Client Alerts

In a surprising and possibly unprecedented action, U.S. Trade Representative (USTR) Robert Lighthizer announced late Wednesday, August 1^st that the President directed him to consider an increase in the proposed Section 301 tariff originally announced on July 10^th from 10% to 25%. 

On July 27, 2018, the Centers for Medicare & Medicaid (CMS), published a Proposed Rule regarding significant modifications to Medicare payment policies under the Physician Fee Schedule (PFS) for Part B services rendered in CY 2019.

Over the past year, there has been a major increase in the number of businesses seeking insurance coverage for losses they incurred as a result of “fraudulent instruction” scams.  A fraudulent instruction scam is where a criminal hacker collects data from the victim’s computer that allows the hacker to send plausible-looking requests to transfer funds to bogus accounts.  

Robert Lighthizer, the U.S. Trade Representative, yesterday announced a new list of Chinese products, worth approximately $200 billion, that will be reviewed for an additional 10% tariff under the USTR’s ongoing Section 301 investigation.  

In prior client alerts, we discussed the imposition of tariffs on various products from China of 25%, based on a finding by the President of violations of section 301 of the Trade Act of 1974 by China related to U.S. intellectual property rights.

The final list of 818 tariff items subject to the 25% tariffs recently imposed by President Trump on products imported from China was released on June 15, 2018, covering some $34 billion in products.  The President imposed the tariffs under Section 301 of the Trade Act of 1974 that took effect July 6, 2018.  The administration previously indicated that a product exclusion process would be announced, presumably similar to the one the Department of Commerce has put in place or the steel and aluminum tariffs issued under section 232 of the Trade Expansion Act of 1962 earlier this year.  The section 232 process which was administered by the Commerce Department has been roundly criticized for being burdensome and complex – after 3 months, only 100 or so of the over 20,000 applications have been fully processed, and almost half of that number were denied.

The Centers for Medicare & Medicaid Services (“CMS”) has issued a request for information seeking input from the public on how to address any undue regulatory impact and burden of the physician self-referral law (the “Stark Law”).

Exasperation with the technical and practical restrictions of the complex and intricate Stark Law has been apparent since 1988 when Congressman Pete Stark introduced the "Ethics in Patient Referrals Act, " the first of the so-called Stark Law. Now, CMS has issued an invitation to interested parties to comment on them.  

In a 5-4 decision, issued on June 26, 2018, the U.S. Supreme Court upheld President Trump’s latest Travel Ban of September 2017. The Court found that the Travel Ban was within the President’s broad statutory authority to limit the entry of nationals of certain countries in the interest of national security. 

The Department of Labor (“DOL”) recently finalized new regulations providing that a “bona fide group or association of employers” that sponsor or maintain an employee welfare benefit plan may be an “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The upshot of the new regulations is that small employers or sole proprietors which previously had difficulty affording health insurance can now band together and purchase large group market insurance plans (which might result in potential premium cost-savings and reduction of administrative costs).

In earlier client alerts (June 15, 2018 and April 4, 2018), we have discussed the proposed tariffs under section 301 against China that arose as a result of allegedly unfair Chinese intellectual property practices. The administration, in its openly declared trade war with China, has been expanding on the implementation of these duties and issued a new Federal Register Notice dated June 20, 2018. This notice sets out procedures for entry of products already determined to be subject to tariffs and assigns a special tariff number to be used to identify them in addition to the regular HTS number.  Products of China that are provided for in new HTSUS heading 9903.88.01, as established by Annex A of this notice that are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on July 6, 2018, shall be subject to an additional duty of 25 percent ad valorem.

As a result of pressure from many sources including foreign embassies, the U.S Department of Commerce has announced an extension of the deadlines in its recently announced investigation under Section 232 of U.S automobiles (including SUV’s and light trucks) and auto parts imports and their potential impact on the national security.  

The Office of the United States Trade Representative (USTR) today released a list of products imported from China that will be subject to additional tariffs as part of the U.S. response to alleged unfair trade practices by China related to the alleged forced transfer of American technology and intellectual property.   

With the construction season already underway, the Michigan legislature repealed the state Prevailing Wage Law.  The repeal was effective as of June 6, 2018.  This change in the law may lead to many questions for construction industry employers and governmental entities in Michigan that have a contract in place requiring compliance with Michigan’s Prevailing Wage Law.  Is the contract enforceable even though the law no longer exists?  Should the parties renegotiate the contract to eliminate the requirement that the contractor comply with the law?  Can a contractor simply ignore the contractual requirement?

Mexico published in its official gazette a decree imposing tariffs on U.S. steel, aluminum, and farm products as a response to U.S. failure to extend tariff country exclusions for steel and aluminum.  The measures are said to be taking aim at Republican strongholds ahead of U.S. congressional elections in November.  Mexico’s trade negotiators included products exported by states represented Republican leaders, including Indiana where Vice President Mike Pence was formerly governor and Bourbon-producing Kentucky, home state of Senate Majority Leader Mitch McConnell.  The latter designed to put the most pressure on the Trump Administration.  Mexico had previously received a temporary exemption that was extended through May 31, 2018 but not renewed.

The White House announced this morning that three of the United States’ closest allies would no longer be exempted from the steel and aluminum tariffs imposed by President Trump in early March as a measure to protect national security. The U.S. will impose tariffs of 25% on steel imports and 10% on aluminum imports from Canada, Mexico and the European Union (which collectively account for almost 50% of U.S. imports of these products) beginning at midnight June 1. The Administration had granted a short-term exclusion until April 30^th to these and other countries that was later extended one month to May 31^st.  U.S. negotiators did little to conceal the fact that these temporary exclusions were being used as leverage for other trade concessions, especially in NAFTA negotiations.

Our Client Alert of May 24, 2018, advised of President Trump’s request for the Commerce Department to investigate whether imports of automobiles and auto parts are impacting the national security and should be subject to tariffs or quotas. As we anticipated, Commerce will employ a process similar to the one that preceded the recent imposition of tariffs on steel and aluminum imports. 

An early morning tweet yesterday (5/23/2018) from President Trump teased “There will be big news coming soon for our great American Autoworkers. After many decades of losing jobs, to other countries, you have waited long enough!” Commerce Secretary Wilbur Ross followed upon later that day with an announcement that the President has directed the Commerce Department to open an investigation under Section 232 of the Trade Expansion Act of 1962 to determine whether imports of automobiles (including SUVs, vans and light trucks) and automotive parts into the United States “threaten to impair the national security”.

Summary:  President Donald Trump’s announcement on May 8, 2018, withdrawing the United States from the Joint Comprehensive Plan of Action (JCPOA) that relaxed sanctions on Iran is already having significant diplomatic effects around the world.  On May 18, 2018, the European Union responded by resurrecting a 21-year old E.U. blocking regulation.  European companies with United States affiliates now face the real prospect of being sanctioned by the United States if they keep their investments in Iran, or being sanctioned by the European Union if they disinvest.  What legal tools exist to help them navigate these treacherous waters?

Summary: President Donald Trump’s announcement on May 8, 2018, that the United States will withdraw from the Joint Comprehensive Plan of Action (JCPOA) that relaxed sanctions on Iran are already having significant diplomatic effects around the world. But what does it mean for the auto sector, the energy and transportation industries, Iranian immigrants to the United States, and other businesses and individuals with interests in Iran?

Most foreign governments require disputes with parties with which they have agreements to be litigated in their courts using their domestic law. This tends to create an unwillingness, on the part the private party, to seek redress in local courts in order to pursue its rights given the tendency of such courts to often side with the government.

EU, CANADA, MEXICO GRANTED A “FINAL”30 DAY EXEMPTION TO “CONTINUE” NEGOTIATIONS; SEVERAL OTHER COUNTRIES GRANTED “PERMANENT” EXEMPTIONS IN EXCHANGE FOR QUOTAS.  PRODUCT EXCLUSION REQUEST PROGRAM BOGGED DOWN.