{"id":59,"date":"2019-05-08T17:11:07","date_gmt":"2019-05-08T21:11:07","guid":{"rendered":"https:\/\/www.ciardilaw.com\/blog\/?p=59"},"modified":"2019-05-08T17:12:09","modified_gmt":"2019-05-08T21:12:09","slug":"waiting-for-the-many-other-shoes-to-drop","status":"publish","type":"post","link":"https:\/\/www.ciardilaw.com\/blog\/waiting-for-the-many-other-shoes-to-drop\/","title":{"rendered":"Waiting for the Many Other Shoes to Drop"},"content":{"rendered":"\n

By: John P. Donohue<\/em><\/p>\n\n\n\n

In the late 19th<\/sup> and early 20th<\/sup>\ncentury, in response to the growth in urban manufacturing, New York City began\nan aggressive program of building apartments for its expanding workforce.  In many of these hastily-constructed\napartments, the materials were inferior; the walls and floors were thin; and\nthe apartments were constructed one directly on top of the other.  So, at the end of the day, a tenement dweller\ncould not help but hear his upstairs neighbor\u2019s shoe drop to the floor, and,\nwhen it did, he knew that another shoe would drop shortly thereafter.  Hence, the maxim \u201cwaiting for the other shoe\nto drop.\u201d <\/p>\n\n\n\n\n\n\n\n

For the Port of Philadelphia, we are waiting for several\nWashington D.C. shoes to drop.  <\/p>\n\n\n\n

In February of this year, the Commerce Department\nfinally tendered its report to the president under section 232 of the Trade Expansion\nAct on the question of whether imports of automobiles and their parts constitute\na threat to the national security of the United States and thereby warrants the\nimposition of duties on them.  The president\nmust act on that report by May 18.  And so,\nwe wait, and ask whether this substantial commitment of our port to managing\nand clearing automotive cargo will be stymied by a presidential signature.  The consequences of a special assessment on\nautomobiles and parts for national security reasons, if it comes, can be\nsignificant.  Some economists estimate\nthat the assessments in the automobile case could outweigh the assessments in\nthe China case by a factor of three.  More\non the China case below.  <\/p>\n\n\n\n

The United States Trade Representative, having imposed\nthree rounds of duties on goods from China, some at 10% and others at 25% has\ntold the Congress that if the United States does not get the intellectual\nproperty protections it wants from the section 301 negotiations, he  reserves the right to increase the 10% special\nassessment on $200 billion in goods to 25% and perhaps add a new duty on the\nremaining $250 billion in Chinese goods which have so far escaped presidential\nretaliation.  And so, we wait for\nresolution of the 301-trade dispute or for another shoe to drop. <\/p>\n\n\n\n

As if that were not enough, a different section 301\naction, fully 15 years in the making, alleging illegal subsidies by EU\ngovernments to certain European aircraft producers, has now ripened to a point\nwhere the United States is proposing duties of a whopping 100% against a wide\narray of products from the European Union valued at $21 billion.  This list is in two parts and covers\nhelicopters, aircraft undercarriages, fuselages and aircraft parts from\nGermany, France, the United Kingdom and Spain, and a much larger list of goods\nfrom all of the EU Member States.  The\nsecond list concentrates heavily, but by no means exclusively, on European\nUnion food, wearing apparel and wine products.  Retaliatory duties in this case could come as\nearly as this summer.  As with all of\nthese cases in which product lists for retaliation are published, a hearing in\nthe EU aircraft case on which of the items on the list should be continued, and\nwhich items on the list should be removed will be held in Washington on May\n15.  <\/p>\n\n\n\n

Business executives hate uncertainties, but these international\ntrade uncertainties are particularly difficult. \nThese retaliatory duties, especially the 100% assessments in the emerging\naircraft case, cannot be overcome by price reductions or acceptance of lower\nprofit margins.  At these levels they are\nde facto <\/em>embargos. They require\ncompanies to make structural business decisions.  Do we terminate a relationship with a\nlong-term supplier in a targeted country because his prices will be immediately\nuncompetitive?  Do we close a factory in\nChina or Europe? Do we test product competencies in lesser developed and less\nreliable countries? Do we just ride out the international trade storm?  Business persons are barraged daily with the\nmost difficult and structural business decisions.  <\/p>\n\n\n\n

And the merits of these cases vary significantly.  The idea that the importation of a Ferrari or\na Volvo into the United States (or thousands of them for that matter)\nconstitutes a threat to our national security is almost laughable, but the fact\nis that no one in the international automobile industry is laughing.  They are very, very worried.  On the other hand, there is virtually\nunanimous consensus that the United States had to take action against the\nPeople\u2019s Republic to stop the wholesale confiscation of American intellectual\nproperty, and we probably would have been much better off if prior\nadministrations had acted more aggressively and sooner.  The American case here is solid, as it is in\nthe case of European subsidies to Airbus in which the WTO panel and the\nAppellate Body have both sustained the legitimacy of the U.S. position. And\nwhile the timing of this retaliatory plan is coincidental, it is nonetheless particularly\ntroublesome.     <\/p>\n\n\n\n

And so, we wait. \nFor the government of China to realize that it cannot take our\nintellectual property without adverse consequences; for the EU to recognize\nthat when it signed the Agreement on Subsidies and Countervailing Measures it made\na promise to the world that it did not keep; and for the United States to\nrecognize that an assessment of 232 duties on automobiles and parts is both bad\nlaw and bad policy.  <\/p>\n\n\n\n

Brace yourself. \nI think your neighbor may be heading to bed.  <\/p>\n\n\n\n

Reprinted with the permission of the Maritime Exchange for the Delaware River and Bay <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By: John P. Donohue In the late 19th and early 20th century, in response to the growth in urban manufacturing, New York City began an aggressive program of building apartments for its expanding workforce.  In many of these hastily-constructed apartments, the materials were inferior; the walls and floors were thin; and the apartments were constructed … Continue reading “Waiting for the Many Other Shoes to Drop”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-59","post","type-post","status-publish","format-standard","hentry","category-blog"],"yoast_head":"\nWaiting for the Many Other Shoes to Drop - Ciardi Ciardi & Astin<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ciardilaw.com\/blog\/waiting-for-the-many-other-shoes-to-drop\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Waiting for the Many Other Shoes to Drop - Ciardi Ciardi & Astin\" \/>\n<meta property=\"og:description\" content=\"By: John P. Donohue In the late 19th and early 20th century, in response to the growth in urban manufacturing, New York City began an aggressive program of building apartments for its expanding workforce.  In many of these hastily-constructed apartments, the materials were inferior; the walls and floors were thin; and the apartments were constructed … Continue reading "Waiting for the Many Other Shoes to Drop"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ciardilaw.com\/blog\/waiting-for-the-many-other-shoes-to-drop\/\" \/>\n<meta property=\"og:site_name\" content=\"Ciardi Ciardi & Astin\" \/>\n<meta property=\"article:published_time\" content=\"2019-05-08T21:11:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-05-08T21:12:09+00:00\" \/>\n<meta name=\"author\" content=\"ezmarketingCLA\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"ezmarketingCLA\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/waiting-for-the-many-other-shoes-to-drop\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/waiting-for-the-many-other-shoes-to-drop\\\/\"},\"author\":{\"name\":\"ezmarketingCLA\",\"@id\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/#\\\/schema\\\/person\\\/361b7035c8c19942a41322ba5138e556\"},\"headline\":\"Waiting for the Many Other Shoes to Drop\",\"datePublished\":\"2019-05-08T21:11:07+00:00\",\"dateModified\":\"2019-05-08T21:12:09+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/waiting-for-the-many-other-shoes-to-drop\\\/\"},\"wordCount\":938,\"articleSection\":[\"Blog\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/waiting-for-the-many-other-shoes-to-drop\\\/\",\"url\":\"https:\\\/\\\/www.ciardilaw.com\\\/blog\\\/waiting-for-the-many-other-shoes-to-drop\\\/\",\"name\":\"Waiting for the Many Other Shoes to Drop - 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