significant financial losses for manufacturing rights holders.

Written comments are due by Oct. 1, 2018. Rebuttal or other information to be considered is due by Oct. 15, 2018. Last year, the Auto Care Association submitted comments identifying Alibaba and Taobao as notorious online markets selling counterfeit automotive parts, tools and equipment marketed with members’ brands.

We would appreciate input from members for inclusion in this year’s report and request that members provide information on intellectual property rights concerns, including trademarks, copyrights, patents and trade secrets.

Please contact Angela Chiang with any comments you would like included in the association’s submission no later than Wednesday, Sept. 19. Members can also file their own comments through (Docket USTR-2018-0027).

Read the notice:


Get the LatestCoverage of the 2018 Elections

Thanks to support from the Auto Care Political Action Committee (ACPAC), we are pleased to bring Capital Report readers the latest “Inside Elections with Nathan Gonzalez,” a bi-monthly nonpartisan analysis of U.S. elections.

Read the latest issue:

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