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U.S. and China Sign Phase One Trade Deal

Stephanie Salmon

On January 15, President Donald Trump and Chinese Vice Premier Liu He signed “Phase One” of the U.S.-China agreement, after more than a dozen rounds of on-off negotiations.  

As part of the agreement, President Trump will relax some of the tariffs imposed on China’s imported goods. China will purchase more American energy, agricultural and manufactured goods, provide more protections for the intellectual property of American firms, and no longer require the sharing of technologies from U.S. companies in exchange for trade.

Specifically, China agreed to purchase an additional $200 billion in U.S. goods over the next two years, including nearly $80 billion worth of manufactured goods, such as automobiles, car parts, aircraft, agricultural machinery, medical devices and semiconductors.

Other key provisions include:
Improvements on Intellectual Property Protection  
This includes revisions to protect a broad range of U.S. intellectual property, such as trade secrets and patents. The deal requires China to increase criminal penalties for copyright theft to the level where they act as a deterrent. Ending what the U.S. considers the practice of forcing or pressuring foreign companies to transfer their technologies to Chinese companies.

China-Based Counterfeiting  
In order to combat the prevalence of counterfeit or pirated goods, China agreed to consider revoking operating licenses if e-commerce platforms repeatedly sell counterfeit goods. The U.S. agreed to discuss further measures to combat online sales of counterfeit goods.

Broad Commitments on Technology Transfer  
On technology transfer, the deal includes high-level Chinese commitments to halt technology transfer as a prerequisite for market access or licensing, and to avoid supporting outbound investments based on acquiring foreign technology.

Formal Dispute Settlement Mechanism  
The mechanism includes progressively higher rounds of consultation if trade policy issues arise, and the agreement that both sides can take appropriate responsive actions if no resolution can be reached.

Cancellation and Reduction of Some Tariffs  
The U.S. canceled tariffs on Chinese-made smartphones, toys and laptop computers, Section 301 List 4B, set to go into effect in mid-December 2019. It also cut in half another batch of tariffs to 7.5% from 15%, the rate levied on about $120 billion worth of other China imports from Section List 4A (which contains a few castings) effective February 14, 2020.

The U.S. is leaving in place 25% tariffs on $250 billion in imports from China on Section 301 Lists 1-3. These three lists contain an array of Chinese industrial goods and components, including dozens of categories of castings, as well as materials and chemicals.

After the phase one deal was announced, the Trump administration announced that negotiations would continue towards a phase two deal, which would likely involve discussions on structural reforms to China’s economy, including subsidization of its state-owned enterprises.  

OSHA Penalties Increase for Workplace Health & Safety Violations in 2020

The penalties levied against employers for safety and health violations by the Occupational Safety and Health Administration (OSHA) have gone up, effective Jan. 16, 2020. The increases only apply to citations issued after that date and for the remainder of 2020. Metalcasters who have open and ongoing OSHA inspections can expect that any citations issued by the agency after the effective date will reflect the increased penalties. OSHA is required to adjust maximum OSHA penalties annually for inflation since 2015.

The new  maximum penalties are:

  • Other-than-Serious: $13,494 (increased from $13,260).
  • Serious: $13,494 (increased from $13,260).
  • Repeat: $134,937 (increased from $132,589).
  • Willful: $134,937 (increased from $132,589).

The penalty increase applies to federal OSHA states. Nonetheless, OSHA expects that the 26 states operating their own occupational safety and health programs will align penalty structures with federal OSHA so that such programs are equally effective.    

EPA Seeks Input on Federal Cleaner Trucks Initiative
The U.S. Environmental Protection Agency (EPA) announced in January it is seeking input on an initiative for cleaner emission standards for heavy-duty trucks.
The Cleaner Trucks Initiative (CTI) will establish new, more stringent emission standards for oxides of nitrogen (NOx) and other pollutants for highway heavy-duty engines. Through an Advance Notice of Proposed Rulemaking (ANPR), EPA is seeking comments from interested stakeholders by Feb. 20.

Since this is an advanced notice of proposed rulemaking, it does not include regulatory text or provide guidance as to how much of a reduction in NOx emissions will be required.

EPA does indicate that the future standards likely would not take effect until 2027. However, California authorities have indicated they would like to impose lower NOx levels by 2024, setting up a potential conflict with EPA’s goal of implementing one national standard.

The EPA last revised NOx standards for on-highway heavy-duty trucks and engines in 2001.  

Click here to see this story as it appears in the February 2020 issue of Modern Casting.