Experts disagreed on whether the spread of the coronavirus will make it impossible for China to reach its purchase commitments, or make it more likely that China will wish to please the U.S., as its economy suffers. But one thing most agreed on -- the disease's impact is another reminder, after the tariff war, that companies should diversify instead of being wholly reliant on Chinese factories. The experts were on a panel at the Washington International Trade Association conference Feb. 4 on the future of U.S.-China trade.
Exports to China
As the coronavirus outbreak disrupts supply chains, U.S. agricultural exporters are unsure when normal cargo processing will resume and are concerned about penalties from ocean freight carriers, according to a Feb. 3 open letter to ocean carriers by Agriculture Transportation Coalition Executive Director Peter Friedmann.
Airbus agreed to pay more than $3.9 billion in combined penalties for violations of the Foreign Corrupt Practices Act, the Arms Export Control Act and the International Traffic in Arms Regulations, the Justice Department said Jan. 31. The bribery charges, levied by U.S., French and United Kingdom authorities, stem from Airbus’s scheme to bribe non-governmental airline executives and government officials, including officials in China, to retain aircraft contracts.
Export Compliance Daily is providing readers with some of the top stories for Jan. 21-24 in case you missed them.
There will be more trade uncertainty in 2020 than in 2019 despite a phase one deal with China, trade experts said during a Jan. 22 panel hosted by the Center for Strategic and International Studies. As trade tensions with Europe come to the foreground and as the U.S. potentially negotiates a more comprehensive deal with Japan, one expert said, the administration will not have enough time and resources to start on phase two of the deal with China as it tries to implement the first phase. Another panelist said the U.S. and China will likely come to a “narrow” phase two deal as the election approaches, but that deal will not provide relief for the international trade environment.
Not only are the purchase requirements in the new China trade deal unrealistic, other developments in China's economy and the trading relationship make them even further out of reach, according to an analysis by economist Chad Bown, a senior fellow at the Peterson Institute for International Economics. Bown notes that the rate of growth needed to meet the targets is higher than when China's economy was growing at 10 percent a year, and China's economy is growing more slowly now. Additionally, the tariffs on Chinese goods that remain in place after phase one are a further drag on the economy.
Export Compliance Daily is providing readers with some of the top stories for Jan. 13-17 in case you missed them.
China’s General Administration of Customs launched a “Smart Customs” initiative to incorporate “new-generation technologies to achieve smarter customs control,” according to a Jan. 16 press release. The initiative aims to better connect “all parties in the international supply chain,” the press release said.
Export Compliance Daily is providing readers with some of the top stories for Jan. 6-10 in case you missed them.
The U.S., the European Union and Japan should do more to align their export control regimes and cooperate on new export control measures to defend against Chinese mercantilist trade practices, the Information Technology & Innovation Foundation said in a Jan. 13 report. The three parties should schedule “formal meetings” to discuss export controls, saying previous discussions have been too “limited in scope. They should be broader given the changing nature of China’s pursuit of advanced technology.”