Top trade issues affecting the gear industry in 2020; AGMA launches new webinar series

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The recent signing of trade deals with China, Canada, Mexico, and Japan capped three of the most momentous years in the history of U.S. trade law and trade policy. The U.S. trade relationship with these and many other countries in 2020 looks far different now than it did in November 2016, and it is hard to name a single industry or sector that has not been affected. Certainly, the gear industry is no exception.

From tariffs on imports from China to duties on imported steel and aluminum to new scrutiny of supply chains, investments, and exports over both trade and national security concerns, the gear industry is facing a rapidly changing competitive and regulatory landscape. Now more than ever, it is critical to understand the many trade issues facing the industry.

Here is a list of the top five for 2020:

• The “Phase One” U.S.-China trade deal and continued U.S. tariffs on imports from China: On December 15, 2019, President Donald Trump announced the United States had agreed to lift tariffs on some Chinese imports in exchange for greater intellectual property rights protections, market access for U.S. exporters, and other trade commitments by China. Despite disruptions to global trade from the COVID-19 virus, this deal is starting to be implemented, with some companies seeing lower tariffs and new export opportunities. At the same time, tariffs remain in place on more than half of all Chinese shipments to the United States, and the process to obtain tariff exclusions remains a challenge for many companies.

• The U.S.-Mexico-Canada Agreement and other trade deals: In mid-2020, the United States, Mexico, and Canada will start to implement the new U.S-Mexico-Canada Agreement. Companies with North American operations — especially those serving the automotive and auto parts sectors — will see changes to fundamental NAFTA rules that have governed their shipments and North American manufacturing operations for the past quarter century. New investments and shifts in production from Asia to North American will challenge supply chains and require careful planning under the new USMCA rules, as well as under agreements coming into force or currently being negotiated with Japan, the U.K., the EU, and other countries.

• Continuation of steel and aluminum tariffs: First imposed in 2018 under the Section 232 national security mechanism, tariffs and quotas on imported steel and aluminum products are likely to continue in effect throughout 2020 and beyond. Companies that rely on steel and aluminum imports — and those with domestic production — will continue to face challenges from the tariffs and the complex process to obtain exclusions. Meanwhile, the possibility of further tariffs — or the lifting of tariffs on some countries — cannot be ruled out.

• Export controls on emerging technologies and new national security laws: Congress and the Administration are continuing to impose new restrictions on sharing of new and emerging technologies — such as additive manufacturing, 5G, and “Internet of Things” technologies — with non-U.S. individuals and companies. As leaders in many of these technologies, companies in the gear industry must understand how these rules will affect their investments, R&D efforts, and sales forecasts and take steps to remain compliant.

• Continuing trade enforcement: U.S. Customs and Border Protection and other federal agencies have been increasing their enforcement of the trade laws, bringing new prosecutions, levying fines, and seizing shipments. Among their enforcement priorities are counterfeit products, imports that circumvent tariffs and other import rules, and transactions with sanctioned countries.

As 2020 unfolds, U.S. companies will need to closely watch the impact of these developments on their supply chains, purchasing decisions, sales, and investments. A company-wide, “all-hands” approach that involves sourcing managers, trade compliance teams, and strategic planners will be critical to properly manage these risks and take advantage of opportunities.

No single article can arm you with all you need to know to successfully navigate these issues and the challenging trade environment in 2020. That’s why the American Gear Manufacturers Association (in partnership with the American Bearing Manufacturers Association) has launched a new monthly trade webinar series. Every month through the end of 2020, AGMA will be offering free, hour-long programs on key trade issues affecting your company and industry. Participants will have access to lively and in-depth presentations by leading trade law and policy experts. They will also have the opportunity to ask questions and will receive detailed written summaries of the topics covered.

To learn more about the webinar series and how to sign up, visit www.agma.org/education/online/webinars.

Upcoming Trade Webinars

May 6, 2020

The Evolving U.S. China Trade Relationship: The Phase One Trade Deal, the Phase Two Negotiations, and How U.S. Trade Policy on China Impacts You

Despite the signing of a “phase one” trade agreement with China, the United States continues to levy Section 301 tariffs on hundreds of billions of dollars of imports from China, while China continues its own retaliatory tariffs. This webinar will discuss the prospects for the resolution of the U.S.-China trade dispute in 2020, the likely scope and timing of a “phase two” deal, and what you need to do to prepare your own business to thrive despite the shifting landscape of U.S.-China trade relations.

June 3, 2020

All About Section 232 Tariffs on Steel, Aluminum, Auto Parts, and Other Products:  What You Need to Know to Manage Risks and Seize New Opportunities

The United States continues to levy tariffs on imports of steel and aluminum as well as derivative products under the historically little-used Section 232 mechanism. Additional tariffs on autos, auto parts, and other imports remain a possibility in the near term. This webinar will arm you with what you need to know to minimize your tariff risk, successfully apply for tariff exclusions, and seize new investment and trade opportunities opened by the tariffs.

July 1, 2020

National Security Reviews of Foreign Investments in the United States: What U.S. Companies and Overseas Investors in the Bearing, Gear, and Related Industries Need to Know

Under legislation passed by Congress in 2018 and implemented in February 2020, the U.S. government’s Committee on Foreign Investment in the United States is increasingly scrutinizing a wide range of investments by foreign persons — most notably from China — in U.S. businesses, infrastructure, and real estate. Companies and investors in the bearing and gear industries are among those likely to be most affected by the new CFIUS rules and may see their planned investments blocked or penalties levied where the requisite CFIUS review is not performed. This webinar will pull back the curtain on the new CFIUS process and tell you what you need to know to identify CFIUS issues and successfully complete planned investments.

Upcoming Education

Operator Hobbing & Shaper Cutting
May 12-13 | Chicago, Illinois

Learn and understand fundamentals of gear manufacturing. Acquire knowledge and understanding of gear nomenclature, hobbing and shaping of spur and helical gears, and splines. Learn and understand hobber and shaper machine set-up, as well as gear tooth element inspection. Understand the manufacturing process before gear tooth cutting, as well as post cutting processes. Apply concepts to further finishing processes, i.e. heat treat, gear tooth shaving, and grinding and/or skiving. Gain knowledge to establish a solid foundation for all basic gear manufacturing.

This class has been made possible with the generous donations of the AGMA Foundation.

Gearbox CSI
May 19-21 | Concordville, Pennsylvania

Gain a better understanding of various types of gears and bearings. Learn about the limitations and capabilities of rolling element bearings and the gears that they support.  Grasp an understanding of how to properly apply the best gear-bearing combination to any gearbox from simple to complex.

The Meeting that Builds the Gear Industry Leaders of Tomorrow! Come to the Strategic Resources Network Meeting!
May 27-29 | Charleston, South Carolina

The 2020 AGMA Strategic Resources Network (SRN) event has been designed for the next-generation manufacturing leaders. We are providing presentations that address the agile skills that our current manufacturing environments require. Learn how to protect your company from cybersecurity threats; discuss what is keeping your peers up at night; and learn the latest discoveries from the AGMA Emerging Technology committees.

This year, attendees will also receive a four-hour special training session on contract negotiating. Join us in the unique environment of Charleston, South Carolina, network with your peers at a traditional low country boil, and tour the world-class Clemson University offshore wind turbine test facility.

Become an FTM Peer Reviewer

October 19-21, 2020 | Rosemont, Illinois

The abstracts are in for the 2020 Fall Technical Meeting and now it is time to review them for the meeting. Visit: www.agma.org/2020-fall-technical-meeting/

The unique qualifier for the FTM is the fact that all technical papers go through a double-blind review. Sign up to be a part of this unparalleled event and share your expertise to help the researchers showcase their greatest work.

Calendar of Events

  • April 1 — Bevel Gearing Committee Meeting — WebEx
  • April 2 — Lubrication Committee Meeting — WebEx
  • April 9 — Powder Metallurgy Committee Meeting — WebEx
  • April 15 — Plastics Committee Meeting — WebEx
  • April 15–17 — Working Group 2 and Working Group 7 — China
  • April 21 — Vehicle Gearing Committee Meeting — WebExEx
  • April 23 — Helical Gear Rating Committee Meeting — WebEx
  • April 24 — Metallurgy and Materials Committee Meeting — WebEx
  • April 28 — Nomenclature Committee Meeting — WebEx
  • April 30 — Bevel Gearing Committee Meeting — WebEx
  • May 5–6 — Flexible Coupling Committee Meeting — Alexandria, Virginia
  • May 7 — Lubrication Committee Meeting — WebEx
  • May 12 — Nomenclature Committee Meeting — WebEx
  • May 19 — Gear Accuracy Committee Meeting — WebEx
  • May 21 — Wormgearing Committee Meeting — WebEx
  • May 28 — Plastics Committee Meeting — WebEx
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Nate Bolin is a partner in the Customs and International Trade Group of Faegre Drinker Biddle & Reath LLP, based in Washington, D.C. He regularly counsels industry groups, companies, and investors on key trade issues affecting their investments, customers and supply chains.